The EU struck an informal agreement on its first ever law to tackle methane emissions in the energy sector, following late-night negotiations in Brussels that will oblige importers of fossil fuels to match minimum standards from 2030.
At 3 am on Wednesday (15 November), negotiations concluded on the EU’s law to tackle methane emissions from the energy sector, the world’s second-largest greenhouse gas.
“The European Union is finally introducing binding measures to reduce the climate killer methane,” said Jutta Paulus, a Green lawmaker from Germany who negotiated the deal on behalf of the European Parliament.
Her counterpart, Spanish Ecological Transition Minister Teresa Ribera, who represented the bloc’s 27 countries in the talks, hailed “a great achievement” that “represents a crucial contribution to climate action”.
With the global climate conference COP28 starting on 30 November, EU lawmakers were keen to have something to show, as China and the US had already announced their own plans to tackle methane earlier.
“I am very pleased that we will go to the UN climate conference in Dubai with full hands,” Paulus said in a statement.
The political agreement is provisional and must now be approved by ministers and Parliament before entering into force. Formal approval is considered a formality.
Unlike CO2, methane is currently neither tracked nor tackled. “Methane was a blind spot of our climate strategy. It is not anymore,” said Pascal Canfin, a French liberal who was part of the Parliament’s negotiating team.
The agricultural sector, which makes up 53% of the EU’s methane emissions, is not covered by the law.
Obligation to detect and repair leaks
At the heart of the EU methane law is an obligation for energy companies to detect and repair leaks from oil and gas infrastructure, an obligation that will extend to fossil fuel imports, which cause a large share of the bloc’s methane emissions.
Simultaneously, the EU must build a comprehensive methane emission database for the bloc.
On leakage detection and repair, or LDAR, negotiators settled on thresholds of 17 grams of methane per hour for underwater leakage, 5 grams for underground and 1 gram for above-ground.
In line with industry demands, the European Commission will be empowered to change thresholds one year after the law comes into force, via an implementing act.
Imports of oil and gas, which make up 80% of EU consumption, will be covered as well. From 2027, importers must report data at a quality matching EU standards.
Here again, the Commission was empowered to set methane intensity standards three years after the law comes into force.
Producers whose fossil fuels are associated with a large degree of methane emissions will then be barred from dealing with EU importers or renewing existing contracts. Importers whose contracts are decided over the long term shall be asked to “do their best” to convince their suppliers to accept similar new clauses.
Contracts like that of Austria’s OMV with Russia – which will oblige the company to buy Russian gas until 2040 – will thus not be affected.
Still, producers located in the US or Russia – the two biggest emitters of methane – will be affected nonetheless.
The first phase will focus on data collection and the creation of a methane emitters global monitoring tool and a super emitter rapid reaction mechanism, followed by measures to ensure equivalent monitoring, reporting and verification measures that will apply as of 2027.
As of 2030, maximum methane intensity values will start to apply, meaning EU importers could be barred from buying the world’s dirtiest gas, oil and coal – although that provision will apply only to new contracts.
Whether an import ban happens or not will depend on the standards defined by the European Commission – and on EU countries’ willingness to enforce them.
“The competent authorities of each member state will have the power to impose administrative penalties if these provisions are not respected,” said a statement by the Council of the EU, which represents the 27 member states.
Unlike with Europe’s antitrust rules, potential penalties will not be based on global turnover.
Reporting obligation
Domestically, the law will require fossil fuel companies whose production is located in Europe, to begin reporting data 18 months after the law comes into force. The data should then become more granular as companies must measure every site individually two years after.
Four years after the law comes into force, every single source of methane in the EU – from abandoned coal mines to freshly drilled oil wells – must be reported. Reporting will be annual, with inspections at least every three years.
Mines older than 70 years are not covered by the law. Neither are mines that have been flooded or plugged for more than ten years. Oil and gas wells closed more than 30 years ago are not covered either.
“The outcome is more than we’d hoped for going in,” said one EU source who pushed for more climate ambition in the negotiations.
[Edited by Frédéric Simon.Zoran Radosavljevic]
