Final Trilogue on the Methane Regulation: It is time to plug the leak on methane emissions
Brussels, 13th November 2023
What’s happening: Tomorrow, Member states and the European Parliament (EP) will have their final negotiation session on the Methane Regulation, a crucial text to reduce methane emissions from the energy sector. Fossil gas is essentially composed of methane. The Regulation is a major piece in the puzzle towards a full fossil gas phase out needed to align with the Paris Agreement and limit temperature increase to 1.5°C.
Why it is important:
Methane has a significant impact on our climate as it is a very potent greenhouse gas with a warming potential more than 80 times bigger than carbon dioxide. It is important to address methane leakages from domestically produced fossil gas but even more from imported gas as the overwhelming majority of the gas consumed in the EU comes from imports, with dangerous methane leakages happening across the entire supply chain.
In response, the European Parliament brought forward ambitious measures to address methane emissions from imported energy sources. Whereas Member States repeatedly tried to weaken the Regulation, avoiding to touch upon imports and introducing major loopholes to the mitigation measures such as Leak Detection and Repair (LADR), limits on routine venting and flaring (LRVF) and Monitoring, Reporting and Verification (MRV) measures.
“Co-legislators, especially the Council, need to increase their ambition and agree on extending methane mitigation measures to imports and for this to start well ahead of 2030. Only this will make the Regulation truly effective to drastically reduce one of the biggest contributors to the climate crisis, methane emissions. Anything less than this will severely damage the EU’s credibility at COP 28 regarding its commitments under the Global Methane Pledge.” – Esther Bollendorff, Senior Gas Policy Expert at CAN Europe.
The Global Methane Pledge requires signatories to reduce global methane emissions by at least 30% from 2020 levels by 2030, rather than just starting to take action by 2030, as it currently stands in the negotiations (see below). Alongside that, the IEA has stated again in October that acting on methane emissions is a low hanging fruit as it is one of the most affordable opportunities to limit global warming in the near term.
Negotiations at stake:
Member States only recently showed some openness towards tackling the elephant in the room, which led the Commission to propose a compromise on imports. Even if this proposal is a first step forward in the right direction, improvements are still needed, and will be at the heart of the political debates for this last night of negotiations.
- Action required before 2030: The timeline of implementations on articles 27, 27a and 27b needs to be shortened. The Commission’s proposal sets up a three-phase approach on a disproportionately extended timeline, which would lead to the first concrete methane emissions reductions measures to be applied by companies only in 2030. With the Global Methane Pledge, the EU committed to reduce its emissions by 2030, not starting in 2030. Thus, the proposed timeline should be shortened in two ways:
- First, this timeline can be advanced by 2 years, obliging importers to demonstrate application of MRV measures from 2026 onwards, as initially proposed by the EP, and not from 2028 onwards as proposed by the Commission and the Presidency.
- Second, the deadline for the Commission to set forth a methodology to calculate methane intensity and define a future performance standard, currently proposed at 3 years after the Regulation’s entry into force, could be shortened to 2 years. This would require a proposal to be tabled in 2026, followed by a phased implementation towards a minimum intensity value.
Monitoring, Reporting and Verification (MRV) and an intensity standard are not enough: additional mitigation measures should be extended to imported oil, coal and gas. Leak Detection and Repair (LDAR) and limits to venting and flaring are the most important, near-term and effective way of reducing methane emissions and can be extended immediately. At the very least, a ban on venting and flaring, which represents 80% of the methane emissions, should be included with the MRV obligations and be applied from 2026 onwards. Ending routine venting and flaring is critical for stopping waste, while protecting the climate and offering relief in gas markets rather than investing in new supply. Furthermore, flaring data can be tracked by satellites, providing multiple options for verification at the country and company level.
As article 27a extends obligations to new contracts concluded after the Regulation’s entry into force, and for existing contracts only requires importers to take reasonable efforts to ensure compliance, this Article should clarify that penalties shall still apply to importers, should they fail to ensure compliance or amend existing contracts. The penalties in article 30 should stay strong and also be extended to LDAR and venting and flaring measures.
- Cut out the loophole in Article 14 §2 aa on the 1% exception for LDAR: The Council created a loophole by allowing dramatically reduced LDAR inspection frequency for operators demonstrating that less than 1% of their components and “subcomponents” have been found to be leaking. While, at first glance, this reasoning could be understood as a gesture towards companies making efforts in effectively addressing their leaks, this exception actually incentivises companies to not find their leaks. This approach was tried in the past and abandoned 15 years ago by the US for its inefficiency, rewarding companies who did not find their leaks. Moreover, this approach is not scientific: leaks are very hard to predict and there is no evidence that a low number of leaks today indicates less chance of leaks in the future. This 1% could hence amount to a lot more methane emissions, as the leakages are not limited to specific components but occur on the entire supply chain.
Notes to the Editor
Esther Bollendorf, Senior Gas Policy Expert, E: firstname.lastname@example.org M:+32 484 564 680
James O’Connor, Communications Coordinator, E: email@example.com M: +353 83 389 6259