EU considering suspending penalties against oil and gas companies that violate methane laws

After?pressure by industry and the United States government, the European Commission has developed plans to let oil and gas firms avoid penalties for 'breaching EU methane emission laws. This follows a call from?oil-and-gas industry groups to suspend the law. They warned that it could disrupt EU fuel exports once tougher provisions come into effect in 2027. The U.S. Government has also requested that the EU exempt U.S. Oil and Gas from the rule.

The Commission, in a draft guidance document to national authorities of EU countries, said that countries could decide not to enforce penalties during a crisis.

The document stated that sanctions should be delayed until a stable situation has been achieved and then resumed in the event of a persistent infringement and a risk to supply security no longer being present.

The document stated that companies could be exempted from the law's penalties, even if no supply crisis exists. However, it was deemed that enforcing penalties would put energy?supplies at risk. The Iran War has caused oil and gas prices to surge, increasing the pressure on governments to secure their energy supplies.

In accordance with the EU methane legislation, imports of gas will be required to comply, as of January 2027, with European standards for monitoring and verifying imported gas. The fines for violating the law can be as high as 20% of an organization's annual revenue.

The U.S. government has strongly resisted these terms. The U.S. is now the EU's largest supplier of liquefied gas as the bloc races against Russia to replace its gas.

The draft guidelines of the Commission would not change any laws, but give national authorities greater?leeway to enforce them.

Environmentalists warned that the move would undermine law's ability for it to direct investments in curbing emission.

Lea Pilsner is a director of Environmental Defense Fund Europe. She said, "If companies conclude non-compliance?carries little or a no consequence, then investment and behaviour shifts in the wrong directions."

Methane, a powerful greenhouse gas, is the second biggest cause of climate changes after carbon dioxide emissions.

Organisations such as the International Energy Agency have identified reducing methane emission as one of most effective and cost-effective methods to combat climate change.

A spokesperson for the Commission declined to comment about the document that was reported by Politico earlier on Wednesday. (Reporting and editing by Daniel Wallis in Bengaluru, Chandni Shah from Bengaluru)

(source: Reuters)