By Kate Abnett
May 6 (Reuters) – The European Commission has drafted plans to let oil and gas companies avoid penalties for breaching the EU’s methane emissions law, a draft document seen by Reuters showed, after pressure from industry and the United States government.
The move follows calls from oil and gas industry groups to pause the law, warning it could disrupt EU fuel imports when tougher provisions kick in from 2027. The U.S. government has also demanded the EU exempt U.S. oil and gas from the rules.
In draft guidance to EU countries’ national authorities, seen by Reuters, the Commission said countries could choose not to enforce penalties for breaching the rules during an energy supply crisis.
“Sanctioning should be delayed until the situation is stable and resumed if the infringement persists and the risk to the security of supply is no longer present,” the document said.
Companies could also be let off the law’s penalties even if there is no supply crisis, but it is deemed that enforcing the penalties would endanger energy supplies, the document said.
Oil and gas prices have surged in response to the Iran war, adding short-term pressure on governments to secure energy supplies.
The EU methane law requires that, from January 2027, imported gas must comply with monitoring and verification rules equivalent to Europe’s. Penalties for breaching the law include fines up to 20% of a company’s annual turnover.
Those terms have met strong pushback from the U.S. government. The U.S. has become the EU’s biggest supplier of liquefied natural gas, as the bloc races to replace Russian gas.
The draft Commission guidelines would not change the law, but rather give national authorities more leeway in how they enforce it.
Environmental campaigners warned the move would undermine the law’s ability to steer investments in curbing emissions.
“If companies conclude that non-compliance carries little or no consequence, investment and behavior shift in the wrong direction,” said Lea Pilsner, a director at Environmental Defense Fund Europe.
Methane is a potent greenhouse gas and the second-biggest cause of climate change after carbon dioxide emissions.
Reducing methane emissions has been singled out by organisations including the International Energy Agency as one of the quickest and most cost-effective ways to curb climate change.
A Commission spokesperson declined to comment on the document, which was reported earlier on Wednesday by Politico.
(Reporting by Chandni Shah in Bengaluru; Editing by Daniel Wallis)