COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the Proposal for a Regulation of the European Parliament and of the Council on methane emissions reduction in the energy sector and amending Regulation (EU) 2019/942
Date: 2021-12-15
Institutions: Directorate-General for Energy, European Commission
Subjects: EU energy policy, coal industry, gas, greenhouse gas, hydrocarbon, import (EU), oil industry, reduction of gas emissions

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.12.2021  SWD(2021) 459 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Accompanying the Proposal for a Regulation of the European Parliament and of the Council on methane emissions reduction in the energy sector and amending Regulation (EU) 2019/942 {COM(2021) 805 final} - {SEC(2021) 432 final} - {SWD(2021) 460 final}  
 
 
Table of Contents 

1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ..................................... 4 

2.  PROBLEM DEFINITION .......................................................................................... 6 

  What are the problems? ..................................................................................... 6 
  What are the problem drivers? ........................................................................ 11 
  How will the problem evolve? ........................................................................ 30 

3.  WHY SHOULD THE EU ACT? .............................................................................. 36 

  Legal basis ....................................................................................................... 36 
  Subsidiarity: Necessity of EU action ............................................................... 36 
  Subsidiarity: Added value of EU action .......................................................... 37 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ..................................................... 38 

  General objectives ........................................................................................... 38 
  Specific objectives ........................................................................................... 38 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? .......................................... 39 

  What is the baseline from which options are assessed? .................................. 39 
  Description of the policy options .................................................................... 40 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ................................. 48 

  Policy  area  1:    Improving  measuring  and  reporting  of  methane 

emissions in the EU ......................................................................................... 49 
6.2  Policy area 2 - Mitigation of methane emissions in the EU ............................ 56 
6.3  Policy  area  3  –  Measuring,  reporting  and  mitigating  methane 
emissions linked to EU fossil fuel consumption but occurring outside 
the EU .............................................................................................................. 75 

7.  HOW DO THE OPTIONS COMPARE? .................................................................. 84 

8.  PREFERRED OPTION ............................................................................................. 87 

9.  HOW  WILL  ACTUAL 

IMPACTS  BE  MONITORED  AND 

EVALUATED? ......................................................................................................... 89 

ANNEX 1: PROCEDURAL INFORMATION ................................................................ 92 

ANNEX 2: STAKEHOLDER CONSULTATION ......................................................... 101 

ANNEX 3: LIST OF ACTIONS IN THE METHANE STRATEGY ............................. 114 

ANNEX 4: ANALYTICAL METHODS ........................................................................ 117 

ANNEX 5: WHO IS AFFECTED AND HOW? ............................................................. 122 

ANNEX 6: NOTE ON LINKAGES................................................................................ 140 

ANNEX  7:  METHANE  EMISSIONS  DATA  FROM  GREENHOUSE  GAS 

INVENTORIES ....................................................................................................... 145 

ANNEX 8: DISCARDED OPTION ............................................................................... 149 

 
 
 
Glossary 

Term or acronym 

Meaning or definition 

AMM 

BAU 

CCAC 

CEER 

CH4 

CMM 

CTP 

DSO 

E-PRTR 

ESR 

EU 

GAINS  

GHG 

IA 

IEA 

IED 

IMEO 

IPCC 

IPIECA 

KT 

LDAR 

LNG 

MRV 

MSI 

OPC 

UNEP 

VAM 

WTO 

Abandoned mine methane 

Business as usual 

Climate and Clean Air Coalition 

Council of European Energy Regulators 

Methane 

Coalmine methane 

Climate Target Plan 

Distribution System Operator 

European Pollutant Release and Transfer Register 

Effort Sharing Regulation 

European Union 

Greenhouse Gas - Air Pollution Interactions and Synergies model 

Greenhouse gases 

Impact assessment 

International Energy Agency 

Industrial Emissions Directive 

International Methane Emissions Observatory 

Intergovernmental Panel on Climate Change 

International Petroleum Industry Environmental Conservation 
Association 

Kiloton 

Leak Detection and Repair 

Liquefied Natural Gas 

Measurement, Reporting, and Verification 

Methane Supply Index 

Open Public Consultation 

United Nations Environmental Programme 

Ventilation air methane 

World Trade Organization 

2 / 148 

 
 
