EU climate rules risk energy security, warn gas suppliers

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Cargoes of gas could be diverted from Europe unless Brussels makes major changes to its methane emissions rules, risking a shortage just as the bloc introduces a ban on Russian fuel, the energy industry has threatened.

The methane law forces all fuel importers to account for leaks in their supply chains. Methane, the main component of gas, has 80 times more global warming potential than carbon dioxide over 20 year period, making its reduction a critical part of the fight against climate change.

The EU crackdown is seen by environmental groups as groundbreaking in the effort to keep methane emissions in check.

But the oil and gas industry argues it will impossible to comply with the law because it requires companies to trace where each molecule in a shipment has come from — a significant challenge in countries such as the US, which has thousands of small gasfields combining their output in large pipelines.

It was also unclear how the EU plans to verify the methane emissions data provided and what fines will be imposed on importers that contravene the rules. The law says companies could face penalties of up to 20 per cent of their global turnover.

“We have been complaining about many of these things basically since day one,” said Andreas Guth, secretary-general of Eurogas, which includes BP, Shell and TotalEnergies among its members. Importers “may decide to divert those cargoes to other markets outside of the EU” if changes are not made “immediately”, he said.

Europe would not be able to benefit from lower prices from a predicted glut of liquefied natural gas if cargoes are not compliant, Guth added.

The comments add to a growing chorus of complaints to Brussels from fossil fuel producers which argue the EU’s green agenda is putting the bloc’s energy security at risk.

The US and Qatar last month sent a joint letter to EU leaders warning they would also withhold shipments of gas from the bloc if it did not make significant changes to its landmark due diligence rules, which require companies to root out environmental and social abuses in their supply chains.

US officials have said Donald Trump’s administration would like to see the directive repealed and warned that unless it is changed, the EU could face retaliatory tariffs.

EU lawmakers are due to vote on changes to the due diligence rules next week but US officials say Brussels’ efforts to simplify the directive have not gone far enough.

The supply chain law and methane emissions rules both come into full force in 2027, the same year that the EU will introduce a complete ban on Russian gas.

The regulation will apply to all shipments coming into the bloc that were contracted after August 4 2024. Many companies say they will be left in limbo not knowing whether shipments they have already contracted are compliant.

Guth said this could put the bloc’s energy security at risk by alienating alternative suppliers at a time when the EU will need to replace about 50bn cubic metres of remaining Russian imports.

Europe imported roughly 273bn cubic metres of gas in 2024, according to European Commission figures.

A group of nations gathering at the UN climate summit in Brazil the next fortnight have signalled a fresh push to address methane emissions arising from flaring and leaks during the production and distribution of gas.

The Clean Air Task Force, a non-governmental organisation, said the industry’s issues with the EU’s methane law were not insurmountable. Molecules could be traced, for example, using a “digital certificate . . . tied to fuels when they’re sold”, it said.

The gas industry has proposed an alternative way of tracing the molecules, but Guth said that ideally current contracts would be exempted from the rules.

Dan Jørgensen, the EU’s energy commissioner, last month said the regulation “stands as it is”, but he added, “we are always very willing to look at how to make it easier to implement”.