EU Relents on Methane Rules Amid Global Energy Crisis Fears
The European Commission has recommended that EU governments waive penalties for oil and gas companies that breach its methane emissions law due to pressure from the United States government. The decision is not binding, but many member states are expected to follow the EC's advice.
The EU's climate policy, adopted in 2024, aims to crack down on methane leaks in a bid to tackle climate change. However, geopolitical developments in the Middle East have led to a global energy system reshaping.
The Strait of Hormuz has been almost completely closed since February, following the U.S.-Israeli-led war on Iran, affecting an average of 20% of global petroleum liquids and gas supply. The EC stated that methane is the second-greatest contributor to climate change, heating the planet up to 80 times more than carbon dioxide over two decades.
The delay in the rule's implementation is expected to help the EU avoid supply chain disruptions. Companies that fail to comply could face fines equivalent to up to 20% of their annual turnover, but critics have suggested amending the law for gradual implementation.