 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

The European Green Deal puts the EU on a path to climate neutrality by 2050 through 
the deep decarbonisation of all sectors of the economy, in line with the Paris Agreement 
goal of keeping global temperature increases well below 2°C and pursuing efforts to limit 
the increase to 1.5°C. The Regulation establishing the framework for achieving climate 
neutrality  (‘European  Climate  Law’)  made  the  EU’s  climate  neutrality  target  by  2050 
legally  binding,  and  raised  the  2030  ambition,  requiring  a  domestic  reduction  of  net 
greenhouse  gas  emissions  (emissions  after  deduction  of  removals)  by  at  least  55% 
compared  to  1990  levels  by  20301.  To  this  end,  the  Commission  is  focusing  on 
overhauling the relevant climate and energy legislation to align with the target set out in 
the Climate Target Plan2 to reduce greenhouse gas (GHG) emissions by at least 55% by 
2030 compared to 1990 levels. While much of the focus of the public discussion has so 
far  been  on  carbon  dioxide  emissions,  short-lived  GHGs  such  as  methane  contribute 
significantly  to  overall  GHG  emissions.  This  contribution  is  receiving  increasing 
attention,  as  recognised 
the 
Intergovernmental Panel on Climate Change, which finds that global warming could be 
limited by “strong, rapid and sustained reductions in CH4 emissions”3. 

the  Sixth  Physical  Science  Basis  Report  of 

in 

The 2030 Climate Target Plan (CTP) has highlighted methane emissions abatement as a 
cost-effective  way  of  cutting  GHG  emissions  in  the  EU.  All  2030  CTP  and  Fit  for  55 
mitigation scenarios achieving at least 55% GHG reductions4 include abatement potential 
for EU methane emissions at low costs. The CTP IA further indicates that a significant 
part of such reductions stems from the energy system, and this is also further recognised 
by stakeholders and by international studies5,6. 
The European Green Deal Communication7 indicates that the decarbonisation of the gas 
sector  will  be  facilitated,  including  by  addressing  the  issue  of  energy-related  methane 
emissions. It also calls on the EU to engage with third countries on cross-cutting climate 
and  environment  issues,  including  via  action  to  reduce  methane  emissions.  In  addition, 
and  in  response  to  the  request  expressed  in  Regulation  (EU)  2018/1999  on  the 
Governance of the Energy Union and Climate Action (the Governance Regulation)8, the 

1 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing 
the  framework  for  achieving  climate  neutrality  and  amending  Regulations  (EC)  No  401/2009  and  (EU) 
2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1). 
2  See  EU  2030  Climate  Target  Plan  Impact  Assessment,  https://ec.europa.eu/clima/policies/eu-climate-
action/2030_ctp_en  
3 IPCC (2021) Sixth Assessment Report - Climate Change 2021: The Physical Science Basis, p.21.  
https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_Full_Report.pdf  
4 REG, MIX, CPRICE 
5 IEA (2021) Methane Emissions from Oil and Gas, https://www.iea.org/reports/methane-emissions-from-
oil-and-gas  
6  Climate  and  Clean  Air  Coalition  &  United  Nations  Environment  Programme  (2021)  Global  Methane 
Assessment, 
https://www.unep.org/resources/report/global-methane-assessment-benefits-and-costs-
mitigating-methane-emissions  
7 COM(2019) 640 final. 
8 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the 
Governance of the Energy Union and Climate Action, http://data.europa.eu/eli/reg/2018/1999/oj 

3 / 148 

 
 
                                                           
Commission  adopted  an  EU  strategy  to  reduce  methane  emissions  (‘the  Methane 
Strategy’) in October 20209.  

