EU Gas Crunch Forces Rethink of Methane Rules
The European Commission is considering postponing the import provisions of its methane regulation by one year as a persistent gas supply crunch tied to conflicts in Ukraine and the Middle East strains European markets. Energy Commissioner Fan Jorgensen said the delay would give market participants time to comply without jeopardizing supply or driving up prices, but critics including major LNG exporters have already pushed back against the measure.
Why It Matters
The timing of the methane rule affects access to liquefied natural gas from major suppliers such as the United States and Qatar during an already tight winter market; delaying enforcement could keep imports flowing but will not address high spot-market prices or low storage levels reported across the EU.
Key Facts
- Proposal: Commissioner Fan Jorgensen instructed services to explore postponing the import part of the methane regulation by one year.
- Main requirement: The regulation would require companies selling LNG to EU entities to report methane emissions from the well to the tanker.
- Opposition: The United States and Qatar have criticized the regulation; the U.S. sought an exemption until 2035.
- Previous delay: Earlier this year the regime was delayed with a no-penalty compliance year — a move protested by the two largest LNG suppliers to the EU.
- Supply developments: Qatar extended force majeure on Ras Laffan for another month; Russia will be banned from selling gas to the EU in any form from January.
The European Commission is weighing a one-year postponement of the import provisions in its methane regulation as the bloc confronts strained gas supplies and rising prices. Energy Commissioner Fan Jorgensen told Bloomberg she has asked Commission services to study the feasibility of delaying the rule to allow market participants time to adapt without undermining energy security or pushing prices higher. The methane regulation would compel firms exporting liquefied natural gas to EU buyers to disclose methane emissions across the supply chain, from production to tanker. The measure has drawn strong objections from key suppliers. Both the United States and Qatar have publicly criticized the rule; Washington described it as a non-tariff trade barrier and requested an exemption until 2035, and Qatar threatened to suspend exports to the EU if the Commission pressed ahead. Earlier this year the Commission introduced a phased approach — a first year with no penalties — to ease implementation, but that concession failed to placate the EU’s largest LNG providers. The current proposal to postpone the import element aims in part to secure continued flows of American LNG into the bloc during the winter months, when demand for heating typically rises. Officials and market participants warn that delaying the regulation would not resolve the EU’s affordability problem. Spot-market gas prices are running at levels seen in 2022–2023 while gas stocks remain below seasonal averages. Additional constraints include an extended force majeure at QatarEnergy’s Ras Laffan and a forthcoming ban on Russian gas sales to the EU from January, leaving the bloc heavily dependent on other suppliers such as Norway and the United States. Commissioner Jorgensen said the Commission is listening to member states and companies and is exploring measures to support the availability and affordability of transport fuels as well as methane. However, she provided no detailed mitigation measures; with winter approaching, market observers say higher demand and thin supply buffers could push prices further upward.
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Original source: OilPrice.com