Country
Assessment
No direct evidence regarding negotiated agreements between the public and private sectors could be found in the sources consulted.
Article 12 of the 2021 proposal requires operators to submit a report containing source-level methane emissions to the competent authorities. Starting 48 months after this regulation comes into effect, operators must submit to the competent authorities annual reports containing direct measurements of source-level methane emissions from their operated and nonoperated assets. The EP amendments further detail the reporting requirements. Amendments are more stringent in terms of direct measurement and emissions quantification, and shorten the reporting times. The provisional agreement reached between the EP and European Council in November 2023 follows these recommendations. For example, operators must submit reports quantifying source-level methane emissions within 18 months and direct measurements quantification of source-level methane emissions for operated assets within 24 months from the entry into force of the regulations. Reports on nonoperated assets are due within 48 months. Article 12 also mentions that the Commission will develop a reporting template. The EP amendments add that upstream, midstream, and downstream oil and gas operators can use the technical guidelines and templates of the OGMP 2.0 until the new template is available. Article 14 requires operators to develop LDAR programs within six months of the date on which this regulation comes into effect and start conducting the first survey within nine months. Article 27, Paragraph 1, requires importers to report their products’ methane footprint within nine months of the date on which this regulation comes into effect. The provisional agreement of November 2023 requires exporters to EU to comply with a maximum methane intensity threshold by 2030.
Article 6 of the 2021 proposal allows the competent authorities to conduct inspections and field audits, and check operators’ records, although no independent measurement methods are being prescribed. Article 8, Paragraph 1, requires independent verifiers to verify that the emission reports submitted to them by operators are compliant in terms of emission factors and methodologies deployed, risk of inappropriate measurement and reporting, and any quality assurance and control systems implemented. Other measures such as site checks are also possible. Article 8, Paragraph 3, requires the subsequent issuance of a verification statement confirming that the emissions report complies with the requirements. Article 8, Paragraph 2 (as amended), requires verifiers to use “publicly available European or international standards for methane emissions quantification,” but operators must provide verifiers with information on the standards or methodologies used in case no European or international standards are available. According to amended Article 8, Paragraph 2, “Verifiers shall conduct announced and unannounced site checks to determine the reliability, credibility and accuracy of the data sources and methodologies used.” Amended Article 10 assigns the IMEO the task of “reporting of findings on major discrepancies between data sources contributing to build more robust scientific methodologies.”
The EP amendments to the 2021 proposal replace “estimation” with “quantification” and emphasize direct measurement. There are no specific formulas on engineering estimates, but the proposed regulation refers to the OGMP 2.0 framework, European standards, or international measurement and reporting standards.
According to Recital 13 of the 2021 proposal, “The main mechanism available to the competent authorities should be inspections, including examination of documentation and records, emissions measurements and site checks.” Article 5, Paragraph 2, of the 2021 proposal requires operators to provide the competent authorities with all necessary assistance, including access to the premises and the presentation of documentation or records. Article 8, Paragraph 4, requires operators to provide the verifiers the same access. Article 14, Paragraph 6, requires operators to record all leaks irrespective of size and keep the records for 10 years.
The IMEO was set up in October 2020 and launched at the October 2021 G20 Summit. The IMEO has been tasked with collecting, reconciling, verifying, and publishing anthropogenic methane emissions data at a global level. The Commission and the IMEO will set up a Methane Supply Index as envisioned in the EU Methane Strategy . According to Article 10, verifiers, the competent authorities, and the Commission shall consider the information made available by the IMEO, and the Commission shall submit relevant methane emissions data to the IMEO. Article 28 requires the EC to establish a methane transparency database based on the data supplied—this is in accordance with the requirements of the proposed regulation (some of which are discussed in section 16 of this case study). Article 29, Paragraph 1, requires the EC to establish a methane monitoring tool and make it publicly accessible. Article 30, Paragraph 5, requires EU Member States to annually publish information on the penalties imposed under this regulation, the infringements, and the operators on which penalties have been imposed.
Amended Article 30, Paragraph 2 , allows for the “suspension of the authorisation to place oil, gas or coal to the market in case of serious or repeated breaches” of the proposed regulations subject to energy security considerations.
According to Article 4 of the 2021 proposal , the competent authority (or authorities) is (are) responsible for the enforcement of the regulation (see section 6 of this case study). Article 30, Paragraph 1, delegates to the EU Member States the authority to set the rules on the penalties applicable to infringements and to take all required measures to implement the penalties, “including the polluter pays principle.” Article 30, Paragraph 2, requires penalties to be effective, proportionate, and dissuasive. Article 30, Paragraph 3, states that the key areas of infringement subject to penalties should be the failure of operators to carry out LDAR programs, assist the authorities, and submit emissions and LDAR progress reports. Venting outside the preauthorized environment, including the related reporting obligations, and routine flaring also constitutes an infringement subject to penalties (see sections 9 and 10 of this case study). EP amendments add similar requirements for importers.
No direct evidence regarding market-based principles could be found in the sources consulted. Carbon dioxide emissions from the oil and gas sector are covered under the EU Emissions Trading System (EU ETS) Act No. 99 Relating to Greenhouse Gas Emission Allowance Trading and the Duty to Surrender Emission Allowances, 2004, which entered into force in 2005.
In light of the novelty of methane emissions regulations, the EC introduces several requirements, which are to be implemented and upgraded within a certain period after these regulations come into effect. According to Article 4 of the 2021 proposal , EU Member States shall designate the competent authority (or authorities) and notify the EC within three months. Article 6, Paragraph 1, requires the competent authority (or authorities) to conduct the first inspection within 18 months. For inactive wells, Article 18 requires EU Member States to establish and publish an inventory within six months. Reports containing emission levels must be issued after 18 months and on March 30 every year thereafter. Amended Article 18, Paragraph 6 , requires Member States or the responsible parties to develop a mitigation plan to remediate, reclaim, and permanently plug inactive wells within 12 months. Plans should be implemented within 24 months of this regulation coming into force. In line with Article 12, operators must submit within 10 months the first monitoring report for source-level methane emissions using engineering estimates, within 12 months reports containing direct measurements of source-level methane emissions from operated assets, and within 24 months—and on March 30 every year thereafter—reports containing direct as well as site-level measurements. For nonoperated assets, these periods are 24 and 42 months. Article 14 of the 2021 proposal requires operators to repair or replace all components found to be leaking methane. Any such action must be taken within five days after leak detection, and the effectiveness of any repairs must be verified no later than 15 days thereafter. The EP amendments provide more specific guidelines on LDAR frequency and standards. For example, LDAR surveys must be conducted every two or four months for aboveground components depending on the detection limits introduced in new paragraphs of Article 14. LDAR surveys must be conducted every five months for underground components emitting more than 500 parts per million or 5 grams per hour of methane. Article 17, paragraph 1, requires operators to “install all flare stacks that uses combustion devices with an auto-igniter or continuous pilot and at least 99% destruction and removal efficiency for hydrocarbons” within 18 months of this regulation coming into force. Different requirements and timelines apply to coal mines.