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The EU is set to recommend a three-year delay on penalties for energy importers that do not comply with the bloc’s new methane emissions rules, after fierce lobbying from the US and member states that raised fears about gas supply risks.
Under the present regulation, energy companies that fail to show they are properly monitoring, reporting and verifying leaks and flares of the highly potent greenhouse gas could face penalties by member states of up to 20 per cent of their annual revenue from next year.
But the measure has come under intense pressure from major gas importers, the US and Qatar, and companies such as ExxonMobil and Germany’s Uniper. The International Energy Agency has also suggested that it could put at risk Europe’s energy supply, due to the potentially limited availability of gas that meets the EU’s high monitoring standards.
The European Commission is planning next week to recommend to member states that they do not penalise infringements of the rules over the first three years, according to several officials and diplomats.
The recommendation will not be legally binding, and is unlikely to satisfy both oil and gas importers and more than a dozen member states heavily reliant on gas supplies that have called for the rules to be changed.
In a joint letter sent to European leaders last month, the US, Qatar and other major gas suppliers to Europe said: “Because legal compliance remains paramount, exporters and importers alike are unwilling to enter into contractual agreements that knowingly violate EU law,” adding that “significant supply and price impacts are a certainty”.
The regulation is one of several EU obligations that have been staunchly opposed by the Trump administration and major firms. Oil and gas majors have also aimed to quash corporate sustainability rules, while Big Tech groups have pushed back against the bloc’s array of digital legislation.
A coalition of more than a dozen member states led by the Czech Republic had also called on the commission to make a targeted amendment to the methane regulation to postpone its enforcement for three years. Germany has also backed a review of the plans.
The commission has been reluctant to reopen the legislation, in part to avoid further weakening of the text, people familiar with the matter have said.
Other member states have opposed any weakening of the ambition, with one country saying in behind-closed-doors discussions earlier this week that the bloc should not allow its energy policy to be written by the US.
Although some analysts have warned that the new rules would cause supply issues, research commissioned from Rystad Energy by the Environmental Defence Fund Europe, a non-profit group, has said there are large volumes of oil and gas that already have high levels of methane reporting attached, although it says a system is needed to monitor those imports.
Methane is more than 80 times more potent than carbon dioxide at trapping heat in the atmosphere over a 20-year period. Its control is among the key targets of UN pledges to limit global warming.
A spokesperson for the commission declined to comment.
