Natural Gas

Countries and regions making notable progress to advance this technology include: 

• The United States, where six projects were announced to equip natural gas-fired power plants with carbon capture, utilisation and storage (CCUS).  
• The United Kingdom, where Net Zero Teesside Power, expected to come online in 2027, could be one of the first commercial scale gas-fired power stations with CCUS. A UK government announcement in March 2023 confirmed that the project is now proceeding to investment negotiations. 
• On addressing methane emissions from natural gas, Nigeria became the first African country and Colombia the first South American country to regulate methane emissions from their oil and gas sectors. 
  

In 2022 CO₂ emissions from gas-fired power plants largely stayed at their 2021 levels. High gas prices led to gas-to-coal switching in many regions. Decreases in emissions from gas-fired power in Asia Pacific and other regions were offset by emission increases in the United States, Eurasia and the Middle East. 

To get on track with the Net Zero Scenario, emissions from unabated gas-fired plants must fall by about 2% on average annually through to 2030. In addition to a gradual reduction in gas-fired generation, this can be accomplished through a combination of applying CCUS, increasing plant efficiencies and co-firing hydrogen-based fuels. 

In 2022 gas-fired generation remained relatively unchanged compared to 2021, representing more than 20% of global electricity generation. Declines in some countries (such as China and India, among others) were largely offset by a rise in gas-fired generation in the United States, Eurasia and the Middle East. For example, gas-fired output last year fell by around 35% in India and by more than 10% in China. However, in the United States, gas-fired generation grew by around 7% in 2022, reversing a 3% decline in the previous year. Generation from gas plants also increased in Eurasia (up 3% compared to around 8% the previous year) and the Middle East (up more than 1% compared to around 4% the previous year).  

In the European Union, the supply shock from Russia’s invasion of Ukraine drove up natural gas prices on European hubs to record levels. Month-ahead prices on TTF – Europe’s leading gas hub – averaged more than EUR 130/MWh in the first 11 months of 2022, more than 7 times as high as the average between 2016 and 2020. Despite these high prices and reduced nuclear power and low hydro output, gas-fired output remained relatively unchanged in the European Union compared to 2021. 

In the Net Zero Scenario, unabated gas-fired generation declines by an average of around 2% per year by 2030.  

Alongside the broader structural changes targeted by the Fit for 55 package and the REPowerEU plan, there have been additional policy initiatives to increase the resilience of European gas markets, strengthen solidarity and limit excessive price spikes. For example, in July 2022 the European Commission adopted the European Gas Demand Reduction Plan to provide best practices and guidance on reducing regional demand for gas. This includes switching away from gas use in industry, power and heat sectors towards renewables and cleaner energy sources.  

Thanks to ongoing policy support for renewables, around 50 GW of wind and solar was installed in the European Union in 2022, a record high. These additions avoided the need for around 11 billion cubic metres (bcm) (nearly 400 GJ) of natural gas use in the power sector – the single largest structural driver of reduced natural gas demand in that region.  

Unlike certain industrial applications with relatively concentrated CO₂ streams, such as natural gas processing, deployment of CCUS at gas-fired power plants has lagged. As the world moves toward a net zero future, CCUS-equipped gas-fired plants can help meet the growing need for system flexibility and provide important system balancing services as the share of variable renewable electricity in the generation mix increases. 

Since January 2022 around 15 CCUS projects at gas-fired power plants were announced. In total nearly 50 Mt CO₂ of capture capacity at gas-fired power plants is in the project pipeline, primarily in the United States and United Kingdom. 

To get on track with the Net Zero Scenario around 230 Mt CO₂ must be captured from the power sector by 2030 – up from just under 2 Mt CO₂ today. 

In 2022 natural gas accounted for just under 30% (around 35 Mt) of global methane emissions from the energy sector. 

Launched at COP26 in November 2021, the Global Methane Pledge aims to catalyse action to reduce methane emissions. Led by the United States and European Union, the pledge now has around 150 country participants who have collectively agreed to reduce methane emissions by at least 30% below 2020 levels by 2030. Several countries have also released or are working on national methane action plans to support this. Many of them published landmark policies and actions on methane in 2022, including Nigeria, Colombia and the United States. Canada and the European Union are expected to issue new methane regulations in 2023. 

• Eren Cam, IEA