EU proposes suspending methane penalties until 2030 after US pressure

Four energy ministers warned no viable path to methane compliance

The European Commission recommended Monday that EU member states delay noncompliance penalties for companies that violate the bloc’s methane emissions reporting rules until 2030, the Wall Street Journal reported. The fines, which can reach 20% of a company’s annual revenue, had been set to take effect next year.

The EU requires importers of oil, natural gas and coal to monitor and report methane emissions, with the bloc eventually planning to cap the amount of methane allowed per unit of imported energy. Methane is a potent greenhouse gas that traps heat in the atmosphere.

The recommendation follows pressure from the Trump administration and industry groups who said the rules were too hard to comply with and could lead to energy shortages. In a joint letter last month, the energy ministers of the U.S., Qatar, Algeria and Nigeria said they saw “no viable path to compliance” with the EU’s methane regulation, the Journal reported. “Even with adaptive and flexible implementation, significant negative supply and price impacts are a certainty,” the ministers wrote.

Some American multinationals such as Exxon Mobil have subsidiaries in Europe that import energy from outside the bloc, meaning the rules would apply to them as well.

The International Association of Oil & Gas Producers, whose members include Chevron, Exxon Mobil and ConocoPhillips, said the proposed change does not go far enough, the Journal reported.

Disruptions to oil and gas shipments through the Strait of Hormuz have added to concerns in import-reliant Europe, where high prices are hurting the competitiveness of European companies relative to the U.S. and China.

The EU said Monday it remains committed to the methane rules and its emissions-reduction goals. Companies are expected to comply with the rules even if penalties are delayed, and sanctions can still apply if a company engages in deliberate fraud, an EU official said.

The methane rule is one of several EU regulations the Trump administration has opposed. U.S. officials have also criticized EU sustainability reporting requirements and strict new rules for large tech companies, referring to some of those rules as nontariff trade barriers that remain a major irritant in the trans-Atlantic relationship even after the bloc dropped tariffs on many U.S. goods.