Country
Assessment
No evidence regarding the measurement and reporting requirements could be found in the sources consulted. However, industry studies suggest that the EGPC, as the joint venture partner, has access to flaring and venting data. The environmental impact assessment of oil and gas activities requires a monitoring plan, which should outline “monitoring intervals and reporting procedures” of the air emissions covered in the assessment. Article 17 of Executive Regulations 338, 1995 , requires regulated entities to maintain records. Article 18 empowers the EEAA to conduct inspections and tests to confirm the accuracy of records. Article 43 assigns some responsibilities to the EGPC. In early 2022, the EGPC signed a memorandum of understanding with a private company on a flare recovery initiative. The company will deploy a suite of tools to manage emissions via measurement, recovery, and utilization of flare gas.
No evidence regarding monetary penalties could be found in the sources consulted.
No evidence regarding nonmonetary penalties could be found in the sources consulted. PSCs give national companies partnering in joint ventures certain rights over associated gas, which may lead them to take over the gas rights from the partners. However, it is unclear whether such a situation leads to any changes in the volumes of flared or vented gas.
No evidence regarding performance requirements could be found in the sources consulted.
No evidence regarding fiscal or emission-reduction incentives could be found in the sources consulted.
Egypt has implemented two CDM projects. One, registered in 2006, targeted methane venting at a landfill facility. The second project, registered in 2013, targeted flare gas recovery at a large refinery.
The government has been promoting the use of more natural gas within the economy. It has a strategy for increasing the use of compressed natural gas (CNG) vehicles. The government provides financial support for converting older gasoline or diesel vehicles into CNG, selling new CNG vehicles, and expanding the CNG filling station network. EGAS is expanding the distribution network to connect more residential buildings to gas supplies. The government enacted a new Gas Market Law (No. 196) in 2017 and established the Gas Regulatory Authority in 2017. The sector’s restructuring is intended to introduce competition in the gas market via third-party access to the pipeline network. This restructuring aims to give consumers or gas-trading companies the ability to procure gas supplies from producers within Egypt or via LNG imports. Previously, EGAS was the single buyer of natural gas and the de facto regulator of the gas sector.
The Cabinet sets the prices of natural gas delivered to different customer classes. As part of gas market reforms, prices were raised for all buyers except residential consumers. Industries such as cement found the reformed gas prices too high and switched to coal. In 2020, the Cabinet lowered gas prices for all industrial users. Given the increased availability of LNG and increased domestic gas production, lower prices may still allow suppliers to recover costs. The market reforms are promising, since gas prices below cost-recovery levels are among the factors discouraging investment in efforts to reduce flaring and venting at oil and gas facilities. However, the Cabinet’s differentiation of prices by customer class, and the risk of frequent readjustments, create uncertainty.
These reforms and government efforts to increase gas use may create incentives for operators to capture more of the associated gas they are currently flaring or venting. The strength of the incentive depends on the proximity of the field to processing facilities and pipeline networks, the age of the field, the gas-to-oil ratio, the share of natural gas liquids in produced volumes, and other technical and geological factors. The recovery and utilization of flared associated gas is listed as a mitigation action in Egypt’s updated NDC of June 2022. The NDC mentions 17 implemented projects and another 36 projects to be implemented by 2030. Projects typically use captured gas for on-site power generation to replace diesel, or access existing pipelines and processing facilities
The European Commission (EC) published its Methane Strategy in October 2020. The strategy covers emissions from all sectors, but one of its key objectives is to impose obligations on companies to mitigate overall methane emissions. The strategy also states that the EC supports the targets formulated by the World Bank’s Zero Routine Flaring by 2030 initiative.
At the 26th session of the Conference of the Parties (COP26), held in 2021, the EC along with the United States announced the Global Methane Pledge, a commitment to reduce all human-made methane emissions. The participants (150 countries as of June 14, 2023) have also committed to advancing in that direction using good practice inventory methodologies, continuously improving the quality of their data, and ensuring greater transparency in key sectors.
Following the Global Methane Pledge, in 2021, the EC prepared the proposal for a regulation of the European Parliament (EP) and the European Council on methane emissions reduction in the energy sector, as well as an amendment of Regulation (EU) 2019/942. The proposed regulation requires the oil, gas, and coal sectors to measure, report, and verify methane emissions and proposes strict rules to detect and repair methane leaks and limit venting and flaring. The regulation would build on the Oil and Gas Methane Partnership (OGMP) 2.0 framework, provided the framework aligns with the regulation’s objectives of improving measurement and data quality.
The proposed regulation also puts forward global monitoring tools to ensure transparency regarding methane emissions from oil, gas, and coal imports into the European Union (EU). The EC would also consider further actions in the future. The EP passed the proposed regulation with amendments on May 9, 2023. The amendments enhanced the language on the oversight of fossil fuel importers. On November 15, 2023, EP and European Council announced a provisional agreement on methane regulations.
These steps align with the EU target—stated in Regulation (EU) 2021/1119, also known as the European Climate Law—to reach climate neutrality by 2050.
The key target of the Global Methane Pledge is global, not national or regional, and aims for a 30 percent reduction of all human-made methane emissions by 2030 compared with 2020 levels. This has the potential to prevent global warming over 0.2°Celsius by 2050. In line with its Methane Strategy , the EC will also examine available options for eliminating routine venting and flaring in the energy sector, in an attempt to complement the 2030 objectives of the World Bank’s Zero Routine Flaring by 2030 initiative.
Regulation (EU) 2021/1119 introduces a requirement to reach net-zero emissions across the EU by 2050 and defines an interim step for 2040 (see section 3 of this case study).
Methane emissions during oil and gas exploration and production; gas gathering and processing, transmission, distribution, and underground storage; and LNG operations (along with coal mines) were not specifically regulated at the EU level until the EC began working on specific regulations in 2021.
Regulation (EU) 2021/1119 includes the target of economywide climate neutrality by 2050 and establishes a commitment of at least 55 percent reduction of net greenhouse gas (GHG) emissions below 1990 levels by 2030. According to Part 2 of Annex V to Regulation (EU) 2018/1999 (“Governance Regulation”), the emissions to be reduced include those of carbon dioxide and methane. The relevant institutions and the EU member states shall take the necessary measures at the EU and national levels. Regulation (EU) 2018/1999, requires EU member states to establish national inventory systems to estimate GHG emissions and report national projections. The EP amendments include a new Article 1a, which explicitly refers to the above two regulations.
The 2021 proposal builds on the provisions of the European Climate Law and the Governance Regulation and establishes applicable principles pertaining to the flaring and venting of natural gas and the treatment of fugitive methane emissions. Article 1, Paragraph 1, defines the scope—as amended by the EP —as measurement, quantification, monitoring, reporting, and verification of methane emissions in the energy sector in the Union, as well as emissions abatement through leak detection and repair (LDAR), and restrictions on venting and flaring. Tools for transparency regarding methane emissions from fossil energy imports are also introduced. According to Article 1, Paragraph 2, the regulation covers oil and gas (including processing, storage, and transmission), and LNG terminals.