The EU’s Methane Regulation: Promises, Pitfalls, and Fossil Fuel Industry Pushback
On May 27, the EU Council gave its final approval to the much-anticipated EU regulation on methane emissions reduction in the energy sector. Expected to take effect by the end of June, this regulation targets methane emissions, an extremely potent greenhouse gas (GHG). The main component of fossil gas, methane, is a climate killer: If fossil gas leaks more than 3% of its methane content, it has a greater impact on the climate than coal.
While this legislation represents the EU’s first concerted effort to tackle methane emissions, both domestically and internationally, it falls short of needed action, particularly regarding fossil fuel import rules. Take a look at our analysis of the compromise agreement for further insights.
But after the adoption comes a new chapter fraught with challenges and uncertainties: implementation. The European Commission faces the task of clarifying several key aspects, including how to calculate the methane intensity of imported gas and establish “maximum methane intensity values” (i.e., an import standard). Additionally, it must determine the criteria for judging whether imported fossil fuels adhere to equivalent measurement, reporting, and verification (MRV) standards as those in the EU. Questions also linger regarding data verification and potential penalties for non-compliance.
These uncertainties raise significant concerns, as they could provide opportunities for the fossil fuel industry to influence the text, given its track record of lobbying efforts to dilute the regulation. The International Association of Oil & Gas Producers (IOGP) has already signaled its discontent, hinting at efforts to push for greater ‘flexibility’ and potentially undermine the regulation.
As a senior policy officer of the IOGP put it, “I think we need to admit that such regulations are seldom perfect from day one, and there is always room for improvement. Swift action on these improvements is essential for companies, for upstream and downstream companies, to address methane emissions efficiently and proportionately.” The clear risk is that these “improvements” will ultimately benefit only the polluting oil and gas industries.
Even before the regulation’s final approval, the fossil fuel industry was vocal about prioritizing “energy security” over stringent environmental measures. This stance, notably amplified following Russia’s invasion of Ukraine, has served as a primary justification for the massive investments in Liquefied ‘Natural’ Gas (LNG), despite its detrimental climate impacts. This narrative has been a convenient tool to resist stronger regulations, as seen in a September 2023 letter to EU policymakers where IOGP lobbied to water down key aspects of the Methane Regulation and opposed including imported fossil fuels. This is particularly significant as the EU is one of the world’s largest fossil fuel consumers and importers, with the majority of its methane emissions linked to these imports. Yet, even the International Monetary Fund (IMF) made clear in a recent report that climate action is not impacting energy security negatively. Quite the opposite, the IMF research shows how selected climate protection measures will even reverse a decade of deterioration of Europe’s energy security situation.
A report by the International Energy Agency (IEA) suggests that effective methane emissions regulations could prevent significant gas resources from being wasted through flaring and leaks along the supply chain. These measures could unlock an additional 210 billion cubic meters (bcm) of fossil gas for global markets, providing more immediate relief to energy security concerns than new investments in gas supply. All this would need to be strictly coupled with an ambitious fossil fuel phase out.
This is particularly important, as oil and gas companies may seize methane emission reduction initiatives as an opportunity to perpetuate the false narrative of fossil gas being a clean energy alternative. Shell, for instance, prominently features on its website a target to “maintain methane emissions intensity below 0.2% and achieve near-zero methane emissions by 2030,” aiming to become a “net-zero emissions energy business by 2050.” While cutting methane emissions is an essential short-term goal, it clearly appears that polluters see a strategy to keep their business alive for decades to come. Moreover, the methane regulation itself lacks foresight by failing to include any reference to a fossil fuel phase-out in the long-term.
It is therefore crucial in the coming months to remain vigilant about the implementation of the regulation, which – despite its flaws and shortcomings – is likely to face continued attacks from the fossil fuel industry. Any further weakening of the text would be devastating news for both people and the planet, sending a grim signal regarding methane emission reduction efforts in other sectors as well. Particularly concerning is the agricultural sector, responsible for over 50% of methane emissions in the EU, where a long and arduous battle lies ahead.