The  Methane  Strategy  announces  a  list  of  17  actions  across  the  agriculture,  waste  and 
wastewater,  and  energy  sectors,  as  well  as  seven  international  actions10.  See  Box  1  for 
those most relevant to this initiative. 

Box 1. Relevant actions in the methane strategy  

  The Commission will deliver legislative proposals in 2021 on: 

o  Compulsory  measurement,  reporting,  and  verification  (MRV)  for  all  energy-
related methane emissions, building on the Oil  and Gas  Methane Partnership 
(OGMP 2.0) methodology11. 

o  Obligation to improve leak detection and repair (LDAR) of leaks on all fossil 
gas infrastructure, as well as any other infrastructure that produces, transports 
or uses fossil gas, including as a feedstock. 

  The Commission  will consider legislation on eliminating routine venting and flaring 

in the energy sector covering the full supply chain, up to the point of production. 

  As  part  of  the  EU’s  diplomatic  and  external  relations  action,  the  Commission  will 
address methane emission reductions in all relevant sectors with partner countries and 
promote global coordination of efforts to address energy-sector methane emissions. 
  The  Commission  will  support  the  establishment  of  a  detection-and-alert  process  for 
methane  super-emitters  using  EU  satellite  capability,  and  share  this  information 
internationally through the foreseen international methane emissions observatory12. 

The  current  context  as  regards  information  on  methane  emissions  in  the  energy  sector 
globally is one of insufficiently precise data in terms of the origin as well as magnitude 
and nature of these emissions. Detailed explanations are provided in the next section why 
that  is  the  case.  As  a  result,  a  key  objective  of  any  targeted  action  to  further  reduce 
methane emissions and to assess the effectiveness of such actions is to start by improving 
the quality of data and information on the sources of methane emissions. This means that 
currently  available  data    and  the  projections  these  are  based  on,  must  be  treated  with 
caution. Improved availability and robustness of data and information can then serve as a 
reliable basis for additional targeted measures to further abate methane in the future. At 
the same time, there are actions that can be taken to curb emissions cost-efficiently that 
do  not  require  precise  data,  as  there  are  a  number  of  best  practice  methane  mitigation 
measures  in  the  energy  sector  which  can  lead  to  effective  and  rapid  reductions  in 

9 COM(2020) 663 final 
10 See Annex 3 for a list of all actions contained in the Methane Strategy 
11 The Oil and Gas Methane Partnership 2.0 (OGMP 2.0) is a voluntary methane measurement and 
reporting standard, which was launched in November 2020. It commits participating companies to 
undertake source-level methane emission measurements and to report them according to specific criteria 
tailored to the realities of oil and gas companies across the supply chain. See further Section 2.3.2. 
http://ogmpartnership.com/  
12 Action 2 of the Methane Strategy: The Commission will support the establishment of an independent 
international methane emissions observatory anchored in the United Nations framework, in cooperation 
with international partners. The observatory would be tasked with collecting, reconciling, verifying and 
publishing anthropogenic methane emissions data at a global level. 

4 / 148 

 
 
 
 
                                                           
methane  emissions  and  which  do  not  rely  on  accurate  quantification  of  methane 
emissions from the outset, such as fixing leaks once they are discovered.   

In this context, this impact assessment analyses the key issues and legislative options to 
address  methane  emissions  in  the  energy  sector.  This  initiative  is  included  in  the 
Commission  work  programme  for  2021  (COM(2020)  690  final)  under  point  g) 
‘Reducing methane emissions in the energy sector’ of the European Green Deal ‘Fit For 
55 Package’.13  

2.  PROBLEM DEFINITION 

  What are the problems? 

