EU Methane Regulations

In November 2023, the European Union reached a provisional agreement on a new EU Regulation on methane emissions reduction in the energy sector. The Regulation was first proposed in December 2021 as part of the Fit-for-55 package, following the adoption of the EU Methane Strategy in 2020. 
The regulation contains the following key measures to minimise the release of methane in fossil fuel operations within the EU:

• Mandatory measurement, reporting and verification (MRV) requirements for emissions at the source level, including for non-operated assets. Under Article 12, companies must submit reports within 18 months for operated assets and 30 months for non-operated assets including the following information: 
  • emission source type and location;
  • data per detailed emission source type, reported in tonnes of methane and in tonnes of CO2 equivalent;
  • detailed information on the quantification methodologies;
  • all methane emissions for operated assets;
  • data on share of ownership and methane emissions from non-operated assets multiplied by the share of ownership;
  • a list of the entities with operational control of the non-operated assets.
• Mandatory leak detection and repair (LDAR) of equipment for all oil and gas facilities.
• Ban of routine venting and flaring in the oil and gas sectors and the restriction of non-routine venting and flaring to unavoidable circumstances (i.e. under safety hazards or in case of equipment malfunction).
• Obligation for oil, gas and coal sectors to complete inventory, emissions monitoring and mitigation plans for closed, inactive, plugged and abandoned assets.
• Limitation of venting from thermal coal mines starting in 2027, with tighter restrictions from 2031.

The regulation also contains a number of measures aimed at increasing transparency and taking action on methane emissions from imported oil, gas and coal:

• Establishment of a public methane transparency database of emissions reported by importers and EU operators;
• Creation of country and company methane performance profiles for importer use;
• Implementation of a global methane emitters monitoring system and rapid alert mechanism for super-emitting events that contains data on magnitude, location and recurrence of such events around the world. The Commission has the right to request timely information on the actions taken by the countries concerned to address such events. 
• Requirement that new import contracts for oil, gas and coal mandate equivalent MRV requirements for exporters as those established for EU producers, beginning in January 2027. The Regulation establishes methodology for calculating the methane intensity of oil, gas and coal production, along with maximum values at the level of the producer and in consideration of various sources, processes and site conditions. 

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