Mobilising Sustainable Finance for Methane Abatement

Climate Bonds Initiative is contributing to Japan’s transition through targeted research, policy engagement, and regional collaboration under the country’s Green Transformation (GX) Strategy.

In December 2024, we published A New Year’s Reflection on GX Green Transformation: Three Opportunities in Japan, identifying priority areas for strengthening Japan’s climate leadership. This work has been supported by bilateral dialogues on GX and sustainable finance, including a joint statement with Sapporo City and Hokkaido to promote regional transformation.

Six months on, we revisited developments to assess progress and the impact of ongoing geopolitical risks — particularly the urgent need to address fossil fuel dependency. Our latest brief, Revisiting Japan’s Sustainable Growth Strategy Through Energy Security and Green Transformation (GX), underscores that while LNG remains part of Japan’s energy mix, accelerating methane abatement is essential to meeting climate goals.

Climate Bonds Initiative is supporting methane mitigation in the agricultural sector through policy analysis and targeted research in Brazil.

In May 2025, we published Overview of Public Incentives for Methane Abatement Practices in Brazilian Agriculture, providing a detailed review of public policies and financial instruments that enable methane reduction. The analysis covers programmes such as Safra, ABC+/RenovAgro, the Brazilian Sustainable Taxonomy, Ecoinvest, and the National Programme for Conversion of Degraded Pastures (PNCPD), alongside Brazil’s climate commitments under its NDC.

Building on this work, we are developing a follow-up brief that will examine methane abatement opportunities and challenges in Brazil’s cattle industry.

Climate Bonds Initiative took part in the Methane Finance Working Group (MFWG) to help develop new guidance on integrating methane abatement into oil and gas debt structuring. This guidance was published on 25 June during London Climate Action Week.

Drawing on cross-institutional expertise, the framework sets out clear project eligibility criteria, safeguards, and disclosure requirements for credible methane-focused instruments in upstream oil and gas. It establishes solid core principles for financing methane abatement through debt markets and sets a precedent for incorporating methane considerations into labelled debt — a key step towards unlocking private sector investment in high-impact mitigation.

As part of this project, Climate Bonds is also analysing the policy and financing landscape in priority sectors and providing tailored policy recommendations to support credible transition plans that integrate methane abatement.

Related resources:

Guidance for Including Methane Abatement in Oil and Gas Debt Structuring

Methane Finance Working Group Website

CGEP Supporting Research – A Roadmap to Catalyse Methane Abatement in the Oil and Gas Sector Using Debt Financing

Net Zero Investor interview

Climate Bonds Initiative is contributing to Japan’s transition through targeted research, policy engagement, and regional collaboration under the country’s Green Transformation (GX) Strategy. In December 2024, we published A New Year’s Reflection on GX Green Transformation: Three Opportunities in Japan, identifying priority areas for strengthening Japan’s climate leadership. This work has been supported by bilateral dialogues on GX and sustainable finance, including a joint statement with Sapporo City and Hokkaido to promote regional transformation.

Six months on, we revisited developments to assess progress and the impact of ongoing geopolitical risks — particularly the urgent need to address fossil fuel dependency. Our latest brief, Revisiting Japan’s Sustainable Growth Strategy Through Energy Security and Green Transformation (GX), underscores that while LNG remains part of Japan’s energy mix, accelerating methane abatement is essential to meeting climate goals.