Methane  is  a  powerful  greenhouse  gas,  second  only  to  carbon  dioxide  in  its  overall 
contribution  to  climate  change  and  responsible  for  about  one  third  of  current  climate 
warming14. Although it remains in the atmosphere for a shorter period of time than CO2 
(10-12 years compared to hundreds of years), on a molecular level, methane is a far more 
powerful climate forcer (with a GWP of 28 times that of CO2 over 100 years and a GWP 
of  86  over  20  years).  In  addition  to  the  significant  short-term  effect  on  the  climate, 
methane contributes to ozone formation, which is a potent local air pollutant that causes 
serious health problems, before oxidizing into carbon dioxide that continues to trap heat 
and affect the climate for a much longer time-frame. During their 10-12-year atmospheric 
lifetime,  methane  emissions  originating  from  one  country  disperse  and  affect  others, 
causing  -  in  addition  to  their  global  warming  effect  illnesses,  premature  deaths,  and 
losses  in  agricultural  harvests  not  only  at  the  point  of  origin  but  on  a  much  wider 
geographical scope15,16.  

The global mean methane concentration in the atmosphere has risen sharply over the last 
decade.  In  2019,  concentrations  of  methane  were  higher  than  at  any  time  in  at  least 
800,000  years17,  and  2020  exhibited  the  fastest  growth  rate  in  the  37-year  record 
maintained by the National Oceanic and Atmospheric Administration (NOAA)18.  

13 Interlinkages with other relevant EU initiatives are described in Annex 6. 
14  IPCC,  2021:  Summary  for  Policymakers.  In:  Climate  Change  2021:  The  Physical  Science  Basis. 
Contribution  of  Working  Group  I  to  the  Sixth  Assessment  Report  of  the  Intergovernmental  Panel  on 
Climate Change [MassonDelmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Péan, S. Berger, N. Caud, Y. 
Chen,  L.  Goldfarb,  M.I.  Gomis,  M.  Huang,  K.  Leitzell,  E.  Lonnoy,  J.B.R.  Matthews,  T.K.  Maycock,  T. 
Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press. In Press. 
15 Van Dingenen, R., Crippa, M., Janssens-Maenhout, G., Guizzardi, D. and Dentener, F., Global trends of 
methane emissions and their impacts on ozone concentrations, EUR 29394 EN, Publications Office of the 
European Union, Luxembourg, 2018, doi:10.2760/820175, JRC113210.   
16 European Commission COM(2020) 381 final, https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:52020DC0381 
17 IPCC AR6, (2021). IPCC, 2021: WGI Climate Change 2021The Physical Science Basis. WGI Climate 
Change 2021The Physical Science Basis Working Group I contribution to the Sixth Assessment Report of 
the Intergovernmental Panel on Climate Change, p.4110, https://www.ipcc.ch/report/ar6/wg1/  
18 Climate and Clean Air Coalition & United Nations Environment Programme (2021) Global Methane 
Assessment, https://www.unep.org/resources/report/global-methane-assessment-benefits-and-costs-
mitigating-methane-emissions 

5 / 148 

 
 
 
 
                                                           
Correspondingly, reductions in methane emissions can have positive near-term effects in 
reducing the rate of global warming as well as air quality benefits. According to recent 
estimates,  global  methane  emission  reductions  of  45%  by  2030,  based  on  available 
targeted measures and additional  measures  in  line with UN  priority development goals, 
could avoid 0.3°C of global warming by the 2040s19. 

Relevance of the energy sector 

Approximately  40%  of  global  methane  emissions  are  thought  to  come  from  natural 
sources  (biogenic),  like  wetlands  or  wildfires20.  The  remaining  60%  are  anthropogenic, 
of which the largest  sources, based  on  estimations,  are agriculture (around half of  total 
anthropogenic methane emissions) – in particular linked to intensive production – fossil 
fuel production and use (between a fourth and a third), and waste (around a quarter)21.  

