Fossil gas in taxonomies: what lies beneath

The report argues that fugitive methane emissions significantly increase the lifecycle emissions of fossil gas, making it comparable to coal and oil in climate impact. It examines global sustainable finance taxonomies, noting that while most exclude hydrocarbons, some include fossil gas under strict conditions. Specifically, it analyzes the EU Taxonomy, concluding that its rigorous carbon intensity thresholds and lifecycle emission requirements make new gas-powered plants economically unviable compared to renewable energy alternatives.

• Fugitive methane emissions from fossil gas operations significantly increase its climate impact; when correctly calculated, these emissions double the lifecycle emissions of fossil gas-fired generation, making it comparable to oil- and coal-fired generation.
• Methane leakage rates vary by region, with the US average estimated between 1.4% and 3.7%, and Canada's rate at least 2.7%, which is double previous estimates.
• The addition of just 3% fugitive emissions makes fossil gas generation's greenhouse potential almost comparable to coal. On a 100-year timeframe, a 5% leakage rate is on par with low-methane content coal mines, and 7.6% is on par with average coal mine methane leakage.
• Most green or sustainable taxonomies exclude hydrocarbon-related activities. Where fossil gas is included, it is typically subject to time constraints (sunset dates of 2030–2035) and emission thresholds, such as 100g CO2e/kWh.
• The EU Taxonomy's criteria for fossil gas are so restrictive that they likely render new power plants economically unviable. The 100g CO2e/kWh lifecycle threshold and 270g CO2e/kWh direct emissions threshold are currently unachievable without CCS/CCUS installations.
• The levelised cost of energy for gas power plants with CCS is estimated to be significantly higher than ordinary gas plants and nearly twice the cost of renewable energy combined with storage.

APA

Korostikov, M., & Boule, B. (2023). Fossil gas in taxonomies: what lies beneath. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Fossil-Gas-in-Taxonomies-What-Lies-Beneath.pdf

Chicago

Korostikov, Mikhail, and Bridget Boule. Fossil gas in taxonomies: what lies beneath. Climate Bonds Initiative, 2023. https://www.climatebonds.net/files/documents/publications/Fossil-Gas-in-Taxonomies-What-Lies-Beneath.pdf.

Wikipedia

{{cite report |last1=Korostikov |first1=Mikhail |last2=Boule |first2=Bridget |title=Fossil gas in taxonomies: what lies beneath |publisher=Climate Bonds Initiative |date=November 2023 |url=https://www.climatebonds.net/files/documents/publications/Fossil-Gas-in-Taxonomies-What-Lies-Beneath.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{korostikov2023fossil, author = {Korostikov, Mikhail and Boule, Bridget}, title = {{Fossil gas in taxonomies: what lies beneath}}, institution = {Climate Bonds Initiative}, year = {2023}, month = nov, url = {https://www.climatebonds.net/files/documents/publications/Fossil-Gas-in-Taxonomies-What-Lies-Beneath.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }