U.S. dials up pressure on EU Methane Regulation

The European Union appears to be softening compliance pathways for its landmark Methane Regulation, potentially paving the way for more LNG to flow into Europe. At the same time, the U.S. government and industry lobbyists want a much more aggressive rollback of the policy altogether.

The Methane Regulation seeks to ensure that gas imported into Europe comes from gas producers with low levels of methane emissions at their production sites.

The EU is phasing in the Methane Regulation over several years. By 2027, European gas importers must demonstrate that the gas they import comes from jurisdictions where measuring, monitoring, reporting and verification (MRV) of methane emissions are equivalent to that of the EU. By 2030, the gas imported into Europe must meet methane intensity standards, although the precise limits have not been set yet.

The European Commission has proposed that companies can comply with the requirements by either having the gas “certified” by a third-party or by adopting a “trace-and-claim” system. On December 15th, European energy ministers met and expressed support for the proposal. The decision could formally bless approaches that will facilitate more LNG flowing to Europe.

These schemes present a series of problems. Current gas certification concepts only apply to production sites, omitting methane emissions from the sprawling midstream, downstream, and shipping segments of the gas trade. Peer-reviewed research shows that methane is released all along the supply chain, including from compressor stations, pipelines, LNG terminals, tankers, regasification terminals, and even in distribution pipeline networks.

Even at production sites, methane emissions are ever present. Gas flares often do not burn gas as efficiently as regulators assume, resulting in more methane released into the atmosphere than official data suggests.

Some studies find that LNG is actually worse for the climate than coal. Even under optimal assumptions, LNG is still a fossil fuel, and burning gas releases climate-warming CO2.

Another 2025 study found that after adjusting for methane emissions from gas infrastructure, roughly two-thirds of the total U.S. greenhouse gas reductions since 2005 are effectively wiped out.

U.S. wants repeal of Methane Regulation

The concessions at the European level on the Methane Regulation do not go far enough for some in the industry on both sides of the Atlantic — nor were they enough for the Trump administration.

In a letter from the U.S. government, seen by Gas Outlook, the Trump administration called the Methane Regulation “unworkable,” and demanded what would amount to a complete gutting of the regulation.

Short of a “full repeal,” the U.S. wants a “delay” until 2035 for the requirement that American drillers provide emissions data.

“The EU Methane Regulations is a critical non-tariff trade barrier that imposes an undue burden on U.S. exporters and our trade relationship,” the document said.

The letter also referred to the U.S.-EU trade deal from last summer, which included the commitment from Europe to purchase $750 billion in energy products from the U.S.

Labelling the Methane Regulation a “non-tariff trade barrier” suggests Washington could escalate the dispute, or fold the Methane Regulation into the broader trade conflict that is at serious risk of reigniting. The U.S. and Europe are also at odds over digital services, the fate of Ukraine, and the Trump administration’s recent national security strategy, which seems to put Europe in the crosshairs. U.S. officials are threatening fees or restrictions on European companies in response to European regulation on the tech sector.

The U.S. wants Europe to automatically recognise U.S. LNG as having “equivalency” with European regulation. That assertion is especially problematic given that the Trump administration has torn up methane regulations and delayed the methane fee that was on the verge of implementation until 2035.

How could the American oil and gas sector demonstrate regulatory “equivalence” with European standards when the Trump administration has cancelled much of its own methane regulation? Indeed, the U.S. government’s letter admits as much.

“Information about the origin and methane intensity of supply is not required under current contracts with EU producers and is above and beyond what is required domestically of our energy producers by U.S. federal authorities,” the letter states.

Finally, the U.S. government demanded the EU commit to not apply penalties for non-compliance or “remove all risk of penalties in the legislation.”

Industry pressure

At the same time, lobbying groups and trade associations representing both the U.S. and European oil and gas industries signed a joint letter calling for a much deeper weakening of the Methane Regulation, including a suspension of implementation for a period of time.

The letter was signed by some of the most noteworthy oil and gas trade associations, including the American Petroleum Institute and LNG Allies in the U.S., along with Europe’s Eurogas and FuelsEurope.

The Methane Regulation’s “prescriptive compliance obligations with challenging timelines” could make oil and gas importers “de facto non-compliant as of 2027,” the letter states.

It “contributes to the reluctance [of EU buyers] to enter into contracts due to the perceived risks,” the statement says. The industry calls on the Commission to reconsider the regulation in omnibus legislation, which would mean effectively rewriting the programme and significantly delaying its implementation.

The letter also says that it wants the Commission to apply the “stop-the-clock mechanism for obligations under Chapter 5,” a dramatic step that would freeze the implementation of the Methane Regulation until it can be rewritten.

The two-pronged blitz from the U.S. government and the trans-Atlantic fossil fuel industry is putting significant pressure on the European Commission.

It remains to be seen how far Europe will go in submitting to U.S. demands.

“We are trying to be as helpful as we can, with regards to implementation, but the legislation stands,” EU Energy Commissioner Dan Jorgensen told reporters on December 15th. “We are not considering withdrawing the legislation or an exemption to the legislation.”

(Writing by Nick Cunningham; editing by Sophie Davies)