In the EU, around half of anthropogenic methane emissions are estimated to come from 
agriculture,  a  quarter  from  waste  and  a  fifth  from  energy22.  This  distribution  across 
sectors  only  takes  into  account  domestic  emissions,  and  given  that  the  EU  currently 
imports  more  than  90%  of  the  fossil  fuels  consumed  in  the  EU23,  would  change 
drastically  if  emissions  occurring  outside  of  EU  borders,  but  associated  with  EU  fossil 
energy  consumption  were  to  be  taken  into  account.  A  large  portion  of  the  methane 
emissions  linked  to  EU  fossil  energy  consumption  is  deemed  to  occur  during  the 
production phase of that energy, as well as along its transmission phase (especially in the 
context of fossil gas) to the EU. Some estimations have been carried out of the magnitude 
of such methane emissions (specifically linked to EU consumption but occurring outside 
the  EU).  One  such  estimation  is  for  fossil  gas  and  it  concludes  that,  depending  on  the 
methodology  employed,  results  can  vary  widely  –  from  an  order  of  magnitude  of 
between  3  to  8  times  the  level  of  methane  emissions  from  the  fossil  gas  value  chain 
occurring within the EU borders24,25. The IEA estimates that in 2020, methane emissions 
associated  with imported  oil and  gas to the EU represented around 9,000 kilotonnes of 

19 Ibid 
20 International Energy Agency (IEA), World Energy Outlook, (2018), 
https://edgar.jrc.ec.europa.eu/overview.php?v=50_GHG. 
21 Note that, while the overall concentration of methane in the atmosphere is a reliable figure, estimates of 
the distribution of emissions across sectors and sources are currently subject to considerable uncertainty 
and should be treated with caution, as further discussed below.  
22 European Environment Agency (EEA), (2018). EEA greenhouse gas - data viewer. 
https://www.eea.europa.eu/ds_resolveuid/f4269fac-662f-4ba0-a416-c25373823292.   
23 European Commission (2021) EU energy in figures, statistical pocketbook and country datasheets  (June 
2021) https://ec.europa.eu/energy/data-analysis/energy-statistical-pocketbook_en 
24  Carbon  Limits.  Value  chain  methane  emissions 
https://www.carbonlimits.no/wp-content/uploads/2020/10/Methane_Value-Chain_Carbon-Limits.pdf  
25 Note that a similar issue is receiving attention through the development of the Imported Flare Gas Index 
by  the  World  Bank,  which  identifies  the  exposure  of  oil  importing  countries  to  flaring  activities  in  the 
source countries. However, the index is specific to primarily the carbon-intensity of imported oil linked to 
flaring  rather  than  methane  emissions.  World  Bank  (2021)  Global  Gas  Flaring  Tracker  Report. 
https://thedocs.worldbank.org/en/doc/1f7221545bf1b7c89b850dd85cb409b0-0400072021/original/WB-
GGFR-Report-Design-05a.pdf  

from  natural  gas 

in  Europe. 

imports 

6 / 148 

 
 
 
                                                           
methane26.  This  compares  to    1,033  kilotonnes  of  methane  emissions  from  oil  and  gas 
estimated to have occurred in 2019 in the EU27. While the share of total global man-made 
methane  emissions  emitted  in  Europe  is  estimated  to  be  around  6%28,  the consumption 
of,  and  import  dependency  for,  fossil  fuels  produced  outside  the  EU  hence  adds 
significant levels of methane emissions that are incurred because of consumption within 
the EU.  

Emissions from the waste sector are covered by existing and upcoming planned reviews 
of  environmental  legislation.  For  the  agriculture  sector,  a  number  of  challenges  are 
addressed  in  the  ‘Farm  to  Fork’  strategy29.  The  energy  sector  currently  offers  the  most 
cost-effective methane emissions savings potential30. 

