Key facts
- EU Energy Commissioner Dan Jorgensen is considering a one-year delay for the methane import regulation.
- The regulation requires energy exporters to track, measure, and report methane emissions.
- The U.S. and Qatar have argued the rule is impossible to implement and could harm energy supply and prices.
- Wood Mackenzie stated that most oil and gas exporting countries outside Europe are not ready to meet the EU's standards.
- Verification of methane emissions data is a critical missing component of the EU rule.
The European Union is contemplating a delay to its methane emissions regulation for energy imports, a move driven by concerns over potential disruptions to energy supply and rising prices. Energy Commissioner Dan Jorgensen indicated that the bloc is exploring the possibility of postponing the import component of the legislation by one year.
Jorgensen told Bloomberg that his services are investigating the postponement to allow market actors sufficient time to comply with the new rules without negatively impacting the EU's energy security and prices. The regulation, scheduled to take effect in January, mandates that energy exporters to the EU track, measure, and report their methane emissions, with verification required.
Major energy suppliers, including the United States and Qatar, have voiced strong opposition, arguing that the regulation is practically impossible to implement. They contend that requiring producers to track and report methane emissions for every molecule sold to the EU is unfeasible and could lead to higher prices and reduced supply. Qatar had previously stated it would cease selling liquefied natural gas (LNG) to the EU if the rule were enforced. Wood Mackenzie, a consultancy, noted that most oil and gas exporting nations outside Europe are not yet prepared to meet the EU's equivalence standards, particularly concerning the verification of emissions data, which remains a critical missing piece.
Despite the U.S. and Qatar's objections, the U.S. has increased its LNG sales to Europe, partly due to Qatar's unrelated reduction in sales. However, the methane regulation could still alter this dynamic, especially during peak winter demand. The EU's current energy situation is already strained, with fuel prices at record highs and gas prices exceeding 70 euros per megawatt-hour, making further price increases a significant concern.