Europe Warned of Energy Supply Disruptions Following Its Methane Regulations

Energy officials from four nations—the United States, Qatar, Nigeria, and Algeria—sent a letter to European Union leaders on Tuesday, warning that implementing the bloc’s methane regulations can disrupt regional oil and gas supplies.

In 2024, the EU Methane Regulation (EUMR) entered into force. It aims to cut down methane emissions, including from global supply chains. The measure requires the bloc’s energy importers to comply with various reporting and monitoring measures when importing energy from other nations, with these mandates coming into effect between 2025 and 2030.

In their June 23 letter, the four nations warned European leaders that the majority of exporters selling energy products to the European Union “cannot meet the EUMR methane emissions measuring, reporting, and verification (MRV) requirements on the prescribed timeline.”

EUMR was instituted to control the emissions of methane gas as part of the EU’s climate policies, according to the European Commission, which said methane was the “second greatest contributor to climate change.”

In their letter, the four nations said that “according to an independent, comprehensive industry analysis, nearly all of EU oil imports and a significant quantity of EU natural gas imports” will not be compliant with the EUMR starting in January 2027.

“Even with adaptive and flexible implementation, significant negative supply and price impacts are a certainty,” they said.

EU importers have already started the process of buying oil and gas that will be stored for delivery next year. However, as of now, there is “no viable path” to comply with EUMR regulations, according to the letter.

The four nations asked the EU to adopt a temporary delay in the implementation of EUMR for developing necessary compliance pathways that will “work for all.” All penalties for noncompliance during this temporary period must be removed, they said.

In addition, the countries called for grandfathering of new contracts signed during this period, which would allow contracts to remain legally valid even after the new rules come into effect.

“As your largest energy suppliers, we are committed to strengthening our economic and strategic partnerships and ensuring Europe’s energy security,” the letter said.

“We strongly encourage a pragmatic approach to clarifying essential missing elements of the EUMR and adopting necessary changes, to allow importers to continue sourcing oil and gas resources needed by the EU market.”

According to the European Commission, under the EUMR, importers are required to demonstrate that the coal, crude oil, or natural gas imported into the EU was produced in a jurisdiction that has “monitoring, reporting, and verification requirements equivalent to those applied domestically in the EU.” The requirement comes into effect on Jan. 1, 2027, and is applicable to all contracts signed or renewed after Aug. 4, 2024.

By Aug. 5, 2028, EU importers must report the methane intensity of imported coal, crude oil, or natural gas at production. And by Aug. 5, 2030, importers must show that these goods have a methane intensity below the threshold set by the European Commission.

U.S. Energy Secretary Chris Wright told the Reuters Global Energy Forum in New York on Wednesday that the EU’s “crazy” methane regulations will make it impossible to import LNG from the United States and the other countries that signed ​the letter. He warned that this would put EU countries at risk.

“You’re going to have meaningful risk of blackouts ​or heating struggles this coming winter. There’s just no reason for that,” he said.

Speaking to reporters before the letter was published, EU Energy ‌Commissioner ⁠Dan Jorgensen said he was open to discussions on easing implementation but would not dilute the policy’s ambition.

Methane and Energy Security

According to the European Commission, methane has a stronger ability to trap heat in the atmosphere than carbon dioxide (CO2). The “global warming potential” of methane is 29.88 times that of CO2 over a 100-year period and 82.5 times higher on a 20-year timescale, it said.

“Abating methane emissions is therefore necessary for achieving the 2050 climate objectives of the European Green Deal,” the European Commission said, adding that one-third of methane emissions from human activity comes from the energy sector.

In an April 13 letter addressed to EU energy ministers, the International Association of Oil and Gas Producers made an “urgent call” to make amendments to the EUMR. The association is composed of major global energy giants, including Chevron, ConocoPhillips, BP, and ExxonMobil.

The EUMR in its current form poses a risk to the EU’s energy security, the letter warned, highlighting that up to 43 percent of the bloc’s natural gas imports and roughly 90 percent of crude oil imports are unlikely to be compliant with regulations as of January 2027.

“Furthermore, the Regulation also puts significant strain on the EU’s domestic producers and infrastructure operators by mandating costly and non-proportional measures while yielding little benefit or potentially even a net GHG emissions increase,” the association said, referring to greenhouse gases (GHG).

“This could further accelerate the decline of Europe’s domestic production, weaken its strategic autonomy, and make the energy transition more costly.”

Reuters contributed to this report.