Emission estimates 

As party to the United Nations Framework Convention on Climate Change (UNFCCC) 
and the Paris Agreement, the Union is required to provide annually an inventory report of 
anthropogenic greenhouse gas emissions constituting an aggregate of the member States 
national  greenhouse  gas  inventories,  prepared  using  good  practice  methodologies 
accepted by the Intergovernmental Panel on Climate Change (IPCC).. The EU emissions 
data  used  in  this  report  are  taken  from  that  EU  inventory  report,  which  represents  a 
compilation  of  national  inventories,  based  on  the  emissions  reported  by  EU  Member 
States  under  the  EU  Climate  Monitoring  Mechanism  Regulation31,  followed  by  the 
integrated  reporting system  of the Governance Regulation. The Governance  Regulation 
requires Member States to establish national inventory systems to estimate anthropogenic 
emissions of GHGs and to report their national projections. This reporting is done using 
IPCC guidelines, and is often based on default emission factors rather than direct source-
level  measurements,  implying  uncertainties  regarding  the  precise  origin,  frequency  and 
magnitude  of  emissions  and  was  deemed  to  be  significantly  underestimated  by  certain 
studies32, see further section 2.2.1. 

IEA:  

fuel 

from 

fossil 

(2021), 

methane 

European 

emisisons 

Curtailing 

operations 

COM(2020) 

Commission 

26 
https://iea.blob.core.windows.net/assets/585b901a-e7d2-4bca-b477-
e1baa14dde5c/CurtailingMethaneEmissionsfromFossilFuelOperations.pdf 
27 EU 2021 GHG inventory (2019 data).   
28 Van Dingenen, R., Crippa, M., Janssens-Maenhout, G., Guizzardi, D. and Dentener, F., Global trends of 
methane emissions and their impacts on ozone concentrations, EUR 29394 EN, Publications Office of the 
European Union, Luxembourg, 2018, ISBN 978-92-79-96550-0, doi:10.2760/820175, JRC113210. 
29 
content/EN/TXT/?uri=CELEX:52020DC0381  
30 Climate Target Plan Impact Assessment 
31 Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a 
mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at 
national and Union level relevant to climate change and repealing Decision No 280/2004. https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32013R0525  
32  As  the  Clean  Air  Task  Force  outlines  in  its  Report  on  Benchmarking  Methane  and  Other  GHG 
Emissions of Oil & Natural Gas Production in the United State (2021, p.8): “Default emission factors do 
not  represent  actual  emissions.  The  use  of  emission  factors  to  estimate  total  emissions  relies  on  the 
emissions  factor  being  representative  of  average  emissions  for  a  given  activity.  This  approach  can  be 
effective where there is robust data on emissions per unit of activity. For example, automobile emissions 
are  routinely  and  reliably  estimated  using  emission  factors  despite  the  fact  that  emissions  from  a  single 
vehicle may be different than predicted by an emission factor. With a diversity of emission sources and the 

https://eur-lex.europa.eu/legal-

final, 

381 

7 / 148 

 
 
 
                                                           
 
In the most recent EU GHG inventory submission to UNFCCC33, methane emissions in 
the EU energy sector are estimated at 3.1 million tonnes (see Annex 7 for more detailed 
data)34.   

Table 1: Split of energy-related methane emissions per sub-sector in the EU as reported 
to the UNFCCC in the April 2021 GHG Inventory Submissions (2019 data)   

EU energy-related CH4 emissions 

Category 

Incomplete combustion of fuels 

Coal  

Leaks from oil 

Leaks from fossil gas 

Venting and flaring from oil 

Venting and flaring from fossil gas 

Biogas  

Other  

Total 

Kt 
CH4 

974 

1002 

44 

847 

118 

24 

75 

32 

Share 

31% 

32% 

1% 

27% 

4% 

1% 

2% 

1% 

3116 

100% 

A  distinction  is  made  throughout  this  document  between  direct  emissions,  which  are 
caused  directly  by  an  organisation’s  activity,  and  indirect  emissions  from  incomplete 
combustion  (see  Figure  1).  Direct  emissions  can  be  either  fugitive/unintentional,  e.g. 
from  leaks,  or  intentional.  The  latter  are  either  from  venting,  flaring  (which  always 
releases an amount of unburnt gas in form of methane slip), or from the normal operation 
of machinery. Indirect methane emissions occur when oil, fossil gas or coal are used or 
processed in the production of other products or used as fuels and incomplete combustion 
occurs.  Incomplete  combustion  represents  almost  a  third  of  estimated  energy  sector 
related methane emissions in the EU.  

