By Kate Abnett and Valerie Volcovici
BRUSSELS (Reuters) -The European Union is looking at ways to make it easier for U.S. gas exports to comply with its methane emissions rules, as the bloc attempts to avert a trade war with U.S. President Donald Trump, three sources familiar with the matter told Reuters.
The European Commission is working on its offer for trade negotiations with the United States, to attempt to avoid Trump’s planned tariffs – with both sides signalling that energy could form part of a broader trade deal.
Trump has said several times the EU should buy more American oil and gas to lower its trade surplus with the United States. European Commission President Ursula von der Leyen has said the EU could increase U.S. LNG purchases, as the bloc seeks to quit Russian gas by 2027.
As part of the energy options being explored to aid trade talks with the U.S., the Commission is looking at using flexibilities in how it applies EU methane rules, which could benefit U.S. LNG exporters, the sources said.
The aim would be to avoid weakening the overall law, while introducing technical rules that could enable U.S. exporters to be deemed to be following “equivalent” methane rules to those of the EU, and therefore automatically comply with the EU law, they said.
The sources did not provide details on how that could be accomplished.
The move could be complicated by Trump’s plan to scrap existing U.S. regulations requiring gas producers to report their methane emissions, making it harder for the EU to justify letting U.S. companies automatically comply.
A European Commission spokesperson declined to comment on whether it was exploring possible flexibilities in the methane law that could benefit U.S. LNG exporters.
“The Commission has an ongoing dialogue with industry on all relevant matters related to our legislation,” the spokesperson said.
Methane is a powerful greenhouse gas and the second-biggest cause of climate change after carbon dioxide emissions.
Starting this year, the EU requires importers of oil and gas to Europe to monitor and report the methane emissions associated with those imports.
The EU methane law could give U.S. LNG an advantage over gas from suppliers with a higher methane emissions intensity, such as Russia and Algeria.
But U.S. exporters warn they will struggle to technically comply with the law, because the fragmented nature of the country’s gas industry means they cannot track methane emissions along their value chains, since one LNG shipment may contain co-mingled sources of fuel from numerous gas fields.
From 2027, the EU law will make compliance with methane rules equivalent to those of the EU a requirement for foreign suppliers to sign new contracts with European buyers.
The European Commission held an online meeting last month with U.S. LNG companies to discuss their concerns about the law.
The U.S. is already the EU’s biggest supplier of LNG, having ramped up deliveries as Europe raced to replace Russian gas following Russia’s 2022 invasion of Ukraine.
The U.S. supplied 45% of the EU’s LNG imports last year, which worked out at 16.5% of total EU gas and LNG imports.
(Reporting by Kate Abnett in Brussels, Valerie Volcovici in Washington D.C.; editing by Richard Valdmanis and Ros Russell)
Comments