(BRUSSELS – 24 Mar 2021) The Florence School of Regulation and Environmental Defense Fund Europe have published a new policy brief titled Designing an EU Methane Performance Standard for Natural Gas. In the report, FSR’s Andris Piebalgs and Maria Olczak together with EDF’s Kristina Mohlin describe policy pathways for a methane performance standard for natural gas to address upstream emissions for both imported and domestically produced gas.

Methane is the second largest contributor to climate change after carbon dioxide, and methane emissions from human activities drive at least 25% of the warming our planet is experiencing today. In its Methane Strategy released last October, the European Commission recognized the importance of tackling oil and gas methane emissions as the most cost-effective path to reduce methane, and a necessary step for the EU to achieve its 2030 climate targets and 2050 climate neutrality goal.

“Significantly reducing oil and gas methane emissions offers an immediate and cost-effective step toward achieving the goal of the Paris Agreement to limit global warming to well below 2 degrees Celsius,” said EDF senior economist Kristina Mohlin. “The EU has a huge opportunity to lead by example, using a combination of domestic regulation and market purchasing power to rapidly reduce methane emissions, along with efforts to reduce CO2 emissions economy wide.”

The EU is the world’s largest natural gas importer, with imports accounting for 85% of its consumption. Top suppliers include Russia, Norway and Algeria with an increasing role of LNG supplied from Qatar, Nigeria and the United States. The ‘methane footprint’ of oil and gas production in Europe’s supplier countries is estimated to be between three and eight times the emissions from the domestic EU gas supply chain.

Policy makers in Brussels are exploring a variety of legislative measures to reduce oil and gas methane pollution consistent with the objectives outlined in the EU Methane Strategy. This includes important safeguards for sustainable production and transport practices such as regular leak detection and repair at well sites and compressor stations, and restrictions on routine venting and flaring. A methane performance standard applying to all gas sold in the EU would complement these measures and ensure significant reductions in methane emissions.

“A methane performance standard could be introduced in the revised Gas Directive, Carbon Border Adjustment Mechanism or standalone methane legislation for the energy sector. This policy brief aims to provide practical guidance, whichever direction EU decision makers choose to embark on,” explained Andris Piebalgs, former Energy Commissioner and FSR part-time professor.

A methane performance standard would require EU gas buyers to cap emissions of their portfolio at the level of the standard, and to avoid penalties either reduce volumes of unabated gas they buy or switch to responsibly produced gas. The policy brief outlines metrics that could be used to measure the upstream methane emission intensity of natural gas and how market actors could be incentivized to conform with the standard.

The standard could build upon the OGMP 2.0 reporting framework spearheaded by the UN Environment Programme, European Commission, Climate & Clean Air Coalition and EDF. Launched at the end of last year, it creates a set of measures for participating companies to document and report their emissions performance to better inform customers and regulators.

The joint FSR-EDF brief aims to foster a broader discussion amongst EU stakeholders on effective ways of curbing methane emissions, inspire further analysis in this field, and support the growing number of international initiatives aimed at addressing this pressing climate issue.

Click here to read the full policy brief,  

Designing an EU Methane Performance Standard for Natural Gas.