EU member states have agreed to a one-year postponement of methane monitoring and reporting on oil, gas and coal imports, citing energy security concerns.
The Council of the EU said on Friday that the decision had been taken to “avoid placing additional pressure on the EU’s security of supply, in view of the disruption to energy markets caused by the conflict in the Middle East”.
EU member states failed to endorse a negotiating position on the EU Methane Regulation at a meeting on 22 October.
A proposal to push back certain aspects of the EU’s flagship methane rulebook by one year was tabled by the European Commission in October, following heavy criticism by US politicians, trade bodies and EU member states centring on the feasibility of implementation.
A Brussels policy analyst told Responsible Investor that delegates from Germany, Italy and Spain requested more time to decide their respective positions.
They said influential French and German delegations, in favour of a one-year delay, were concerned about the costs and feasibility associated with implementation but were not opposed to the legislation’s intent.
The move sets up a confrontation with the European Parliament, which is backing a three-year delay. Representatives from the Council and Parliament will now commence trilogue negotiations to hammer out a compromise.
The EU Methane Regulation will require fossil fuel importers and producers to monitor and eventually reduce methane emissions.
The Commission’s amendments would delay obligations for natural gas, oil and coal importers to show that their suppliers comply with monitoring, reporting and verification measures – which had been due to kick in on 1 January 2027.
They would also delay methane intensity reporting for both importers and EU producers, which had been set to start on 5 August 2028.
A subsequent requirement to ensure that methane intensity is below a maximum limit, which was due to apply from 5 August 2030, would also be delayed. The limit will be established by the Commission ahead of the rule’s application.
The Council’s agreement also leaves the door open for an additional year-long delay based on the outcome of a review of whether sufficient implementation infrastructure is in place, due in September 2027.
Member states agreed that further postponements will be made “in case any of the necessary elements do not exist”, such as the availability of third-party verifiers for emissions reporting.
The methane regulation could further be reviewed by the Commission in the event of “continued challenges for implementation or a threat to the security of supply”.
Darragh O’Brien, Ireland’s climate and energy minister, said on behalf of the EU’s Irish presidency that member states are targeting “an early agreement” with Parliament but did not disclose an explicit deadline.
Market reaction
Several investors have been vocal on the need to maintain the timelines and ambition of the regulation, warning it would cause uncertainty and undermine efforts to tackle emissions.
Daisy Streatfeild, CSO at Ninety One, said the proposed delay “reflects the challenges of implementing new regulation in the current context”, but “stable and predictable policy remains essential to providing companies and investors with the certainty needed to act”.
Eric Pedersen, head of responsible investments at Nordea Asset Management – which engaged on the EU regulation extensively – said it was “very positive” that the Council supported limiting the delay to one year.
“Having said that, it is crucial that any new reviews in 2027 and 2028 do not become a mechanism for further delays, and that the Commission is able to verify that the specified technical preconditions are in place in time to avoid further delays,” he added.
For Michael Button, senior policy specialist at the Institutional Investors Group on Climate Change (IIGCC), the Council’s support for a shorter postponement is an encouraging signal that ministers recognise the need to limit disruption.
“A longer delay would not eliminate the work required to comply, but instead postpone investment in stronger data and verification, and make it harder to distinguish between the organisations acting promptly and those waiting for the rules to move again,” he said.
IIGCC has coordinated multiple iterations of an investor letter calling on policymakers to maintain and implement the regulation “as adopted” – including its timeline and core provisions.