Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 (Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 192(1) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the ordinary legislative procedure (3),

Whereas:

(1) Methane is second only to carbon dioxide (CO2) in its overall contribution to climate change and is responsible for approximately a third of current warming. The amount of methane in the atmosphere globally has risen sharply over the last decade.

(2) The Intergovernmental Panel on Climate Change (IPCC), created within the framework of the United Nations (UN), published in its Sixth Assessment Report the finding that deep reductions in anthropogenic methane emissions are needed by 2030 to limit global warming to 1,5 oC. That report shows that, although methane has a shorter average atmospheric residence time than CO2, 10 to 12 years compared to hundreds of years, its greenhouse effect over a 20-year period is over 80 times more significant than that of CO2. In particular, according to the IPCC, while methane has 29,8 times greater global warming potential than CO2 on a 100-year timescale, it is 82,5 times more potent on a 20-year timescale.

(3) It appears from the Air quality in Europe – 2020 report of the European Environment Agency that methane is a precursor gas for ground-level ozone and contributes to air pollution. Tackling methane emissions would address not only environment and climate but also improve protection of human health.

(4) According to recent estimates by the UN Environment Programme (UNEP) and the Climate and Clean Air Coalition (CCAC), methane emission reductions of 45 % by 2030, based on available targeted measures and additional measures in line with the UN Sustainable Development Goals, could avoid 0,3 oC of global warming by 2045.

(5) According to the International Energy Agency online data service World Energy Balances, the Union is the world’s largest importer of fossil energy, and as such, an important driver of global methane emissions.

(6) The European Green Deal combines a comprehensive set of mutually reinforcing measures and initiatives aimed at achieving climate neutrality in the Union at the latest by 2050. In its communication of 11 December 2019 on the European Green Deal, the Commission indicated that the decarbonisation of the gas sector would be facilitated, including by addressing the issue of energy-related methane emissions. In October 2020, the Commission adopted an EU strategy to reduce methane emissions (the ‘Methane Strategy’) setting out measures to cut methane emissions in the Union, including in the energy sector, and at global level. Regulation (EU) 2021/1119 of the European Parliament and of the Council (4) sets out the target for economy-wide climate neutrality at the latest by 2050 and establishes a binding Union domestic reduction target for net greenhouse gas emissions (emissions after deduction of removals) of at least 55 % compared to 1990 levels by 2030. It follows from the impact assessment accompanying the proposal for this Regulation that, under the assumptions of the preferred policy option for the methane legislative proposal combined with the assumptions of the ‘Fit for 55’ legislative package, 77 % of all methane emissions associated with oil, gas and coal projected for 2030 can be reduced cost effectively from a social and environmental perspective. That would contribute to limiting global warming to 1,5 oC and would allow the Union to effectively take the lead in fighting methane emissions and to strengthen its energy security.

(7) Methane emissions are included in the scope of the Union greenhouse gas reduction targets for 2030, set out in Regulation (EU) 2021/1119, and the binding national emission reduction targets under Regulation (EU) 2018/842 of the European Parliament and of the Council (5). However, there is currently no Union legal framework setting out specific measures for the reduction of anthropogenic methane emissions in the energy sector. In addition, whilst Directive 2010/75/EU of the European Parliament and of the Council (6) covers methane emissions from the refining of mineral oil and gas, it does not cover methane emissions from other activities in the energy sector.

(8) In this context, this Regulation should apply to the reduction of methane emissions in oil and fossil gas upstream exploration and production, in inactive wells, temporarily plugged wells and permanently plugged and abandoned wells, in fossil gas gathering and processing, in gas transmission, distribution and underground storage, as well as in liquefied natural gas (LNG) facilities. This Regulation should also apply to active underground coal mines and surface coal mines, and closed or abandoned underground coal mines.

(9) Rules for accurate measurement, monitoring, reporting and verification of methane emissions in the oil, gas and coal sectors, as well as for the reduction of those emissions, including through leak detection and repair (LDAR) surveys and restrictions on venting and flaring, while ensuring the protection of workers from methane emissions, should be addressed by an appropriate Union legal framework. The rules laid down in this Regulation should enhance transparency with regard to imports of fossil energy into the Union and contribute towards the wider uptake of methane emission mitigation solutions across the globe. A 20-year and a 100-year time horizon for global warming potential should be used.

(10) Compliance with the obligations under this Regulation is likely to require investments by regulated entities, and the costs associated with such investments should be taken into account in tariff setting, subject to efficiency principles. The necessary costs should not result in a disproportionate financial burden on end users and consumers.

