EU’s first-ever methane clampdown regulation becoming law of the land

Given the pressing concerns over climate change, the European Union (EU) has set standards in place to curb its methane footprint from the energy sector, with the historic EU-wide legislation to slash methane emissions in Europe and its supply chains entering into the Official Journal of the European Union.

After the EU’s methane regulation for the energy sector was proposed in December 2021 as part of the proposals to deliver the European Green Deal, the EU Parliament adopted a position on a new law to reduce methane emissions from the energy sector, enabling the representatives from the European Parliament, the Council of the EU, and the European Commission to meet and hammer out a compromise agreement on the European Commission’s proposed regulation.

The new law, seen as the first piece of EU legislation aimed at curbing methane emissions, which covers direct methane emissions from oil, gas, coal, and biomethane once injected into the gas network, was previously anticipated to enter into force in early 2024. While the EU’s first-ever regulation targeting methane emissions has officially become law, the bloc’s 27 member states are expected to begin its implementation in 2025.

The methane regulation, known as EU 2024/1787, is designed to crack down on methane emissions from energy imports, as it aims to curtail these emissions within and far beyond the EU’s borders by setting strict new curbs on emissions from fossil fuel operations across the member states and applying tough standards to many oil, coal and natural gas exporters that supply to the EU.

However, the Environmental Defense Fund Europe (EDFE) – a non-governmental organization (NGO) looking for ways to clean the air, decarbonize shipping, and reduce methane pollution – points out that the regulation’s success relies heavily on “rigorous and swift” implementation by member states.

Flavia Sollazzo, Senior Director of EU Energy Transition at EDF Europe, highlighted: “The EU’s adoption of the Methane Emissions Regulation is significant progress towards slowing down climate change. It’s an ambitious and ground-breaking regulation that sets comprehensive standards that address methane emissions across the energy supply chain.

“As a cornerstone of the EU Green Deal, it reaffirms the EU’s commitment to combating climate change. Importantly, it signals the end of the EU outsourcing its pollution beyond its borders. By addressing emissions along its supply chain, the EU is taking responsibility for its large external methane footprint as part of its decarbonisation pathway.”

Furthermore, EDFE emphasizes the need for EU member states to appoint national authorities six months after the regulation enters into force to oversee its compliance by its oil, gas, and coal operators, as well as importers and independent verifiers. In addition, the European Commission is expected to present secondary legislation on the methodology EU importers will follow when reporting methane emission intensities.

Helen Spence-Jackson, Executive Director at EDF Europe, underlined: “With advanced monitoring, measuring, and tracking technologies like MethaneSAT now available, policymakers, industry and the public have powerful tools at their disposal. This radical level of transparency eliminates excuses and demands immediate action.

“The key to success now is proper implementation, which requires collaborative efforts across sectors. Working together, we can build a comprehensive understanding of emissions and develop effective solutions that benefit everyone. This regulation is a framework for constructive collaboration, paving the way for making real progress in the fight against climate change.” 

Moreover, EDFE underscores that the same monitoring, reporting, and verification obligations will be applied to EU importers from January 2027 after tackling domestic emissions, thus, importers will have to demonstrate that producers are measuring, monitoring, reporting, and verifying methane emissions in line with the requirements of the regulation for all contracts concluded with exporters.

Sollazzo concluded: “The real work starts now: Holding the industry accountable is crucial, and we expect member states to act swiftly. Immediate steps include implementing national methane emissions reporting requirements by next year, finalising import standards, and developing comprehensive monitoring, reporting, and verification (MRV) systems that extend beyond national boundaries.

“Additionally, transforming this regulation from policy into global climate action will require building strong international alliances to extend its impact. This isn’t just about EU leadership—it’s about driving a global shift in methane action and in slowing the pace of global warming.”

In a bid to ramp up its climate action, the EU sought a coordinated withdrawal from the Energy Charter Treaty (ECT) to counteract and neutralize the operation of the ECT’s sunset clause, as such a clause would extend the protection of existing energy investments for another 20 years after the withdrawal became effective.

In June 2024, the final and formal step came to end the participation in the Energy Charter Treaty, which enshrines protections for energy investors, primarily fossil fuel ones, that make use of its investor-state dispute settlement (ISDS) mechanism to sue governments for billions over climate policies hampering coal, oil, and gas projects. 

As a result, the withdrawal will take effect in a year but the door has been left wide open for the remaining member states to spruce the treaty up and make room for energy transition goals and net zero aspirations.