presence of low frequency, high emission events, the use of emission factors is significantly less reliable in 
the oil and gas sector, and typically underestimates actual emissions […].” 
33  As  party  to  the  Paris  Agreement  of  the  United  Nations  Framework  Convention  on  Climate  Change 
(UNFCCC), the EU is required to provide annually an inventory report of anthropogenic greenhouse gas 
emissions within its territory. 
34 April 2021 EU GHG Inventory Submission to  UNFCCC (2019 data)   

8 / 148 

 
 
 
 
 
                                                                                                                                                                            
EU energy-related methane emissions

Direct emissions
69%

Coal - abandoned
8%

Leaks from oil
1%

Coal - active
24%

Other 
1%

Biogas 
2%

Venting and flaring from 
fossil gas
1%

Leaks from fossil gas
27%
Venting and flaring from 
oil
4%

Incomplete combustion 
of fuels
31%

Figure  1:  Split  of  energy-related  methane  emissions  in  the  EU  as  reported  to  the 
UNFCCC in the April 2021 GHG Inventory Submissions (2019 data) 

Based on the estimates contained in the 2021 GHG Inventory Submissions and keeping 
the limitations of this data in mind, more than half of the around 70% of all direct energy 
sector emissions within the EU is estimated to come from unintentional releases35. Coal 
mining is estimated to be responsible  for 32% of EU energy sector methane emissions, 
composed  of  24  percentage  points  (pp)  from  ongoing  mining  activities  (which  are 
intentional emissions) and 8pp from abandoned mines. Fossil gas represents 28% of the 
methane  emissions,  of  which  27pp  are  estimated  to  be  from  leaks  and  1pp  from 
intentional  emissions  of  methane  into  the  atmosphere.  For  oil,  leaks  represent  1%  of 
overall  estimated  energy  emissions,  and  intentional  releases  another  1%.  A  split  of 
reported fugitive emissions by Member States and reporting category per fuel is available 
in Appendix 6. The data further highlights the generally high share of fugitive methane 
emissions among total reported energy sector emissions across most Member States (see 
Figure 2). 

35  70%  of  total  methane  emissions  in  the  energy  sector  are  estimated  to  stem  from  direct  emissions.  27 
percentage  points  (pp)  come  from  leaks  from  fossil  gas,  1pp  from  leaks  from  fossil  oil,  and  8pp  from 
abandoned  coal  mines,  providing  a  total  of  38pp  of  total methane  emissions,  and  just  over  half  of  direct 
emissions (see Table 1 and Section 2.1 Emission estimates). 

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100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

T
U
A

L
E
B

R
G
B

P
Y
C

E
Z
C

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Figure 2: Share of fugitive methane emissions in total energy sector methane emissions 
as reported in the 2021 GHG inventories submitted to UNFCCC (2019 data) 
Note: Includes fugitive emissions from coal, oil, natural gas, venting and flaring, and 
other emissions from energy production 

  What are the problem drivers? 

Reductions  of  methane  emissions  in  the  energy  sector  are  hindered  by  the  following 
challenges and problem drivers, which will be discussed below:  

1)  A lack of precise information on emission sources and quantities.  

2)  Lack  of  sufficient  incentives  to  mitigate  planned  and  unplanned  methane 

emissions. 

3)  Lack  of  information  on  and  mitigation  of  methane  emissions  occurring  outside 

the EU but linked to consumption of fossil energy in the EU. 

The first two problem drivers specifically  address the situation with respect to methane 
emissions within the EU, while the third driver describes the mechanisms hindering the 
reduction of emissions linked to EU imports. 

2.2.1. No precise information on emission sources and quantities  

Whereas  CO2  emissions  typically  occur  during  the  combustion  of  fuels  or  during 
industrial  processes  at  well-identified  points  -  thus  with  clear  emission  sources  and 
comparably straight forward measurement options - methane emissions are often diffuse, 
can occur along the entire supply chain, and are as a result more difficult to measure and 
accurately quantify, leading to substantial uncertainty about current emissions levels. 

