The European Commission is moving forward with its legislative agenda to reduce methane emissions in the energy industry, specifically the oil, gas and coal sectors. Following the Commission’s October 2020 Communication (COM 2020/663 final) on an EU strategy to reduce methane emissions as part of the EU Green Deal programme, the Commission has set out the policy options under consideration as part of a public consultation. The consultation should be followed later in 2021 by a legislative proposal, which is scheduled for publication during the fourth quarter of 2021.
Methane emissions are considered to be the second largest contributor to climate change, after carbon dioxide. Reducing methane emissions is therefore a key part of the EU’s strategy to meet its goal of being climate neutral by 2050. The impact assessment of the 2030 climate target plan (SWD(2020) 176 final) states that methane will continue to be the EU’s dominant non-carbon greenhouse gas and so – to achieve the more ambitious target of reducing emissions by 55% by 2030 as compared to 1990 levels – a stronger effort to reduce methane emissions is required.
The main areas where methane emissions are detected are (a) methane leakages from fossil fuel production sites, (b) transmission systems, (c) transportation (ships) and (d) the distribution sector. Methane is also commonly released through incomplete combustion from flaring.
EU legislative measures on methane under consultation
The Commission’s consultation discusses and seeks views on the following legislative measures:
Binding rules on monitoring, reporting, verification (‘MRV’)
As outlined in the Commission’s methane communication, it is considering the possibility of adopting compulsory MRV rules for all energy-related emissions at a company level, whilst seeking to improve information gathering, particularly as to its availability and accuracy, in relation to emissions of methane within the EU.
The Commission is proposing to do this by building on and extending the Oil and Gas Methane Partnership (‘OGMP’) framework, a global voluntary initiative currently covering the upstream oil and gas sector. The framework would be expanded to companies in upstream, midstream and downstream gas (via OGMP 2.0), as well as to the coal sector and closed or abandoned sites. The Commission’s options as outlined in the consultation’s Inception Impact Assessment vary from a ‘no policy change’ scenario, where OGMP would continue operating as a voluntary scheme, up to transforming the OGMP framework into EU legislation applicable to the full supply chain of the energy sector.
Rules on improving leak detection and repair
The Commission’s methane communication discussed the need to improve leak detection and repair on all fossil gas infrastructures, as well as any other production, transport or use of fossil gas. It also talked about actions that could be taken to eliminate routine venting and flaring in the energy sector, covering the full supply chain up to the point of production. The Commission is therefore proposing to impose legal obligations on companies to mitigate methane emissions across different segments of the energy supply chain.
Further EU measures to address methane
Beyond what is addressed in the current consultation, the Commission is also advocating the establishment of an international methane emissions observatory, which will be responsible for the collection and verification of data on emissions of methane. The observatory would, in the first place, cover methane emissions from oil and fossil fuel sectors, and its scope would be gradually extended to cover coal, waste and the agriculture sectors, once comparable monitoring and reporting obligations similar to the OGMP 2.0 are established for these sectors.
The Commission is also considering strengthening satellite-based detection and monitoring of methane emissions through the EU’s Copernicus programme, aimed at monitoring and detecting methane-heavy emitters.
Besides energy, the Commission’s strategy discusses measures in agriculture and waste and water management that are scheduled to be further addressed in the coming years.
In agriculture, the Commission will:
- seek to develop an inventory of best practices and available technologies to promote mitigating actions for methane emissions in the agriculture sector, during 2021;
- provide a digital carbon navigator template and guidelines on common pathways for the quantitative calculation of GHG so as to promote carbon-balance calculations at farm level, by 2022;
- promote opportunities to reduce emissions with support from the Common Agricultural Policy (‘CAP’) as well as incentivise the collection of non-recyclable organic human and agricultural waste.
Concerning waste and water management, the Commission plans:
- to review the Landfill Directive (1999/31/EC) within 2024, in order to consider further actions for improvement in the managing of landfill gas;
- to reduce GHG emissions from sewage sludge as part of the evaluation of the Sewage Sludge Directive (86/278/EEC) and review of the Urban Waste Water Treatment Directive (91/271/EEC).
Review of existing EU legislation on methane emissions
A number of existing EU laws contribute to providing information on methane emissions. The Commission is also planning to review relevant climate change legislation as part of the EU Green Deal, which address methane emissions. These include:
- a review of the Effort Sharing Regulation ((EU) 2018/842) which covers methane emissions in the EU next to all other greenhouse gases not covered by the EU ETS. A public consultation is currently open until 5 February 2021. The Commission’s adoption is planned for the second quarter of 2021;
- a potential expansion in scope of the Industrial Emissions Directive (2010/75/EU) in order to enhance its role in controlling and preventing methane emissions and cover methane-emitting sectors, which are not currently accounted for. A public consultation is open until 23 March 2021. The Commission’s adoption is planned for the fourth quarter of 2021; and
- a review of the European parliament’s Release and Transfer Register (under Regulation 2006/166) in order to expand its sectoral scope for reporting on emissions of methane.