Commissioner Proposes One-Year Delay for Import Rules
The European Union is evaluating a one-year postponement of the import-related provisions of its methane regulation, a move aimed at preventing energy supply shortages and price increases. EU Energy Commissioner Dan Jorgensen told Bloomberg that he has instructed his services to examine the delay to ensure sufficient fuel supplies reach the bloc.
The regulation is scheduled to enter into effect in January. Under the current proposal, Brussels has suggested delaying penalties for violations, but the core requirement for exporters to report emissions remains a point of contention with major trading partners.
Exporters Cite Technical Impossibility and Trade Risks
Major energy exporters, including the United States and Qatar, have argued that the rule’s demand for producers to track and report methane emissions for every hydrocarbon molecule sold to the EU is technically impossible. The regulation requires energy exporters to track, measure, report, and verify methane emissions.
Qatar has stated it would stop selling liquefied natural gas (LNG) to the EU if the rule proceeds as written. U.S. Energy Secretary Chris Wright suggested the regulation would hurt bilateral trade between the two nations.
While Qatar has stopped selling liquefied gas to the EU for reasons unrelated to the methane rule, and the U.S. is currently selling more LNG to Europe than ever before, the regulation could change this dynamic in winter as producers face compliance deadlines.
Verification Gaps and Market Volatility
Wood Mackenzie carbon expert Valentina Kretzschmar stated that most oil and gas exporting countries outside Europe are not ready to meet EU equivalence due to a lack of details on verification. She noted that no agency is yet accredited to verify methane measurement and reporting of production outside the EU.
Importers have stated they are unwilling to accept non-compliance due to potential legal, commercial, and reputational risks. Although EU energy companies have been subject to similar rules since 2024, the EU lacks an effective mechanism to enforce this on foreign suppliers.
With fuel prices at record highs and gas prices above 70 euro per MWh, Brussels has proposed delaying penalties for violations, but energy exporters oppose even the requirement to report emissions. In a worst-case scenario, European energy buyers could face a shortfall as crude and LNG cargoes from the United States divert to Asia in January due to the producers' inability to comply with the new rules.