The global oil and gas industry will require $600 billion to achieve its target of cutting emissions this decade, which is only a fraction of the record windfall income that producers accrued in 2022, according to International Energy Agency.

The Paris-based organisation in a new report said that oil and gas operations accounted for about 15% of energy-related greenhouse gas emissions in 2022, equivalent to 5.1 billion tonnes of CO2, and the industry has the ability and resources to cut them quickly and cost effectively.

In the IEA’s Net Zero Emissions by 2050 Scenario, the emissions intensity of these activities falls 50% by the end of the decade. Combined with the reductions in oil and gas consumption in this scenario, this results in a 60% reduction in emissions from oil and gas operations in 2030.

The report — Emissions from Oil and Gas Operations in Net Zero Transitions — identified five key levers to achieve this reduction: Tackling methane emissions; eliminating all non-emergency flaring; powering upstream facilities with low-emissions electricity; equipping oil and gas processes with carbon capture, utilisation and storage; and expanding the use of low-emissions hydrogen in refineries.

“Tackling methane emissions is the most important measure to limit emissions from the industry's operations,” said the agency led by executive director Fatih Birol.

The agency added it is also one of the most cost effective and impactful measures to cut emissions across the economy and limit near-term global warming.

Even though the companies that account for just under half of current global oil production have announced plans to reduce emissions from their operations, a far broader coalition — with much more ambitious targets — is needed to achieve meaningful reductions across the oil and gas industry and beyond, the IEA said.