Standards Development

Scope

This document provides guidance and recommendations for the quantification of the carbon footprint of natural gas products in the natural gas upstream area. It sets out relevant information on the definition of the quantification objective and scope, life cycle inventory analysis, product carbon footprint impact assessment and interpretation of results, as well as product carbon footprint reporting. This document is applicable to the quantification, assessment, and reporting of the CFP and partial CFP of onshore and offshore natural gas produced from subsurface geological reservoirs in the upstream area, including shale gas, tight gas, and coalbed methane. It is intended for use as a reference by governments, relevant organizations, institutions, and other stakeholders in related activities.

Purpose

As global climate action intensifies, achieving the Paris Agreement's goal of limiting temperature rise to 1.5°C above pre-industrial levels demands accelerated decarbonization across all sectors. The oil and gas industry, being a global primary energy supplier, plays an irreplaceable role in this transition. As a major energy commodity with an annual global trade volume exceeding 1.25 trillion cubic metres, natural gas generates carbon emissions across the entire value chain.

These emissions arise not only in the upstream stages of exploration, development, gathering, transportation, and processing, but also shape the carbon intensity of many downstream activities such as refining and marketing. As a result, carbon emission management in the upstream area has a significant “lever effect.” Accurately calculating the upstream carbon footprint of natural gas is therefore a crucial entry point for accelerating decarbonization across the global value chain. Internationally, three key frameworks: ISO 14067 Greenhouse gases - Carbon footprint of products - Requirements and guidelines for quantification, PAS 2050 Specification for the assessment of life cycle greenhouse gas emissions of goods and services, and the GHG Protocol Product Life Cycle Accounting and Reporting Standard, provide generally applicable methods for quantifying carbon emissions. However, applying these methods to the upstream natural gas sector presents challenges due to its specific production characteristics, mainly reflected in three areas: 1. The industry spans multiple stages from field exploration and production to processing. There is no standard guidance on how to define system boundaries or delineate production stages. Decisions such as whether boundaries should be based on operational control or financial control, or whether regional exploration activities should be included in the accounting scope, directly influence the quantification accuracy of carbon footprint of natural gas products. 2. A comprehensive activity data inventory for the entire chain has not yet been established. In addition, there is no unified approach for allocating the carbon footprint of co-products such as sulfur and light hydrocarbons. These gaps introduce uncertainty and subjectivity into data collection and calculation, affecting the authority and quality of carbon footprint disclosures. 3. There is a lack of guidance on the selection of carbon footprint quantification methods for different stages or activities; the applicable scenarios and implementation approaches for the measurementbased method, the emission factor method, and the mass balance method are not clearly defined. Consequently, scientifically defining system boundaries, allocating co-product carbon footprints appropriately, standardizing the acquisition of activity data and selecting suitable quantification methods have become critical technical issues that must be addressed to support carbon footprint calculation in the natural gas upstream area.

In terms of quantification methodology, product carbon footprint accounting is typically based on life cycle assessment (LCA). A number of international oil companies have already applied LCA to carbon footprint accounting for oil and natural gas, thereby supporting low-carbon transition and international trade. Examples include TotalEnergies developing localised LCA databases, Shell using LCA to quantify carbon emissions from “blue hydrogen” projects, ExxonMobil establishing a “well-to-wheel” LCA model, and PetroChina applying LCA to complete full-value-chain carbon footprint analysis for oil and gas.

Therefore, this standard is intended to set the system boundary from the exploration stage to the output of natural gas processing plants and, based on life cycle assessment, to specify the accounting boundaries, data inventories, cut-off criteria and other key elements required for carbon footprint accounting at each stage. It aims to provide technical reference and practical guidance for the quantification of carbon footprints of natural gas products in global upstream area, in line with the objectives of the London Declaration to support climate action through global standards.