This is the first in a series of five articles on the 2022 Voluntary Initiatives Report by Highwood Emissions Management.
What is a voluntary initiative?
Around the world, governments are getting serious about regulating climate change. New policies target greenhouse gas emissions from the oil and natural gas (O&G) industry. In particular, methane emissions are at the crosshairs of new regulations in Canada, the United States, and elsewhere.
While regulations are a key driver of emissions reductions, some people believe that government policies don’t go far enough, or that the rule making process is too slow. As a result, some stakeholders have come to expect voluntary emissions management activities from O&G companies. Many of these companies have announced net-zero targets that must be achieved with or without regulation.
Enter voluntary initiatives. A Voluntary Emissions Reduction Initiative is a co-ordinated effort managed by an administering organization that enables participants to take standardized voluntary steps towards targeting, achieving, and/or taking credit for emissions reductions.
Today, most of the majors participate in multiple voluntary initiatives by setting collective targets, joining emissions reduction coalitions, following strict methodologies, or even certifying and trading low-carbon commodities. For most other companies, many of these initiatives are new and unfamiliar, and learning enough to navigate them can be a full-time job.
To help bring clarity to the dynamic world of voluntary initiatives, Highwood has published the second edition of its popular report, An Overview of Voluntary Emissions Reduction Initiatives for the Oil and Gas Industry. In this article, we introduce voluntary initiatives, and in subsequent articles in this series, we get into the details you need to know to take advantage of this emerging space.
What types of voluntary initiatives exist?
Our 2022 report features 24 voluntary initiatives that differ along numerous axes — function, region, disclosure requirements, transparency, and target audience, to name a few. As part of our analysis, we have grouped initiatives into four categories: Certifications, Commitments, Guidelines, and Other Initiatives.
Certifications recognize accomplishments. They hold participants to binding standards and entail an explicit declaration of achievement by an administering organization. Certifications tend to be the most rigorous category. In our 2022 report we cover the EO100 Standard for Responsible Energy Development, The MiQ Standard, TrustWell Responsible Gas, and Digital Natural Gas and Methane Performance Certificates (Xpansiv).
Commitments look to the future. They require participants to pledge towards a goal. Popular Commitments include the Oil and Gas Climate Initiative (OGCI), the Oil and Gas Methane Partnership (OGMP), ONE Future Coalition, the EPA Methane Challenge Program, the Environmental Partnership, and the Science-Based Targets Initiative.
Guidelines are the how. They include frameworks, standards, principles, and/or tools set forth by an organization to be followed by participants. We cover 11 Guidelines in the 2022 report, including GTI Energy’s Veritas, the NGSI Methane Intensity Protocol, CDP, GRI, TCDF, SASB, and several new methodologies for calculating the carbon intensity of LNG cargoes (e.g., SGE, GIIGNL).
Other Initiatives that may include platforms for sharing emissions reduction activities and achievements, and broad partnerships among industry, governments, and NGOs. In 2022 our other initiatives are Methane Guiding Principles, the Global Methane Pledge, and Global Methane Alliance.
How can I learn more?
In this article we’ve introduced Voluntary Initiatives — but we’ve only scratched the surface. In the next article we will present and discuss the main findings from our report. Article 3 will present a value proposition for engaging in these initiatives, Article 4 will discuss the role of technology, and Article 5 will speculate on the future of differentiated gas.
In the meantime, you can download the free report to really dive into the details, and don’t forget to register for our free interactive mini-conference, to be held on Sept. 21, 2022, in collaboration with Petroleum Technology Alliance Canada.