Ahead of COP28, the EU could dramatically cut global methane pollution with just one law [Promoted content]

Next week legislators of the European Union will make one of the biggest climate decisions of the decade. The Commission, Parliament, and Member States will meet to try to finalise Europe’s first-ever rules to reduce methane pollution from the energy industry. Negotiators are faced with a critical question: if the EU imports over 90% of its oil and gas, should the rules only cover what is produced within its borders, or should they also cover what is imported from elsewhere and used in the EU? 

Cutting methane emissions in the energy sector is one of the simplest and most cost-effective climate solutions available. When methane is captured, it can be used to heat homes, create power, or supply industry. When it leaks, it pollutes and costs money. According to the International Energy Agency, the oil and gas industry wasted nearly $90 billion of gas in 2022 through flaring, venting, and leaks. 

These emissions aren’t just a colossal waste of money, they jeopardise Europe’s energy security and have significant climate and health impacts. Methane is a powerful greenhouse gas, more than 80x stronger than carbon dioxide in warming the planet over a 20-year period. In fact, methane is responsible for 0.5°C of the 1.1°C of warming we experience today. 

According to Clean Air Task Force analysis, a regulation that requires imported fossil fuels to meet the same standards as domestic supplies could achieve a staggering 30% reduction in global emissions from the oil and gas sector, helping partner countries save roughly the quantity of Germany’s annual consumption of gas from being wasted. This import standard, as it has become known, would also improve the lives of more than 10 million people by driving down routine venting and flaring, a contributor to respiratory diseases, premature death, and other negative health effects in local populations. 

Despite these impressive benefits, the EU’s recent energy crisis naturally raises an important question: would an import standard present a risk to the EU’s energy security or increase the price of gas and oil? 

New research by Rystad Energy for CATF analysed the trade, price, and emissions impact of a phased-in import standard on oil and gas, and concluded these fears are unfounded. This is due to evolving global oil and gas markets and the low marginal costs for compliance, combined with the increased potential for expansion of clean energy resources. With new energy supplies expected to drastically shift world markets starting in 2025, the import standard is expected to have a minimal cost for suppliers of gas, and even less impact on consumers, because many suppliers will be able to sufficiently reduce emissions enough to avoid the import duty – leaving those that do need to pay the fee with little pricing power to pass the fee on to consumers. Prices will therefore rise about 1% – at most – due to the import standard.

We propose phasing-in the methane import standard as early as 2026. A phased-in approach would set a gradually increasing standard each successive year until 2030, the year currently being proposed by some member states. The phase-in period allows companies and countries to reduce their emissions over time, making the task more manageable. In addition, it would mean this legislation can contribute to the Global Methane Pledge target of 30% methane reduction by 2030 – an international target spearheaded by the EU.  Policymakers should accompany the standard with a ban on routine venting and flaring at oil and gas sites, domestic and foreign, which would also go into effect in 2026. This combined proposal would have more than 20 times the climate impact than a regulation without an import standard.

With such significant climate, health, energy security, and economic impacts at stake, implementing a bold EU Methane Regulation with a strong import standard would be one of the EU’s most impactful climate decisions of the decade, offering enormous returns on a small investment. The world has been waiting for policymakers to take decisive action that meets the urgency of the climate crisis, and if the EU wants to maintain its position as a global climate leader heading into COP28, it needs to get serious about the fastest and cheapest solutions we have to protect our future.