Environmental Defense Fund Europe (EDFE)

Is the EU on the cusp of grabbing methane by the horns or will it let these emissions slip through the cracks?

As the world continues on its quest to ensure a low-carbon energy future while facing an uphill battle to curb its greenhouse gas (GHG) footprint, the European Union (EU) is preparing to cast its vote on the first methane emissions regulation, which could help lower methane, a potent greenhouse gas, in the oil and gas sector.

Environmental Defense Fund Europe (EDFE)

With the EU at crossroads, as it gets ready to vote on its first methane emissions regulations on Wednesday, 26 April 2023, the Environmental Defense Fund Europe (EDFE) – a non-governmental organisation looking for ways to clean the air, decarbonise shipping and reduce methane pollution – is calling on the world’s largest natural gas importer to back a strong position on its first regulation aimed at reducing methane emissions in the energy sector.

EDFE sees the current timing as critical due to high gas prices creating – what it deems to be – an incentive for the oil and gas industry to act and capture otherwise wasted methane, which is the main component of natural gas. The organisation believes that the failure to act risks seriously undermining the EU’s leadership role under the Global Methane Pledge and hindering progress towards meeting its climate goals and commitments. 

As a reminder, the EU and the U.S. launched the Global Methane Pledge at the COP26 UN Climate Conference. Currently, over 150 countries have signed on, committing to reduce their methane emissions by 30 per cent by 2030 compared to 2020 levels. 

Flavia Sollazzo, EDFE’s Senior Director, EU Energy Transition, remarked: “This is a pivotal moment for the EU’s climate legacy. Implementing a strong regulation promptly could bring a triple victory for the EU: slowing global warming, bolstering Europe’s gas supply during an energy crisis, and enabling economies to benefit from untapped gas revenues.

“Timing is now critical as current higher gas prices create a significant incentive for the oil and gas industry to act and capture the otherwise wasted methane – the main component of natural gas. As we transition towards renewable energy, we must ensure that current fossil fuel extraction is efficient and responsible, without the need for further extraction.” 

According to the Environmental Defense Fund Europe, the new regulation is “a unique opportunity” to contribute to global efforts to combat climate change and ease pressure on the EU’s energy supply. During the negotiation process, EDFE highlighted the need to implement robust measuring, reporting, and verification (MRV) rules, as well as a comprehensive framework for detecting and repairing leaks (LDAR), and strict regulations for limiting venting and flaring. 

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This was done as the adopted act needs to reflect best practices and provide a solid foundation for reducing energy methane emissions in the EU to have a chance of meeting the EU’s ambitious target of reducing greenhouse gas emissions to at least 55 per cent below 1990 levels by 2030. In addition, establishing strong domestic measures puts the EU in a stronger position with more effective tools to deal with imports. 

“Europe has the opportunity now to demonstrate climate leadership to the world and fulfil its commitments under the Global Methane Pledge. Reducing methane emissions can also contribute to a cleaner and healthier environment for EU citizens and communities worldwide. Every day lost in delays is another day the EU falls short of its responsibilities,” added Sollazzo.

Furthermore, EDFE outlines that cutting methane wasted by the oil and gas industry globally through leaks, venting, and flaring is “the quickest, cheapest, and most effective way to slow global warming.” By fully deploying existing solutions to cut methane emissions across key sectors, the organisation claims that 0.5 degrees Celsius in warming could be avoided by the end of the century.

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“There is no reason that operators cannot act right now to reduce methane emissions, and evidence from the International Energy Agency (IEA) strongly supports this. It estimates that worldwide, the oil and gas industry can achieve a 75 per cent methane emission reduction using technologies available today — two-thirds of it at no or low net cost. And, as little as three per cent of profits generated by fossil fuel industries could be utilised to effectively mitigate the majority of existing methane emissions,”  pointed out Sollazzo.

Methane menace and Europe’s climate agenda 

Methane, which is identified as the second-largest contributor to global warming, has a warming potential over 80 times greater than that of carbon dioxide during the first 20 years after it is released into the atmosphere. While the atmospheric concentration of methane is increasing faster now than at any time since the 1980s, methane emissions from human activity are responsible for at least 25 per cent of today’s warming.

In light of this, EDFE emphasises that the oil and gas sector stands out as a significant contributor, with methane emissions about 70 per cent higher than official data shows, which is expected to increase further. In the wake of the Ukraine crisis and a surge in energy prices, demand for natural gas in the EU fell in 2022 by 13 per cent, based on IEA’s data.

However, EDFE underscores that the EU still remains the world’s largest natural gas importer and plays a leading role in the climate crisis, as it imports 90 per cent of its natural gas from the planet’s biggest methane emitters and has a high methane footprint in producer countries, which is estimated to be between three and eight times the emissions from the domestic EU gas supply chain. 

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“The EU has set ambitious targets to reduce its greenhouse gas emissions and wants to be a global leader in the fight against climate change. MEP’s now have the solution at their fingertips to implement a strong regulation that effectively cuts EU methane emissions,” concluded Sollazzo.

Members of the ENVI and ITRE committees of the European Parliament will vote on their position on the Commission proposal. If adopted, the ENVI/ITRE report will then go to a vote at Plenary and form the basis for trilogue negotiations with the Council of the EU. If an agreement is reached, the regulation will be adopted and enforced on a specified date. 

EDFE underlines that using regulatory levers domestically will allow the EU to extend requirements to imports as the methane footprint outside its borders is three to eight times higher than that from domestic gas, particularly considering that Nigeria and nine other countries, including Algeria, account for 75 per cent of global gas flaring and 50 per cent of global oil production, based on World Band Global Gas Flaring Tracker Report 2022. The nine other countries encompass Russia, Iraq, Iran, the United States, Venezuela, Mexico, Libya, and China. 

An analysis by S&P Global, commissioned by the Environmental Defense Fund, estimates that cutting these preventable losses in six key export regions, could capture and profitably bring to market more than 80 billion cubic meters (bcm) of methane, which is almost 60 per cent of Europe’s pre-war annual imports from Russia.

Additionally, the analysis lays out specific steps that could bring 40 bcm of new supply to market in just two to three years, which is more than the total annual gas demand of France. This can be done using export capacity either in place or under construction while capturing this gas would avert 760 metric tonnes of CO2 equivalent, an amount roughly the size of Germany’s total annual emissions.  

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