The United States has requested that the European Union (EU) exempt it from obligations to report methane emissions data under the EU Methane Regulation until October 2035. According to a document shared with EU governments and reported by Reuters, the U.S. claims that the existing regulations could jeopardize Europe’s energy supply and security.
The EU Methane Regulation, set to take effect on August 4, 2024, aims to significantly reduce methane emissions from the energy sector. A critical component of this regulation involves monitoring, reporting, and verification requirements for imported energy sources. Starting from January 2027, importers will be required to demonstrate compliance, proving that oil, natural gas, or coal imported into the EU is sourced from jurisdictions with comparable emission reporting standards to those mandated within the EU.
In its communication to EU governments, the U.S. has emphasized that if the legislation is not fully repealed, it should at least receive a delay in reporting requirements. The document states that the U.S. seeks an extension for emissions data reporting under the EU Methane Regulation until 2023. This request has emerged amid ongoing lobbying efforts by the U.S. and its gas industry to amend or repeal various EU climate laws perceived as detrimental to energy security.
Concerns from Major LNG Exporters
The request also aligns with broader efforts by the U.S. and Qatar, another significant LNG exporter, to challenge the proposed Corporate Sustainability Due Diligence Directive (CSDDD). This legislation could impose penalties on companies for non-compliance, prompting serious concerns from major industry players, including ExxonMobil. The directive has faced criticism for its potential to disrupt business operations within the EU.
ExxonMobil’s CEO, Darren Woods, has publicly condemned the directive, labeling it “the worst piece of legislation I’ve seen since I’ve been in this job.” He has indicated that failing to amend or repeal the CSDDD could force ExxonMobil to exit its operations in Europe entirely.
As the EU prepares to phase out Russian gas supplies, the implications of these regulatory changes are significant. According to gas producers and traders, non-compliance with the methane regulation could lead to LNG importers needing to divert cargoes away from the EU by 2027. This scenario would exacerbate supply challenges at a time when Europe is striving for energy independence.
Overall, the U.S. position reflects a strategic effort to safeguard its LNG exports while navigating the evolving landscape of European energy regulation. As discussions unfold, the interplay between U.S. lobbying efforts and EU regulatory frameworks will be pivotal in shaping future energy dynamics in the region.
