Navigating the New EU Methane Regulation: Key Provisions, Monitoring and Compliance
by Peter Wieland, GIZ/EUKI
As a key element of the European Union’s climate strategy, the EU Methane Regulation (EMR) represents a critical tool in reducing greenhouse gas emissions, targeting methane as the second-largest contributor to global warming with a focus on the energy sector. Adopted in alignment with the EU’s climate neutrality goals for 2050, the EMR aims to stop the avoidable release of methane into the atmosphere, both in the EU and in its global supply chains, and to minimise leaks of methane by fossil fuel companies operating in the EU. This report describes the main results of a web seminar organised by the EUKI Academy in November.
On 19 November, 2024, the EUKI Academy hosted a web seminar in cooperation with 2Celsius and its international partners, based on their EUKI project Integrated Approach to Methane Emissions Abatement. The seminar covered key contents of the EMR, how companies and governments can ensure compliance, and the role of satellite monitoring in data transparency. Valuable insights on the impacts of the regulation on EU importers, non-EU exporters and oil, gas and coal producers in the EU were provided. The seminar was compiled by inputs from the following speakers:
- Mihai Stoica – Director, 2Celsius
- Raul Cazan – President, 2Celsius
- Elisabeth Lemaître – Research Analyst, Global Methane Research and Analytics, EDF Europe
- Brandon Locke – Europe Policy Manager, Methane Pollution Prevention, CATF
- Dr. Sabina Assan – Coal Mine Methane Analyst, Ember
EU context and the key provisions of the EMR
The EMR was implemented in a context of several pre-existing initiatives aiming at the reduction of methane emissions. As one of the key components of the European Green Deal, the EU published the EU Methane Strategy in 2020, setting Europe’s ambition and laying groundwork in the reduction of methane emissions in the energy, agriculture and waste sectors, which account for almost all human-related methane emissions. Further efforts on methane emission reduction were implemented by both industry and civil society, such as the Methane Guiding Principles Initiative, which offers training and policy advocacy for oil and gas companies, or the OGMP 2.0, a standardized framework for measuring and reporting methane emissions.
On an intercontinental level, the Global Methane Pledge, a joint EU-US initiative launched during COP26, was signed by over 150 countries and has the goal of a 30% reduction in methane emissions until 2030 compared to 2020. However, the absence of major emitters such as Russia, India and Australia limit the pledge’s effect. Methane policies have proven to be effective in several other (sub)-national contexts such as the United States, where methane is included in the cap and trade-systems of several states. In Norway, methane emissions are addressed by the inclusion in the CO2-tax or by issuing a limited amount of methane emission permits at the facility level.
Outside of Monitoring, Reporting and Verification (MRV) standards for operators in Europe, the EMR sets several rules for EU imports. First, data collection requirements on origin and emissions from fossil fuel imports. Second, the adoption of EU-equivalent monitoring, reporting and verification (MRV) standards by all importers of fossil fuels by 2027. Finally, the regulation contains the implementation of a methane intensity performance standard which requires all fossil fuel imports to be under a certain methane intensity threshold by 2030. These components are underpinned by a variety of measures, such as mandatory leak detection and repair as well as the restrictions on venting und flaring.
Data transparency and the role of satellites in the implementation process of the EMR
Until today, methane emission inventories are based on outdated generic emission factors. This leads to inaccurate estimates, high uncertainties regarding the actual emissions and therefore to inefficient policies. Methane emissions are dependent on numerous factors such as geography, fuel type, operator, and they are measured at different scales, possibly leading to an underestimation of inventories. Therefore, multiscale measurement and collaboration between ground-level and satellite data are crucial. While numerous satellites with different mapping scales are already in use, two prominent examples were presented in the seminar. MethaneSAT is able to cover more than 80% of all global oil and gas production areas using targets of 200×200 km2. Tanager-1 on the other hand is used to detect high emitting single sources and allows for quick dispatch actions. However, lower emission amounts remain undetected by the satellite, thus lacking completeness.
In the context of the EMR, using a combination of these satellites for methane emission detection offers a promising way to check if operators are meeting MRV requirements and for operators themselves to involve satellites in the Leak Detection and Repair Programmes. Satellites can deliver more accurate emission inventories and improve emission verification. Super-emitters can be detected earlier and more reliably, which enables more effective rapid response mechanisms. Programmes like IMEO’s Methane Alert and Response System already work with operators to flag super-emitting events. In general, emissions monitoring that provides data on issues such as seasonal fluctuations facilitates improved policy efficiency based on empirical data. Accurate emission data is crucial for performance-based instruments, such as the EMR methane intensity standard, which are otherwise considered inefficient.
EU oil and gas: Current trends and import rules
Most EU methane emissions along the supply chain of fossil fuel products occur outside of EU borders. Most EU oil and gas supplier countries have a methane intensity far over a desirable 0.2% equivalent threshold. Norway is the only supplier below the threshold in both oil and gas production. Therefore, the EMR mainly aims at reducing methane emissions in non-EU countries.
The above mentioned import regulations of the EMR have large impacts but also offer opportunities for fossil fuel producers, exporters, and EU importers. Increased transparency offers opportunities for global standardization in methane monitoring. Additionally, accurate data facilitates communication among stakeholders along the supply chain, fosters credible targets, as well as the commercialisation of environmental attributes.
The EMR’s main objective is to create a level playing field for exporters to the EU. This should incentivize partner countries to implement MRV frameworks because exporters in countries which demonstrate regulatory equivalence avoid direct compliance with EU MRV rules. The implementation of a methane intensity performance standard at a 0.2% equivalent level is expected to result in low costs for exporters with high emission reduction since marginal abatement costs for methane emissions are rather low.
The impact of coal mine methane emissions (CMM) and the potential for abatement
While oil and gas production are the most prominent methane emitters, coal mining is responsible for the highest amount of methane emissions in the EU energy production sector. However, it is still often overlooked in the public debate, even though it increases the already high impact of coal as a greenhouse. Luckily, emission occurrence during coal extraction or from abandoned coal mines is easily detectable and technology for emission abatement has already been established in the 1980s. Germany showcases best-practice examples by utilizing methane emissions from abandoned coal mines for heating and power. From 2000 to 2016, 100 MT CO2eq were avoided while also providing heat for over 60.000 households. In other countries, however, coal mine emissions are heavily underutilized, such as in Romania with only 0.2%.
In general, the EMR shows fairly low ambition on coal mine emissions. It mainly focuses on active and closed underground mines but excludes coking coal plants. Future challenges include overcoming inadequate verification of emissions, implementing efficient penalty schemes and utilizing pre-existing technologies to reduce CMM.
The EMR in action – how effective implementation would look like in Romania
The implementation of the EMR comes with several challenges for EU member states, such as Romania. There, well over 40.000 abandoned wells and closed and abandoned coal mines are responsible for a significant amount of methane emissions. The EMR requires member states to establish competent authorities for the regulation’s enforcement, reporting and monitoring. The country’s ministries must create inventories for inactive and abandoned wells and mines while also creating methane mitigation plans and actions and by assigning responsibilities to competent authorities to implement penalties and ensure compliance. For implementation, trainings on measurement technologies, data interpretation, and enforcement skills are crucial. To accelerate such processes and reduce costs, the use of EU funding could serve as excellent opportunities for progress.
In conclusion, the EMR offers a critical step towards achieving the EU climate goals. Collaborations between governments, civil society and fossil fuel industry stakeholders, combined with the use of effective detection technology, are urgently needed to achieve an effective and timely reduction in methane emissions.
Find the recording of the web seminar here.