The methane mitigation scene is abuzz with regulatory updates and new voluntary frameworks taking hold across the United States, the European Union, and globally, with COP 28’s charters and agreements. In the U.S., the Quad O b/c rules and the updates made to Subpart W have set the tone for how operators must manage methane emissions to ensure compliance with federal law. Meanwhile, the EU Methane Regulation (EUMR) introduced a new Measurement, Monitoring, Reporting and Verification (MMRV) framework for EU operators, with significant impact on the global liquified natural gas (LNG) supply chain and extending its reach beyond the European Union (EU) operators to global operators looking to place fossil fuels in the EU market.
Though it was enacted for operators within the EU to help drive the bloc towards achieving its Methane Action Plan, this regulation has broader global implications. All fossil fuel importers must pay close attention. This article highlights key requirements, reporting timelines, and the big-picture implications of the regulation for the global LNG supply chain, identifying next steps for industry and global stakeholders to ensure that they are prepared to comply with the milestones it sets out.
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The European Methane Regulation (EUMR) in a Nutshell
Emissions Reporting Guidelines
The EUMR addresses methane emissions in the oil & gas and coal sectors, with an emphasis on monitoring and reporting, leak detection and repair (LDAR), and venting and flaring. Figure 1 (below) highlights the prescribed reporting timeline and requirements for oil & gas operators, showing how they align with Oil & Gas Methane Partnership (OGMP) 2.0 levels with their level 3, which demands source- level measurements as the lowest reporting level required by the regulation.
The regulation then outlines a ramp-up period. By August 2025, the oil & gas and coal sectors must quantify sources of methane emissions using generic emissions factors; by 2026, the regulation requires direct measurement. In August 2028, the regulation reaches its final phase: source-level emissions quantification for non-operated assets and yearly site-level measurements.
Import Reporting Timelines
Chapter 5 turns to fossil fuel imports into the European Union, outlining timelines for importers to take specific actions to ensure that imports comply with both the set MMRV requirements, and methane intensity standards, which will be in place by 2029. (Figure 2).
Notably, the EUMR is yet to set its own technical standards on measurement and quantification, LDAR, and equipment specifications. Instead, it points operators to the best available technical guidance as of August 4th, 2024 (the effective date of regulation), deferring to guidelines prescribed by the United Nations Environment Program (UNEP) OGMP 2.0. The first key deadline is May 2025, when importers of fossil fuels must provide information set out in Annex IX of the regulation to authorities of each member-state. Annex IX requirements include the name and address of the exporter, level to which the fossil fuel producer is measuring emissions, the name of independent third-party verifier, and more.
Leak Detection and Repair (LDAR) Requirements
The regulation establishes requirements for Leak Detection and Repair (LDAR), mandating that industrial operators submit an LDAR program to regulators by May 5, 2025, or within 6 months of starting operations for new sites.
LDAR surveys are categorized as Type 1 (big leaks) and Type 2 (small leaks). The different types require varying timelines for when surveys need to be conducted, depending on the equipment type. The commission will specify the minimum detection threshold and techniques to be deployed for leak detection by August 5, 2025. Until then, operators are advised to use the best available technologies and detection techniques, in compliance with the manufacturer specifications for operation and maintenance.
Venting and routine flaring are prohibited, except in cases of emergency or malfunction. The regulation grants some allowances for flaring and venting in cases that are strictly necessary, unavoidable, and cannot be eliminated for safety reasons.
A key component of the EUMR is the requirement for annual reports to be verified by an approved third-party, accredited to audit and verify submissions made by operators before they are submitted to the competent authority within each member-state. The regulation also grants authority to each member-state to levy penalties for infringement that are “effective, proportionate, and dissuasive,” amounting up to 20% of previous year’s revenue.
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Implications for Global Industry
While the list of stakeholders watching this regulation is long, (Figure 3), producers of crude oil and natural gas—and the countries where they operate—must pay keen attention to the timelines and actions prescribed by the regulation, as well as ripple effects across global regulations.
