New EU Methane Regulation: Here’s What You Need to Know

In recent years, the European Union (EU) has set ambitious goals for reducing greenhouse gas emissions to combat climate change, and the new EU Methane Regulation has come into effect.

Methane (CH4), the second most important component of natural gas, ranks just behind carbon dioxide (CO2) in its overall contribution to climate change. It is responsible for about one-third of current global warming. Besides contributing to global warming, methane has a shorter atmospheric lifespan than CO2 but absorbs much more energy, posing a threat not only to the climate but also to air quality on Earth’s surface.

According to the IPCC, in a hundred-year time frame, methane’s global warming potential is 29.8 times greater than that of carbon dioxide, and over a 20-year period, it is 82.5 times more potent.

The energy sector in the EU, responsible for 19% of methane emissions, has the greatest potential for rapid, effective and cost-effective reductions. 

As a market leader, Macel Plin actively participates in initiatives supporting these goals by providing innovative and comprehensive solutions that help the oil and gas industry achieve a sustainable future.

What are the main sources of methane emissions?

While the energy supply sector has recently achieved significant emission reductions, it remains the largest source of greenhouse gas emissions in the EU, accounting for approximately 27% of all emissions in 2022. The transportation sector follows, contributing nearly a quarter of that year’s total emissions. CO2 emissions from road transport alone exceeded 750 million metric tons (MtCO2) in 2022.

According to Statista, in 2022, the EU’s total net greenhouse gas emissions decreased by 1.3% compared to the previous year, marking an overall reduction of about 31% compared to 1990 levels. One of the major factors for these reductions has been the shift to cleaner energy sources, leading to more than a 40% reduction in emissions from the energy supply sector since 1990.

Why do we need to reduce methane emissions?

1. Impact of greenhouse gases: Methane is an extremely potent greenhouse gas, with over 80 times the warming potential of CO2 over 20 years. Reducing methane emissions can significantly slow global warming.
2. Achieving climate goals: Rapid methane emission reductions are crucial for achieving the 2015 Paris Agreement targets. These include limiting global warming to below 2°C, preferably to 1.5°C, compared to pre-industrial levels (measurements between 1850 and 1900).
3. Air quality and public health:  Controlling methane emissions improves air quality and reduces the risk of respiratory problems and other health issues.
4. Vulnerability and exposure to human ecosystems: Reducing methane emissions lowers the risks of extreme weather events, disruptions in food and water supplies, and threats to biodiversity.
5. Clean energy transition: Reducing methane emissions from the energy sector is a key part of the transition to renewable energy sources and the decarbonization of the energy sector.

KPPP: A new standard for environmentally responsible industrial practices

The KPPP is a compressor unit for the transfer of natural gas. It is a fully integrated system placed on a sturdy steel structure on a semi-trailer, providing a top-tier solution for handling natural gas. Its “plug-and-play” design and advanced gas transfer system enhance operational efficiency.

Natural gas, which is released from pipelines during maintenance, repairs, or construction work, does not enter the atmosphere. Instead, the compressor unit transfers it to the same or an adjacent pipeline.

Advantages of KPPP:

• Reduced carbon footprint
• Environmental protection
• Mobility; ability to access hard-to-reach locations
• Minimizes gas losses
• Economic savings
• No external power sources are required

EU strategy to reduce methane emissions

In November 2023, the European Union reached a provisional agreement on a new EU Regulation on reducing methane emissions in the energy sector. The European Regulation was first proposed in December 2021. It was a part of the Fit-for-55 package, following the adoption of the EU Methane Strategy in 2020.

The regulation includes the following key measures to minimize methane emissions in fossil fuel operations within the EU:

• Mandatory requirements for measurement, reporting, and verification (MRV) of emissions at the source level, including non-operational assets.
• Mandatory detection and repair of equipment leaks for all oil and gas facilities.
• Routine venting and flaring in the oil and gas sector should be banned, and non-routine venting and flaring due to safety hazards or equipment failure should be restricted.
• Obligation to update inventories, monitor methane emissions, and plan for closed, inactive, and abandoned assets.
• Limiting emissions from thermal coal mines starting in 2027, with stricter limits from 2031.

New European methane regulation

The EU’s first rules to reduce methane emissions from the energy sector in Europe and globally have become law. This measure represents a step forward in implementing the European Green Deal and the REPowerEU plan. It emphasizes Europe’s commitment to combating harmful emissions domestically and internationally.

