EU Considers Delaying Methane Rule Amid Energy Supply Concerns
Notably, the regulation mirrors existing requirements for EU energy companies, which have been subject to similar rules since 2024, as highlighted by Wood Mackenzie.
Suppliers Conditionally Threaten to Cut Ties Over Methane Rule
The rule demands that energy exporters to the EU track, measure, and report methane emissions along the supply chain. Qatar has stated it would stop selling liquefied natural gas (LNG) to the EU if the rule is enforced, though it has already ceased LNG sales to the EU for unrelated reasons. This has led the United States to increase its LNG exports to Europe. U.S. Energy Secretary Chris Wright warned the regulation could harm bilateral trade, emphasizing the strain on energy partnerships.
The EU’s Energy Commissioner Dan Jorgensen acknowledged these concerns, stating, “I have instructed my services to look into the possibilities of postponing the import part of the legislation with one year.” This delay, he said, would allow market actors to implement the rules without compromising energy security and prices. Jorgensen’s comments reflect the EU’s awareness of its limited options compared to producers’ market flexibility.
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Verification Challenges and Market Realities
A key issue is the lack of a clear verification process for methane emissions data. Valentina Kretzschmar, a carbon expert at Wood Mackenzie, noted that “most oil and gas exporting countries outside Europe are simply not ready to meet the EU equivalence within the timeframe.” No agency is currently accredited to verify methane measurement and reporting outside the EU, leaving importers exposed to legal, commercial, and reputational risks. This gap highlights the impracticality of enforcing the rule without causing disruptions.
The current energy market forces further complicate matters. With fuel prices at record highs, any additional pressure on supply could worsen the situation. The EU’s ability to enforce the methane rule without disruptions is questionable, especially given the global competition for energy resources.
Potential Consequences and Scenarios
If the rule goes into effect as planned, European energy buyers could face a shortfall as suppliers divert cargoes to other markets, particularly Asia. This scenario could occur during winter, when energy demand is high. The timing could exacerbate challenges in the already strained energy sector.
