EU Delays Methane Regulation Amid Ongoing Gas Crunch
The European Commission has decided to delay the implementation of its methane regulation amid the ongoing gas crunch in Europe. Energy Commissioner Fan Jorgensen told Bloomberg that he has instructed his services to look into postponing the import part of the legislation by one year, giving market actors time to comply without hurting the security of supply and prices.
The regulation requires companies selling liquefied natural gas (LNG) to an EU entity to provide information about the methane footprint of their commodity from the well to the tanker. The US Energy Secretary Chris Wright previously described it as 'a critical non-tariff trade barrier' that imposes an undue burden on U.S. exporters and their trade relationship.
Qatar has repeatedly threatened to suspend sales to the EU if the Commission goes ahead with the regulation, which could ensure a steady flow of American LNG but will not solve Europe's price problem. The EU is struggling with high gas prices, currently running at levels last seen in 2022-2023, and supply buffers are thinner than they were four years ago.
The delay may address US concerns about LNG trade, but it will do nothing to mitigate the affordability of gas for households and businesses. As winter approaches, the gas supply question is only going to become more pressing, and prices are likely to move even higher.