(11) Each Member State should appoint at least one competent authority to oversee the effective compliance by operators, undertakings, mine operators and importers with the obligations laid down in this Regulation and should notify the Commission about such appointment and any changes thereto. Those competent authorities should be provided with sufficient financial and human resources and should take all the necessary measures to ensure compliance with this Regulation in accordance with the tasks specifically attributed to them. The competent authorities should establish a contact point. Taking into account the cross-border character of energy sector operations and methane emissions, the competent authorities should cooperate with each other and with the Commission. In that context, the Commission and the competent authorities should form together a network of public authorities applying this Regulation to foster close cooperation, with the necessary arrangements for exchanging information and best practices, and to allow for consultations.

(12) In order to ensure a smooth and effective implementation of this Regulation, the Commission should support Member States through the Technical Support Instrument established by Regulation (EU) 2021/240 of the European Parliament and of the Council (7) providing tailor-made technical expertise to design and implement reforms, including reforms promoting the reduction of methane emissions in the energy sector. That technical support could, for example, involve strengthening administrative capacity, harmonising the legislative frameworks and sharing relevant best practices.

(13) In order to ensure the performance of the tasks of the competent authorities, operators, undertakings, mine operators and importers should provide those authorities with all necessary assistance. In addition, operators, undertakings, mine operators and importers should take all the necessary actions identified by the competent authorities within the period determined by the competent authorities or any other period agreed with the competent authorities.

(14) One of the main mechanisms available to the competent authorities should be inspections, including examination of documentation and records, emissions measurements and site checks. Inspections should take place regularly, on the basis of an appraisal of the risks, such as environmental risks, associated with each site, carried out by the competent authorities. The competent authorities should take into account the established control mechanisms and the best practices available to them. In addition, inspections should be carried out to investigate substantiated complaints and occurrences of non-compliance and to ensure that repairs or replacements of components and mitigation measures are carried out in accordance with this Regulation, as well as to regularly check compliance of importers with this Regulation. Where the competent authorities identify a serious breach of this Regulation, they should issue a notice of remedial actions to be taken by the operator, undertaking, mine operator or importer. Alternatively, the competent authorities should be able to decide to instruct the operator, undertaking, mine operator or importer to submit for their approval a set of remedial actions to address the breach. Competent authorities should keep records of the inspections, and the relevant information should be made publicly available in accordance with Directive 2003/4/EC of the European Parliament and of the Council (8).

(15) In order to determine the seriousness of an infringement of this Regulation, the competent authorities should consider the environmental damage and the impact on human safety and health, as well as the likelihood of the infringement to affect, to a significant degree, data reliability and robustness in the monitoring and reporting obligations under this Regulation.

(16) In light of the proximity of some methane emission sources to urban or residential areas and their impact on health, environment and climate, natural or legal persons should be able to lodge duly substantiated complaints with the competent authorities on possible infringements of this Regulation. It should be possible in that context to use the European e-Justice Portal to host relevant information, as made available by Member States, in particular the contact details of the competent authorities, the most important steps of the complaint procedure, as well as the rights and basic rules to follow. The competent authorities should keep complainants informed of the procedure and decisions taken and complainants should receive a final decision within a reasonable time after lodging the complaint.

(17) A robust verification framework improves the credibility of reported data. In addition, the level of detail and technical complexity of methane emission measurements requires proper verification of methane emission data reported by operators, undertakings, mine operators and importers. While self-verification is possible, third party verification ensures greater independence and transparency. In addition, it allows for a harmonised set of competences and level of expertise that may not be available to all public entities. Verifiers should be accredited by accreditation bodies in accordance with Regulation (EC) No 765/2008 of the European Parliament and of the Council (9) or otherwise authorised in a manner comparable to Regulation (EC) No 765/2008. Independent verifiers should thus ensure that emissions reports prepared by operators, undertakings, mine operators and importers are accurate and in compliance with the requirements set out in this Regulation. The verification activities should be aligned with the relevant European or other international standards and methodologies for verifiers and should take due account of the nature of the verified activities. The verifiers should review the data in the emissions reports to assess the reliability, credibility and accuracy of the data. To ensure the accuracy of the data, verifiers should, where relevant, carry out announced and unannounced site checks. Verifiers should be separate from competent authorities and should be independent from the operators, undertakings, mine operators and importers, who should provide them with all assistance necessary to enable or facilitate the verification activities, in particular as regards access to the sites and the presentation of documentation or records.