The EUMR could spur a flurry of MMRV protocols, and activities to define new standards. The regulation requires third countries to establish an MMRV equivalency, which, if established, exempts producers from that country from the reporting obligation set out in the regulation. However, establishing equivalency demands that third countries “have in place and apply” a regulatory MMRV framework that is at least equivalent to that applied within the EU, and demands verification by a third party. At the time of this piece, no country has established equivalency.
A look at the major importers of crude oil and natural gas to the European Union indicates the countries, and by extension, producers within them, that need to take immediate action to ensure that their MMRV standards meet the specifications of the EUMR. Figure 4 shows the major sources of crude oil imports, while Figure 5 shows the major suppliers of natural gas to the EU. The United States is a key player in both categories, particularly in the gas category, with close to 20% of imports originating from the United States. In 2023, the U.S. supplied over 50% of the 120 billion cubic meters (bcm) of LNG imports to the EU1.
As the EU looks to establish a global methane transparency database by 2026, it is important that importing countries and operators take the necessary actions to detect and mitigate methane emissions within their jurisdictions.
What Uncertainties Remain?
Now that the EUMR is in effect, all eyes have turned to its implementation and enforcement. The regulation itself is still missing critical elements for its execution, which must be established quickly to ensure effective implementation. For example:
- Competent authorities within each member-state need to be established.
- Technical standards and prescriptions have yet to be developed.
- Equipment standards are not determined.
- Verification bodies are yet to be certified.
- Parameters of enforcement are not exactly clear, at best.
All of these remain open questions for industry seeking to ensure they meet the regulation’s requirements.
Challenges loom for industry and governments beyond the European Union’s borders as well. Most pressing is the process of establishing equivalence. Considering the disparity in regulatory maturity, one can imagine that the level of complexity to create equivalence will differ from country to country. For example, the U.S. has made significant progress in regulating methane emissions with the Quad-O b/c rules, which introduced the Super Emitter Program and the Waste Emissions Charge (WEC). It has also finalized amendments to Subpart W, which are all aimed at reducing methane and other greenhouse gas emissions in the U.S oil and gas industry.
However, it is yet to be seen if the EU will regard these efforts as equivalent to the EUMR, or if the EU will demand the U.S introduce third party verification, and source- level or site-level reconciliation, which are key differences between the EUMR and the U.S. regulations. The concern of co-mingled products looms large with the challenge of determining methane intensity for each supply stream, compounded by the fact that the methodology for setting a maximum intensity in the first place is not yet defined.
Despite these lingering uncertainties, operators within the EU and third countries cannot sit idly by as deadlines for initial requirements loom. Instead, they should begin to prepare to meet these requirements by drawing on the best available frameworks and technologies.
How Industry Can Prepare for a New Regulatory Landscape
The first step to being prepared is a comprehensive understanding of emissions footprint—its intensity and sources. Today, innovative technologies allow for the quantification of emissions that were previously only assessed via estimates or formulas, providing actionable intelligence as to the exact source of an emission.
Technology Solutions
- Aircraft, drones, and satellite monitoring technologies will all play a key role to empower industrial operators with the data on emissions that they need to meet requirements.
- Regional mapper satellites can alert operators about large or super-emitting events.
- Drone technologies can pinpoint identified leaks.
- High-resolution satellites like GHGSat’s can provide a regular monitoring capability with high revisit rates and granular facility-level data.
GHGSat has seen real-world impact from these technology collaborations. Its high-resolution satellite constellation has the capacity for near-daily revisits, allowing operators to monitor continuously and identify the exact sources of leaks. For example, through a partnership with the Oil & Gas Climate Initiative(OGCI), GHGSat’s constellation supported operators in the Middle East—including Algeria, Kazakhstan, and Egypt—to mitigate methane plumes with a combined average emissions rate of 3,200 kg/hr. GHGSat provided high-resolution satellite data traced the methane plumes to the responsible pipeline or other source, so operators could swiftly address leaks, meeting regulatory requirements and reducing financial loss.
These types of technologies are available today for operators seeking to ensure compliance with evolving regulations—the ability to detect and quantify emissions is fundamental to meeting upcoming requirements.
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