The European Union has decided to suspend a regulation requiring oil and gas suppliers to report emissions along their supply chains amid an energy crunch that has sent oil and gas prices higher and prompted a rush to secure scarce supply.
Citing a draft document from the European Commission to national governments, Reuters reported that EU capitals were informed they could remove planned penalties for non-compliance with the methane rules.
“Sanctioning should be delayed until the situation is stable and resumed if the infringement persists and the risk to the security of supply is no longer present,” the document said, according to Reuters.
The European Union adopted the methane regulation two years ago, aiming to reduce not only the EU’s own emissions of the greenhouse gas but also forcing countries outside the EU that do business with the bloc to cut their emissions as well. The regulation, which came into effect this year, extends to all energy suppliers to the EU, and these suppliers are not happy about it.
The United States, which emerged as the biggest supplier of liquefied gas to the EU after 2022, was vocally unhappy about the regulation. Last year, to secure the energy dominance from his agenda, President Trump negotiated a trade deal with the EU’s Ursula von der Leyen that involved a commitment to buy $750 billion worth of U.S. energy commodities over three years. But that cannot happen with the methane directive, which imposes expensive methane emission tracking, monitoring, verifying, and reporting obligations on energy exporters to the EU.
U.S. energy exporters and Energy Secretary Chris Wright have repeatedly called for a reconsideration of the methane rules if the EU wants a secure supply of liquefied gas. QatarEnergy has stated plainly it will not sell LNG to the EU if the directive remains.
By Irina Slav for Oilprice.com
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