Methane and Nitrous Oxide Emissions Liabilities by 2030
Methane (CH₄) and nitrous oxide (N₂O) are the second- and third-largest contributors to global warming after CO₂, accounting for roughly 16% and 6% of global greenhouse gas (GHG) emissions, respectively (in CO₂-equivalents). Because of their high global warming potentials (CH₄ ~28× CO₂; N₂O ~265× CO₂ over 100 years), pricing these gases can create very large nominal "liabilities" per ton emitted.
Future carbon prices are expected to rise significantly by 2030: the NGFS climate finance scenarios project carbon prices on the order of $100 to $200 per ton CO₂ by 2030. At such price levels, the implied liability of methane and N₂O emissions is enormous. For example, at $150 per tCO₂ (roughly the forecasted EU carbon price in 2030), one metric ton of CH₄ would carry an equivalent cost of about $4,000+ (since 1 t CH₄ ≈ 28 tCO₂e), and one ton of N₂O would exceed $40,000 in CO₂-equivalent value.
On a global scale, annual anthropogenic methane emissions (on the order of 8–10 GtCO₂e) would represent $800 billion to $1.6 trillion of liability per year by 2030 (at $100–200/tCO₂), while N₂O emissions (~3 GtCO₂e) would be $300–600 billion. These figures illustrate that beginning in 2030, CH₄ and N₂O could collectively carry trillions of dollars in notional emissions liabilities under robust carbon pricing regimes.
Moreover, the U.S. EPA's latest social cost estimates for these gases reinforce their high damage value – for 2030 emissions the Social Cost of Methane is roughly $2,400 per ton CH₄, and Social Cost of N₂O around $66,000 per ton (using a 2% discount rate) – underscoring why markets and regulators are moving to internalise these costs.
Growth of Carbon Credit Markets and Inclusion of CH₄ & N₂O
Global carbon credit markets – both compliance and voluntary – are expanding rapidly, and their projected size reflects the looming liability (and opportunity) associated with all GHG emissions, including CH₄ and N₂O. Voluntary carbon markets alone are forecast to grow at least 5–10× by 2030. Energy major Shell and BCG project the voluntary market (worth $2 billion in 2021) to reach $10–40 billion by 2030, trading 0.5–1.5 billion tonnes CO₂e annually. This implies a large demand for credits from methane abatement projects (e.g., landfill gas capture, livestock methane reduction) and even emerging N₂O reduction projects.
On the compliance side, national and regional carbon pricing systems are scaling up: the EU Emissions Trading System is extending its reach (with carbon allowance prices expected around €149 ($156) per tCO₂ by 2030), and many countries (Canada, EU, UK, etc.) have carbon price trajectories well above $100/tCO₂ by 2030.
Overall, when combining compliance markets (e.g., cap-and-trade, carbon taxes) and voluntary offsets, analysts see the global carbon market's value reaching staggering levels by 2030. One analysis projects the total carbon credit market could grow from ~$0.5 trillion in 2023 to over $3 trillion by 2030. Even if only a quarter of this value is tied to methane and N₂O (proportional to their share of emissions), that would represent hundreds of billions to a trillion dollars of CH₄ and N₂O credits by 2030.
Regulatory Frameworks Integrating CH₄ and N₂O
Policy developments and market rules are evolving to explicitly include methane and nitrous oxide in carbon pricing and crediting frameworks, which bolsters their monetised liability. For example, the EU is expanding its carbon regulatory scope: the revised EU ETS will not only cover CO₂ from industry and energy but also start pricing CH₄ and N₂O emissions from maritime transport by 2026.
In the United States, regulators have also recognized the need to price methane: the 2022 Inflation Reduction Act initially instituted a federal methane emissions charge starting at $900/ton CH₄ (in 2024), rising to $1,500 in 2026 and beyond. This equates to roughly $50–60 per tCO₂e for methane – a significant price signal to cut emissions.
Internationally, the Paris Agreement's Article 6 framework is being put in place to allow countries to trade emissions reductions across borders – including credits from methane and N₂O mitigation – which could unlock a global compliance market for these gases later in the 2020s.
ASL's Solution: Addressing the Emissions Challenge
Our Business Model
At ASL, we've developed a sustainable business model that directly addresses these challenges:
- We generate revenue from gate fees for processing sludge mixed with industrial and agricultural waste
- Our patented process is designed for processing mixed waste & variable waste by balancing the C:N ratio
- The nutrients from waste are sterilised and made safe for sale as fertiliser comparable to 15% Potash Super Mag N which costs NZ$ 493/MT
- Renewable energy can be exported and sold via peaking plants at 100TPD scale
- Instead of natural gas, we process waste, burning methane to produce electricity and/or process heat
Current alternatives for waste management include landfills, sludge ponds, geo bags, and compost. Existing wastewater treatment in New Zealand uses settling ponds, which is a low-cost system but produces poor effluent quality.
How We Reduce Emissions
Our process offers multiple pathways for emissions reduction:
- Diverting waste from landfills
- Capturing methane that would otherwise be released
- Replacing fossil fuel-based energy generation
- Reducing landfill methane emissions
- Reducing nitrous oxide emissions by substituting synthetic fertiliser
Market Opportunities in Methane and N₂O Reduction
Climate finance researchers expect an order-of-magnitude expansion of carbon markets by 2030, with CH₄ and N₂O mitigation playing an increasingly important role in both compliance and voluntary segments. Notably, inexpensive methane abatement opportunities (many under $50/tCO₂e) could supply cost-effective credits, and the demand for short-lived pollutant reductions is rising as companies and countries seek rapid climate impacts.
This growth is underpinned by global initiatives and investor pressure: over 110 nations have joined the Global Methane Pledge (aiming to cut methane 30% by 2030), and private-sector coalitions are channeling finance into methane projects. All these trends point to a robust market valuation for CH₄ and N₂O emissions reductions in the coming decade.
Meanwhile, standards bodies in the voluntary market (Verra, Gold Standard, etc.) have developed methodologies for methane capture projects and N₂O abatement (e.g., nitric acid plant N₂O destruction, improved fertilizer management), integrating those into the supply of tradable carbon credits.
The Way Forward
By 2030, methane and nitrous oxide will no longer be "second-class" gases in carbon markets but fully priced elements of climate liability and opportunity. This alignment of policy with science is crucial: it ensures that the cost of CH₄ and N₂O emissions – potentially on the order of one trillion dollars+ globally – is recogni\sed in markets and investment decisions, driving capital toward mitigation solutions like those offered by ASL.
Our waste management technology not only addresses an immediate environmental need but also positions organisations to avoid potentially massive financial liabilities as carbon pricing frameworks mature. Strong price signals and expanding carbon market mechanisms by 2030 are set to capture the outsized climate impact of methane and nitrous oxide, translating it into a quantifiable economic value that will influence global mitigation efforts and credit markets.
ASL stands at the forefront of this transition, offering practical, proven solutions that turn waste challenges into opportunities while contributing significantly to global climate goals.
Sources: Climate finance and carbon market research (IEA, IMF, World Bank), regulatory announcements (EU ETS directives, U.S. EPA), and market forecasts by organisations like BloombergNEF, Shell/BCG, and McKinsey have all highlighted the rising role of CH₄ and N₂O in carbon markets. These projections indicate a substantial market value for methane and nitrous oxide emissions beginning in 2030, driven by higher carbon prices, growing market demand for non-CO₂ credits, and new rules integrating these potent gases into climate compliance regimes. The convergence of these trends suggests that methane and N₂O will no longer be "second-class" gases in carbon markets, but rather fully priced elements of climate liability and opportunity by 2030.