Given that Europe imports a significant portion of the fossil fuels it consumes, the European regulation will also contribute to reducing methane emissions from imported fossil fuels. The regulation gradually introduces stricter requirements to ensure that exporters apply the same monitoring, reporting, and verification standards as economic operators within the EU.

The new rules require the Commission to establish tools to monitor global sources of methane emissions. Satellite data will be used to provide information on the size, occurrence, and location of high-emission sources, whether within or outside the EU.

Specific measures

Under the new regulation, the European fossil gas, oil, and coal industries must measure, monitor, report, and verify their methane emissions to the highest monitoring standards and take action to reduce them.

Gas, oil, and coal operators are required to reduce and stop routine flaring where avoidable and reduce methane releases in emergencies, technical failures, or safety concerns.

Benefits and challenges

These regulations have numerous benefits. Reducing methane emissions can significantly contribute to the fight against climate change. Additionally, reducing gas losses through leaks can result in economic savings for companies.

However, implementing these measures is not without challenges. Implementing new technologies and procedures can be expensive, especially for smaller companies. Additionally, cooperation between various stakeholders, including governments, industry, and non-governmental organizations, is required to ensure the effective implementation of regulations.

Obligations for the oil and gas sector

European oil and gas operators will have to follow new requirements for measuring, reporting, and verifying methane emissions. This includes implementing measures to reduce methane by detecting and repairing leaks with varying frequencies depending on the type of leak and components. They will also need to halt routine flaring (gas release is allowed under specific circumstances).

The European Regulation outlines the following rules:

• Monitoring, reporting and verification

This includes measuring methane emissions and collecting and communicating this data, while verification ensures the accuracy and reliability of reported information through independent assessments and validation processes.

• Leak detection and repair

It involves identifying and repairing unplanned leaks, such as those from gas infrastructure. The goal is to address and reduce leaks.

• Restrictions on routine venting and flaring

Routine venting and flaring (RVF) involve the intentional release of methane into the atmosphere. Venting directly releases methane while flaring converts it into carbon dioxide (CO2). These practices are justified by fossil companies for safety, operational, or regulatory reasons.

• Closed, inactive, temporarily closed and abandoned assets

Within 12 months of the regulation’s entry into force, Member States must make publicly available an inventory of all recorded inactive wells, temporarily closed wells, and permanently closed and abandoned wells. The inventory must then be regularly updated. Evidence of no methane emissions should be available for wells permanently closed and abandoned less than 30 years ago.

Companies must submit reports within 18 months for operational assets and 30 months for non-operational assets, including the following information:

• Type and location of the emission source
• Data by detailed type of emission source, in tons of methane and tons of CO2 equivalent
• Detailed information on quantification methodologies
• All methane emissions for operational assets
• Data on ownership shares and methane emissions from non-operational assets multiplied by ownership share
• List of entities with operational control over non-operational assets

Initiatives in the United States

The U.S. Environmental Protection Agency (EPA) plans to implement similar initiatives for controlling CO2 emissions. Recently, it proposed introducing fees for oil and gas producers to control methane emissions, which account for about one-third of greenhouse gases. According to this proposal, the fee would be $900 per metric ton. An additional plan is a gradual increase to $1,500 per ton by 2026.

In September 2021, the European Union and the United States announced the Global Methane Pledge. This initiative aims to reduce global methane emissions by 30% by 2030 across all methane-producing sectors compared to 2020 levels. It was presented at the United Nations Climate Change Conference (COP 26) in November 2021 in Glasgow. Over 100 countries agreed to support this goal, covering nearly half of global anthropogenic methane emissions.

Conclusion

The European Regulation for reducing methane emissions in the oil and gas industry represents an important step in the fight against climate change. While challenges exist, the environmental and economic benefits are significant. These measures can contribute to a more sustainable and cleaner future with continued efforts and global cooperation.

The success of these regulations will depend on the industry’s readiness to adapt and innovate and the effectiveness of enforcement and oversight by regulatory bodies. The EU continues to work on improving these measures to ensure that Europe remains a leader in the fight against climate change.

Join us in creating a cleaner and more sustainable future. Contact us to learn more about our innovative solutions that actively contribute to the fight against climate change.