EU Targets Upstream Methane Emissions from Imports
The European Council and Parliament have reached a provisional political agreement on a regulation for tracking and reducing methane emissions in the energy sector.
The regulation introduces new requirements for the oil, gas and coal sectors to measure, report and verify methane emissions, as well as put in place mitigation measures to avoid such emissions, including detecting and repairing methane leaks and limiting venting and flaring. It also puts forward global monitoring tools to ensure transparency on methane emissions from imports of oil, gas and coal into the EU.
The regulation agreed aims to stop the avoidable release of methane into the atmosphere and to minimise leaks of methane by fossil energy companies operating in the EU. It requires operators to report regularly to the competent authorities about quantification and measurements of methane emissions at source level, including for non-operated assets. It obliges oil and gas companies to carry out regular surveys of their equipment to detect and repair methane leaks on the EU territory within specific deadlines.
It also bans routine venting and flaring by the oil and gas sectors and restricts non-routine venting and flaring to unavoidable circumstances, for example for safety reasons or in case of equipment malfunction.
It requires companies in the oil, gas and coal sectors to carry out an inventory of closed, inactive, plugged and abandoned assets, such as wells and mines, to monitor their emissions and to adopt a plan to mitigate these emissions as soon as possible.
The EU imports a large share of the oil, gas and coal it consumes, and the regulation will also tackle the methane emissions related to these imports. It establishes a methane transparency database where data on methane emissions reported by importers and EU operators will be made available to the public. It also requires the Commission to establish methane performance profiles of countries and companies to allow importers to make informed choices on their energy imports.
The Commission will put in place a global methane emitters monitoring tool and a rapid alert mechanism for super-emitting events, with information on the magnitude, recurrence and location of high methane-emitting sources both within and outside the EU. As part of this tool, the Commission will be able to request prompt information on action to address these leaks by the countries concerned.
As of January 2027, the regulation requires that new import contracts for oil, gas and coal can be only concluded if the same monitoring, reporting and verification obligations are applied by exporters as for EU producers. The regulation will set out a methane intensity methodology and maximum levels to be met for new contracts for oil, gas and coal.
As part of the agreement, the Council and the Parliament have agreed on specific deadlines and frequencies for monitoring, reporting and inspections of potential sources of methane emissions.
The provisional agreement now needs to be endorsed and formally adopted by both institutions.
Detailed requirements
Within specific time periods from the entry into force of the regulation, operators must submit reports to the competent authorities containing the quantification of source-level methane emissions (within 18 months), direct measurements quantification of source-level methane emissions for operated assets (within 24 months), direct-measurements quantification of source-level methane emissions complemented by site-level measurements (within 36 months and by 31 May every following year) and direct measurements quantification of source-level methane emissions for non-operated assets (within 48 months, and by 31 May every following year).
The competent authorities must carry out periodic inspections to check operators' compliance with the requirements set out in the regulation.
The first inspection must be completed no later than 21 months after the date of entry into force of the regulation. The period between inspections is to be based on an appraisal of the environmental, human safety and public health risks and must not exceed three years. If a serious breach of the requirements of the regulation is detected, the subsequent inspection must take place within one year.
The aim of leak detection and repair surveys is to identify sources of methane leaks, including other unintentional methane emissions, and to repair or replace the relevant components.
The provisional agreement provides for the adoption of a risk-based approach, drawing a distinction between type 1 leak detection and repair surveys (lower accuracy to find big leaks) and type 2 surveys (higher accuracy to find small leaks) based on minimum detection limits and minimum leak thresholds, and differentiating between aboveground components, underground components, and components below sea level and below the seabed.
By 12 months, the Commission must, by means of an implementing act, specify minimum detection limits at standard temperature and pressure.
As far as possible, repair or replacement of components is to take place immediately after detection of a leak, or as soon as possible for a first attempt but no later than five days and 30 days for a complete repair. Leaks under a given threshold will be closely monitored.
The Council and the Parliament agreed on three implementation phases. 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. In the second and third phases, equivalent monitoring, reporting and verification measures should be applied by exporters to the EU by January 1, 2027, and maximum methane intensity values by 2030. The competent authorities of each member state will have the power to impose administrative penalties if these provisions are not respected.
The provisional agreement provides that member states should maintain and regularly update an inventory of all wells. Proof of no methane emissions should be produced for wells permanently plugged and abandoned less than 30 years ago and, where available, for other wells.
Mitigation plans to remediate, reclaim and permanently plug inactive wells must be maintained and regularly updated.
Teresa Ribera Rodríguez, acting Spanish third vice-president of the government and minister for the ecological transition and the demographic challenge, says: “This agreement is a great achievement in the framework of the ´Fit for 55´ package. The text represents a crucial contribution to climate action as methane is a powerful greenhouse gas, second only to carbon dioxide in its overall contribution to climate change and responsible for a third of current climate warming. Reducing methane emissions will help us to achieve EU´s climate goals.”