European Commission To Extend Methane Reporting Rules To 2028

The European Commission is working on a proposal to delay methane reporting rules for imported oil and gas from January 2027 to January 2028 as governments raise energy security concerns.

Companies that fail to comply with the EU law could face fines of up to 20 per cent of annual turnover, while methane intensity limits are scheduled to apply from 2030.

Industry-backed research says nearly half of EU gas imports could struggle to comply, while separate analysis argues sufficient compliant supply is available.

Based on the above concerns the European Union is weighing a delay to its landmark methane rules for imported oil and gas as tighter energy markets intensify pressure on Brussels to balance climate regulation with security of supply.

The European Commission is considering postponing the rules after France, the United States and more than a dozen EU member states raised concerns about implementation. 

The requirements are currently due to take effect in January 2027.

A one-year delay would push the start date to January 2028. Any change would require approval from EU governments and the European Parliament.

Europe’s methane rules reach beyond its borders, ESG News reports.

The EU legislation is the world’s first law designed to target methane emissions associated with imported fossil fuels.

From January 2027, foreign oil and gas producers supplying the bloc are due to face monitoring and reporting requirements for methane emissions. Companies that fail to comply could face fines equivalent to as much as 20 per cent of annual turnover.

The regulation is set to tighten further from 2030, when the EU plans to impose methane intensity limits on imported oil and gas.

That gives the legislation considerable international reach. Europe is a major importer of fossil fuels, meaning its regulatory standards can influence production practices far beyond EU borders.

Methane is the second-largest contributor to climate change after carbon dioxide. It traps more heat than CO2 over shorter periods but also breaks down faster in the atmosphere. Rapid reductions can therefore have a relatively immediate effect on the rate of warming.

For oil and gas producers, emissions commonly come from wells, pipelines and other infrastructure. Canada, Norway and Nigeria are among countries that already regulate methane leaks from domestic fossil fuel production.

Pressure to delay implementation has increased as conflict in the Middle East disrupts global oil and gas markets.

French President Emmanuel Macron has requested a one-year postponement, arguing that the current timetable could create legal risks for importers as energy supplies tighten.

More than a dozen EU countries also called in June for the rules to be delayed or suspended. They include Germany, Europe’s largest gas market. Italy and the Czech Republic have pushed for a three-year delay.

Brussels attempted to ease concerns in July by advising countries to waive fines for companies breaching the requirements. Political resistance continued.

The United States, now Europe’s largest supplier of liquefied natural gas, has also warned that the rules could disrupt EU fuel supplies.

The central concern is commercial. Producers or traders unable to meet reporting and verification requirements could decide against sending LNG cargoes to Europe if doing so exposes them to fines or legal uncertainty.

Those risks have become more politically sensitive as European gas inventories remain below normal seasonal levels amid elevated prices and disruption to Middle Eastern energy flows.

Italian utility Edison has said it expects no LNG cargoes from QatarEnergy until December 2026 because of the Iran conflict.

Industry and environmental studies reach different conclusions

A postponement to January 2028 would give importers additional time to establish compliance systems and secure independent verification of emissions data.

It could also allow companies to sign gas supply agreements covering the coming winter and subsequent periods without the immediate risk of violating the methane regulation.

A Wood Mackenzie study backed by the oil and gas industry and published in March found that nearly half of EU gas imports could face difficulties complying with the rules.

Research released by Rystad Energy for the Environmental Defense Fund in June reached a different conclusion. It found that ample gas volumes could meet the EU’s methane monitoring requirements, although companies would still need their compliance verified.

EU officials have also said assessing the regulation’s impact on supply contracts is difficult because many commercial agreements are not publicly available.

Brussels faces a climate and energy trade-off

The debate puts two EU priorities into direct tension: cutting methane emissions across fossil fuel supply chains and maintaining access to reliable energy during a period of geopolitical disruption.

For producers and importers, the immediate issue is regulatory certainty. A delay could provide more time to establish measurement, reporting and verification systems, but it would also postpone one of Europe’s most consequential attempts to extend climate standards across global fossil fuel markets.

The Commission has not confirmed when it will formally propose changes. Officials have indicated that a proposal could arrive soon.

Any revision will then move to negotiations between EU governments and the European Parliament. The outcome will determine not only when the methane requirements begin, but how far Europe is prepared to adjust climate regulation when energy security comes under pressure.