Methane abatement in Malaysia’s upstream oil and gas sector: A marginal cost analysis for supporting long-term energy transition
Malaysia’s upstream oil and gas (O&G) sector is a major emitter of methane, a potent greenhouse gas contributing to climate change. In support of Malaysia’s net-zero 2050 target and Global Methane Pledge commitment, this study developed a marginal abatement cost (MAC) analysis to evaluate the te...
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| Main Authors: | , , , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2025-10-01
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| Series: | Environmental Advances |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666765725000560 |
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| Summary: | Malaysia’s upstream oil and gas (O&G) sector is a major emitter of methane, a potent greenhouse gas contributing to climate change. In support of Malaysia’s net-zero 2050 target and Global Methane Pledge commitment, this study developed a marginal abatement cost (MAC) analysis to evaluate the techno-economic feasibility of methane mitigation strategies across key emission sources. Methane emissions in 2022 were estimated at 306kt using IPCC Tier 1 methodology, with emissions distributed across sources such as venting, pneumatic devices, and combustion. Abatement options were identified through stakeholder consultations and literature, with techno-economic parameters used to construct a MAC curve. Results show that 93 % of methane emissions (285kt) can be abated with total costs between USD 2.4–5.5 million, while a 30 % reduction target (92kt) is achievable at a net revenue of USD 5.2–7.0 million. Notably, 57–63 % of emissions could be mitigated at zero net cost, driven by high-impact, negative-cost options like rerouting vented gas to fuel systems and replacing pneumatic controllers. Scenario analyses confirmed the robustness of results under uncertainties in emissions estimates and source distributions, while sensitivity analysis identified a breakeven gas price of USD 5.5/MMBTU for cost neutrality. While offering a cost-effective transitional pathway, the study cautions against fossil fuel lock-in and stresses the integration of methane abatement within long-term decarbonisation strategies. The following policy recommendations were proposed: • Develop a national methane inventory with measured, source-specific emissions. • Transition to Tier 2 or 3 emission factors by initiating a methane measurement program by 2026. • Provide climate finance (e.g., tax rebates, carbon markets) to support methane mitigation investments. • Enhance data transparency and accessibility to enable multi-stakeholder collaboration. • Mandate public reporting and OGMP 2.0 alignment for all operators. • Liberalise the sector to avoid monopolistic inertia • Tie abatement incentives to renewable deployment and fossil fuel phase-out plans. |
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| ISSN: | 2666-7657 |