(18) In performing their tasks and exercising their powers under this Regulation, the Commission, competent authorities and verifiers should consider the information made available internationally, for example by the International Methane Emissions Observatory (IMEO), in particular with regard to methodologies for data aggregation and analysis and verification of methodologies and statistical processes employed by operators, undertakings, mine operators and importers to quantify data in their emissions reports. The reference criteria in that respect can include the Oil and Gas Methane Partnership (OGMP) reporting framework, technical guidance documents and reporting templates.

(19) The IMEO was set up in October 2020 by the Union in partnership with the UNEP, the CCAC and the International Energy Agency, and presented at the G20 Summit in October 2021. The IMEO has been tasked with collecting, reconciling, verifying and publishing data on anthropogenic methane emissions at a global level. The IMEO could play a role in identifying super-emitters through an early detection and warning system.

(20) As party to the United Nations Framework Convention on Climate Change (UNFCCC) (10) and the Paris Agreement adopted under the UNFCCC (11) (the ‘Paris Agreement’), the Union is required to provide annually an inventory report of anthropogenic greenhouse gas emissions constituting an aggregate of the Member States national greenhouse gas inventories, prepared using good practice methodologies accepted by the IPCC.

(21) Regulation (EU) 2018/1999 of the European Parliament and of the Council (12) requires Member States to report greenhouse gas inventory data and their national projections to the Commission. Pursuant to that Regulation, reporting is to be undertaken using UNFCCC reporting guidelines, and is often based on default emission factors rather than direct source-level measurements, implying uncertainties on the origin, frequency and magnitude of emissions.

(22) Country data reported pursuant to UNFCCC reporting provisions is submitted to the UNFCCC secretariat in accordance with different tiers of reporting, in line with IPCC guidelines. In that context, the IPCC generally suggests using higher tier methods for those emission sources which have a significant influence on a country’s total greenhouse gas inventory in terms of absolute level, trend or uncertainty.

(23) A tier represents a level of methodological complexity. Three tiers are available. Tier 1 methods typically use IPCC default emission factors and require the most basic, and least disaggregated, activity data. Higher tiers usually utilise more elaborate methods and source-, technology-, region- or country-specific emission factors, which are often based on measurements, and normally require more highly disaggregated activity data. Specifically, tier 2 requires the use of country-specific, instead of default, emission factors, while tier 3 requires plant-by-plant data or measurements and comprises the application of a rigorous bottom-up assessment by source type at the individual facility level. The IPCC stated in its 2019 Refinement to the IPCC 2006 guidelines for national greenhouse gas inventories that progressing from tier 1 to tier 3 represents an increase in the certainty of measurements of methane-related emissions.

(24) Member States have different practices regarding the tier level at which they report their energy-related methane emissions to the UNFCCC secretariat. Reporting at tier 2 for large emission sources is in line with IPCC reporting guidelines, as tier 2 is considered a higher tier method. Reporting at tier 1, the lowest level, is still very common in several Member States for methane emissions from coal, gas and oil. As a result, estimation methodologies and reporting of energy-related methane emissions vary across Member States.

(25) Currently, voluntary industry-led initiatives remain the principal course of action for methane emission quantification and mitigation in many countries. A key industry-led initiative in the energy sector is the OGMP, a voluntary initiative on measuring and reporting methane emissions, created in 2014 by UNEP and CCAC, on whose board the Commission is represented. The OGMP focuses on establishing best practices to improve the availability of global information on methane emission quantification and management and to drive mitigation actions to reduce methane emissions. The OGMP’s work on developing standards and methodologies involves governments, civil society and business. To date, over 115 companies, with assets in more than 60 countries on five continents, representing over 35 % of the world’s oil and gas production and over 70 % of LNG flows have become members of UNEP’s OGMP 2.0. The OGMP 2.0 framework is the latest iteration of a dynamic methane emissions standard and can provide a suitable basis for methane emissions standards, based on sound scientific standards.

(26) Against that background, it is necessary to improve the measurement of methane emissions and the quality of the reported data, including on the main sources of methane emissions associated with energy produced and consumed within the Union. Moreover, the availability of source-level data and the robust quantification of methane emissions should be ensured, thereby increasing the reliability of reporting as well as the scope for appropriate mitigation measures.

(27) For quantification and reporting to be effective, operators and undertakings should be required to quantify and report methane emissions by source, and to make aggregated data available to Member States in order for Member States to be able to improve the accuracy of their inventories and reports. In addition, effective verification of the reported data is necessary. In order to minimise the administrative burden for operators and undertakings, they should report on an annual basis.

(28) This Regulation, which builds on the relevant parts of the OGMP 2.0 framework, contributes towards the collection of reliable and robust data that would form a sufficient basis for monitoring methane emissions and, where necessary, provides for additional action to further curb methane emissions.