Emissions from Oil and Gas Operations in Net Zero Transitions A World Energy Outlook Special Report on the Oil and Gas Industry and COP28 INTERNATIONAL ENERGY AGENCY The IEA examines the full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management and much more. Through its work, the IEA advocates policies that will enhance the reliability, affordability and sustainability of energy in its 31 member countries, 11 association countries and beyond. This publication and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Source: IEA. International Energy Agency Website: www.iea.org IEA member countries: IEA association countries: Australia Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Japan Korea Lithuania Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Republic of Türkiye United Kingdom United States Argentina Brazil China Egypt India Indonesia Morocco Singapore South Africa Thailand Ukraine The European Commission also participates in the work of the IEA Emissions from Oil and Gas Operations in Net Zero Transitions Abstract Abstract Today, oil and gas operations account for around 15% of total energy-related emissions globally, the equivalent of 5.1 billion tonnes of greenhouse gas emissions. In the International Energy Agency’s Net Zero Emissions by 2050 Scenario, the emissions intensity of these activities falls by 50% by the end of the decade. Combined with the reductions in oil and gas consumption in this scenario, this results in a 60% reduction in emissions from oil and gas operations to 2030. Fortunately, oil and gas producers have a clear opportunity to address the problem of emissions from their activities through a series of ready-to-implement and costeffective measures. These include tackling methane emissions, eliminating all non-emergency flaring, electrifying upstream facilities with low-emissions electricity, equipping oil and gas processes with carbon capture, utilisation and storage technologies, and expanding the use of hydrogen from low-emissions electrolysis in refineries. PAGE | 3 I EA. CC BY 4.0. Upfront investments totalling USD 600 billion would be required to halve the emissions intensity of oil and gas operations globally by 2030. This is only a fraction of the record windfall income that oil and gas producers accrued in 2022 – a year of soaring energy prices amid a global energy crisis. This report aims to inform discussions on these issues in the run-up to the COP28 Climate Change Conference in Dubai in November and is part of a broader World Energy Outlook special report to be released later in 2023 focusing on the role of the oil and gas industry in net zero transitions. Emissions from Oil and Gas Operations in Net Zero Transitions Executive summary Executive summary The production, transport and processing of oil and gas resulted in 5.1 billion tonnes (Gt) CO2-eq in 2022. These “scope 1 and 2” emissions from oil and gas activities are responsible for just under 15% of total energy-related greenhouse gas (GHG) emissions. The use of the oil and gas results in another 40% of emissions. In this report, we look at the changes and measures needed to reduce the emissions intensity of oil and gas operations in the IEA’s Net Zero Emissions by 2050 (NZE) Scenario. The work brings together, expands and updates analysis from previous IEA work to inform discussions in the run up to COP28 in Dubai. It is part of a broader World Energy Outlook Special Report to be released in 2023 focussing on the role of the oil and gas industry in net zero transitions. The NZE Scenario maps out a way to limit the global average temperature rise to 1.5°C alongside achieving universal access to modern energy by 2030. This scenario sees a rapid decline in oil and gas demand, which is sufficiently steep that it can be satisfied in aggregate without developing new oil and gas fields. There is also an immediate, concerted effort by all the oil and gas industry to limit emissions from its activities. In the NZE Scenario, the global average emissions intensity of oil and gas supply falls by more than 50% betwe