EU reaches breakthrough political deal on methane emissions [Gas in Transition]

The EU Council and Parliament struck a political agreement on November 15 on the introduction of rules to track and cut methane emissions from the energy sector. The bloc’s first-ever law to address methane emissions is aimed at tackling those emissions both in Europe and those associated with its imports – therefore driving reductions globally. It now has to be endorsed and formally adopted by both the Council and Parliament, and the legislation will then be published in the EU Official Journal and enter into force.

The agreement is years in the making, coming after the European Commission (EC) set out its EU methane strategy in 2020 and then presented a proposal for regulation of energy-sector emissions the following year. And its announcement was timely, occurring just weeks before the COP28 starts on November 30 in Dubai.

Methane profiles

The regulation sets out new rules for operators in the oil, gas and coal sectors to measure, report and verify methane emissions, as well as implement mitigation measures to avoid those emissions. Those requirements cover the detecting and repairing of methane leaks, as well as limits to venting and  flaring.

In addition, the agreement calls for global monitoring tools to be used to ensure transparency about methane emissions associated with imports.

The EU will also have to create methane performance profiles for countries and companies, so that importers can make informed choices on their imports.

“The EC will also 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,” the agreement text read.

That will mean giving the EC the right to ask for prompt information on what is being done by other countries to address leaks.

From January 2027, the regulation also states that new contracts for oil, gas and coal imports can only be finalised if exporters adhere to the same obligations on monitoring, reporting and verification as producers in the EU.

“These new transparency obligations on international partners will inform the EU’s bilateral and multilateral dialogues with global energy partners,” the text read.

Monitoring, reporting and inspection

The regulation sets out when operators have to submit reports to authorities quantifying source-level methane emissions at various timeframes. Reports should be submitted on:

• Quantification of source-level methane emissions within 18 months.
• Direct quantification of source-level emissions for operated assets within 24 months.
• Direct quantification of source-level emissions, aided by site-level measurements, within 36 months and by May 31 every following year.
• Direct quantification of source-level emissions for non-operated assets within 48 months, and by May 31 every following year.

Authorities would then have to undertake periodic checks for compliance, with the first to be completed no  later than 21 months after the regulation comes into force.

How often the inspections take place will depend on an assessment of environmental, human safety and public health risks, and not more than three years apart. If there is a serious breach of the requirements, the next inspection must happen within one year.

LDAR

The regulation sets out a risk-based approach for leak detection and repair (LDAR), differentiating between  Type 1 surveys with less accuracy to find big leaks and Type 2 surveys with higher accuracy to find small leaks. It sets minimum detection limits and minimum leak thresholds, distinguishing between above-ground and underground components and those below sea level and under the seabed. Advanced technology systems can be used under specific conditions. The European Commission is required to specific minimum detection limits at standard temperature and pressure within a year by means of an implementing act.

"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," it said.

Imports

Regarding imports, the Council and Parliament have agreed on three implementation phases.

The first phase will involve data collection and the establishing of a methane emitters global monitoring tool and a super emitter rapid reaction mechanism. During the second and third phases, exporters to the EU will have to apply equivalent monitoring, reporting and verification measures by the start of 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 text stated.

Industry view

The International Association of Oil & Gas Producers (IOGP) Europe described the regulation as “a mixed bag.” Though stressing its support for regulation of methane emissions, it stated that there “are a lot of unknowns left to clarify.”

While some details will be finalised in secondary legislation “for good reason,” it said that “others which would have deserved more reflection seem to have made it through the agreement despite being unrealistic.” This could lead to shutdowns and forced exposure to penalties “due to the impossibility to comply,” it said.

Noting the positives, IOGP Europe said that the phased approach to imports and the 2030 deadline for setting a methane intensity performance standard was “reasonable.” The unknown is whether existing supply contracts will be subject to binding obligations, and if those obligations will apply to new contracts

Differentiating between inactive, temporarily plugged, permanently plugged and abandoned wells was a positive, it said. It also welcomed the decision that the EC should determine minimum LDAR detection threshold through secondary legislation, but said that “it seems that these will have to be consistent with the leak repair thresholds, which are well below what we called for but better than the 0.15g/h (aka 1/100th of a dairy cow’s CH4 footprint).”

On the negative side, IOGP Europe said the requirements for subsea quantification were not technologically feasible currently. It also called for the use of pressure monitoring for inactive wells and temporarily plugged wells, describing this as industry best practice.

The efficiency rate for gas flare stacks of 99%, previously 98%, will mean companies having to carry out significant operations at all existing stacks within 18 months, meaning extra cost and potential negative impact to the environment.

It added that the use of advanced technologies such as drones and continuous monitoring was still impossible under the current criteria. These technologies are not designed for the point source level of individual components, or to comply with the minimum detection limits.

“Rewarding good performance seems to be made useless by the criteria,” it concluded. “The threshold for relaxed frequencies for LDAR are kept where less than 1% of the components are leaking, however the threshold for aggregated leaks, which effectively allows for such flexibility, has been lowered to an unrealistic level of <0,08% of total mass gas or 0,015% of the total mass oil. Therefore this flexibility may be on paper only, and we really question the basis for such figures.”