One year ago, the European Commission proposed the first-ever EU law to cut methane emissions, delivering on an EU methane strategy published in 2020. The proposal came on the heels of the EU convincing more than 100 countries to sign a Global Methane Pledge – to reduce methane emissions by at least 30% by 2030 – at the COP26 climate summit in Glasgow. Since then, however, the outbreak of the Ukraine war in February and the accompanying energy crisis have shifted focus to the immediate need of finding replacements for Russian gas imports. The Commission’s REPowerEU strategy, adopted in May, acknowledged the link between energy security and the abatement of fossil methane emissions but had little else to say about the issue.
The result is that the initial proposal, already decried as too weak by experts, has sat gathering dust on the shelf – until recently. In the past few weeks the file has started to move, with two committee debates in the European Parliament already this month and an initial EU Council debate among energy ministers pencilled in for 19 December. Ahead of that meeting, a group of NGOs has written to the 27 EU ministers warning that since the proposal was put forward a year ago the world has moved on, and many countries including Canada, Nigeria and the US have adopted stronger and more ambitious measures to cut methane from the oil and gas sector. With the Council now discussing a draft that would weaken even the Commission’s proposal, the fear is that the EU is going to plunge from being a leader to a laggard on this issue.
“Underwhelming EU legislation will not only limit the methane emissions reduction in the EU but will also weaken the international push to cut methane emissions globally,” the letter warns. “If the EU adopts weaker measures than its partners… how can we still lead internationally on this issue and ask our global partners to cut their emissions?”
The concern is that EU governments have come to view any energy issue that is not related to energy security and the Ukraine war as a distraction. To counter this, campaign group the Environmental Defense Fund (EDF) has placed billboards around Brussels’ EU quarter this month that link the methane issue to energy security, driving home the importance of an ambitious EU law with messages like “cutting methane emissions in the oil and gas industry can fight climate change AND help secure Europe’s energy supply”.
“There is the war, the energy crisis, and the methane regulation has unfortunately been seen as something very technical that has nothing to do with the energy crisis,” says Flavia Sollazzo, a senior director at the EDF. “This is not the case. … [We] try to make the link between energy security and methane emissions, because up till now it has been tackled only as a climate challenge.
“The better you approach leak detection the more gas you can prevent from being emitted into the atmosphere and the more gas you have available for use,” she adds.
The campaign portrays tackling methane as a win-win for everyone: for energy companies that are literally leaking money, for consumers who will be more energy-secure if the leaked methane is instead used for energy, and for the climate because methane emissions cause 25% of global warming. Methane has more than 80-times the warming power of CO2 for the first 20 years after it reaches the atmosphere.
Why the leaks?
If tackling methane emissions is such a no-brainer, why hasn’t it been done at significant scale? The reason is because so little is known about them. The International Energy Agency estimates that 135 million tonnes of CO2 equivalent – or $700m – is lost to methane leaks in the energy sector every year during extraction and transmission – but it is just an estimate. “We just don’t have a clue how much anthropogenic methane emissions are being emitted,” said Malcolm McDowell, who is in charge of the Commission’s methane strategy, at an event in Brussels in early December. “We don’t know the sources of those methane emissions, the reasons for them, and we have no idea of their magnitude… in fact, we have reason to believe the oil and gas industry themselves don’t know.”
However, there are recent advances in tracking where methane leaks occur. That is why campaigners say now is the moment to pass the EU law. Recent investigations have found that atmospheric concentrations of methane are increasing faster now than at any time since the 1980s and the amount of methane in the atmosphere has more than doubled over the last century. The research finds that methane emissions from the energy sector could be around 70% higher than what is reported in official data. This week a new report by Standard & Poor’s also documents higher-than-previously-reported emissions, and concludes that by reducing these preventable losses in six key export regions, more than 80 billion cubic metres (m3) of methane could be captured and profitably brought to market. That is almost 60% of Europe’s pre-war annual imports from Russia – and does not include the amount that could be recovered in the world’s other regions.
Attention to the issue has also been focused by the Nord Stream pipeline disaster. The methane released from those explosions is estimated to be the largest-ever release of methane from the oil and gas industry, with a climate impact equivalent to the annual emissions of two million gasoline cars or 2.5 coal-fired power plants. That may seem like a lot, but “it is the equivalent of what the oil and gas industry emits every two days globally”, Sollazzo says.
Still, there is inertia within the industry to act on these leaks. That, Sollazzo says, is where EU legislation has to step in. “Studies from 2020 showed that companies were still making profits even if they lost [a large amount] of the gas,” she says. "Now, with the energy crisis, this is even more. Some companies think that if they are already making profits without [fixing the leaks], why should they do more? For them, making investments would mean that they have to reduce their revenues [in the short term].”
The other problem is the limited scope of the EU proposal. Because the EU is such a massive energy importer and imports from countries with very high flaring intensity, the embedded flaring intensity of EU oil imports is 7.2m3 per barrel (m3/barrel), according to an estimate by flare capture specialist Capterio. By comparison, oil produced in the EU flares just 1.3m3/barrel on average, and the global average is 5.1m3/barrel. It is therefore crucial that the EU’s methane law includes emissions from imported energy, but there has been major pushback to that idea.
Crucial elements of the law
Speaking at a recent event in Brussels, Commission Vice-President Frans Timmermans, the EU's climate chief, said the Commission sees the methane strategy as “the cheapest and fastest way to slow down global warming in the years ahead”. He said the Commission proposal, which relies on existing technology, would reduce global warming by 0.2°C between 2040 and 2070. “The EU is taking this very seriously,” he insisted.
However, there is frustration that the Commission’s proposal only focuses on the EU’s domestic emissions, which pale in comparison to emissions from imports. Campaigners are pushing the Parliament to strengthen the law by making it apply to imported energy as well, but in practice there has been a worrying impulse in both the Parliament and Council to weaken even the domestic requirements, risking a loss of global leadership.
One of the things getting pushback in the Council is the proposed deadline of the end of 2023 for the highest level of monitoring and verification that is technologically available. Some national governments say companies need more time than this. There is resistance in the Council to a performance standard to measure progress, while MEPs are pushing for one.
In general, it is countries that already have robust frameworks in place like Germany and the Netherlands that support a more ambitious methane regulation, and countries further behind such as Spain and eastern Europe that resist it. Romania, which has the EU’s highest methane emissions from oil and gas in absolute terms, is particularly concerned about overly stringent legislation. In the Parliament, the centre-right EPP group has led objections, but discussions in both institutions remain at an early stage.
[Keep up with Energy Monitor: Subscribe to our weekly newsletter]
The NGOs who wrote to the EU ministers list several crucial elements for a strong methane regulation: strict rules for monitoring, reporting and verification to the highest standards by the end of 2023; monthly (rather than quarterly) requirements for leak monitoring; a ban on venting, with exceptions only for emergencies; and a binding methane intensity target for natural gas imports to the EU.
The Commission has stressed that proper accounting at EU level is an important start. “We want to try to impose on [the oil and gas sector] the kind of obligations that will ensure they will soon have knowledge of their methane problem,” said McDowell. “We thought we needed to start with… a high standard of measurement and reporting and verification.” There is a precedent for this, he added, in the Oil & Gas Methane Partnership, which counts more than 80 oil and gas producers among its membership.
Ministers may adopt a position on the legislation at their debate on 19 December, although it is more likely this will have to wait until early next year, after the Czech Republic passes the Council’s rotating presidency to Sweden on 1 January. A Parliament committee vote on the proposal has been scheduled for late February.