10 / 148 

 
 
 
 
 
The lack of availability of precise data and identification of the magnitude of the various 
sources  of  emissions  is  the  key  challenge  to  the  abatement  of  those  emissions.  Current 
means of methane emission quantification are primarily based on estimation rather than 
direct  measurement  and  are  fragmented  across  sectors  and  Member  States.  When 
operators  do  not  have  precise  knowledge  on  their  emissions,  e.g.  in  the  case  of 
unintentional  fugitive  emissions  through  leaks,  action  to  mitigate  such  emissions  is 
commonly driven principally by safety considerations. The lack of an accurate data basis 
hinders the development and implementation of measures for the mitigation of methane 
emissions in the energy sector. This is widely recognised among experts, and it is a key 
premise of the voluntary Oil and Gas Methane Partnership on measuring and reporting of 
methane emissions by companies (see further Section 2.3.2).  

A lack of information also implies limited possibilities for competent authorities and civil 
society to engage with the issue. Especially in the case of intentional releases of methane 
emissions, a lack of data accessibility adds a problem of information asymmetry between 
polluters  and  society.  With  technological  improvements  over  recent  years,  such  as 
increasing satellite observation capacities and availability of specialised cameras, recent 
international studies by commercial companies, NGOs and academia have identified and 
brought  to  public  attention  significant  emission  events  and  super-emitters  around  the 
globe36, as well as highlighted substantial discrepancies between reported  and observed 
emissions37.  

Country  data  reported  pursuant  to  UNFCCC  Reporting  Guidelines  is  submitted  to  the 
UNFCCC secretariat according to different tiers of reporting, and it is recommended to 
use  higher  tier  levels  of  accuracy  for  estimating  emission  sources  that  have  a  large 
contribution to total emissions in a country (e.g. those sources falling within 95% of total 
emissions).  A  tier  represents  a  level  of  methodological  complexity.  Three  tiers  are 

36 For EU infrastructure, recent observations made by the Clean Air Task Force using optical gas imaging 
cameras identified a number of leaks at sites across multiple Member States, see https://cutmethane.eu/ and 
related  news  coverage,  e.g.:    Reuters  (24  June  2021)  Gas  infrastructure  across  Europe  leaking  planet-
warming  methane,  https://www.reuters.com/business/environment/exclusive-gas-infrastructure-across-
europe-leaking-planet-warming-methane-video-2021-06-24/;  Der  Standard  (26  August  2021)  OMV 
remains under attack over methane leaks in Romania / OMV bleibt wegen Methanlecks in Rumänien unter 
Beschuss. https://www.derstandard.at/story/2000129170336/omv-bleibt-wegen-methanlecks-in-rumaenien-
weiter-unter-beschuss  
For a recent analysis of super-emitting events see: Lauvaux, T., Giron, C., Mazzolini, M., d'Aspremont, A., 
Duren,  R.,  Cusworth,  D.,  Shindell,  D.  and  Ciais,  P.,  2021.  Global  Assessment  of  Oil  and  Gas  Methane 
Ultra-Emitters; T.. arXiv preprint arXiv:2105.06387, https://arxiv.org/abs/2105.06387..  
For recent press-coverage of leaks identified by satellites see, e.g., Bloomberg/Clark, A. & Khrennikova, 
D.  (18  June  2021)  Huge  Methane  Leak  Spotted  by  Satellite  Came  From  Gazprom  Pipeline, 
https://www.bloomberg.com/news/articles/2021-06-18/gazprom-admits-to-massive-methane-leaks; 
Reuters/Nasralla,  S.  (26  June  2020)  Satellites  reveal  major  new  gas  industry  methane  leaks, 
https://www.reuters.com/article/us-climatechange-methane-satellites-insi/satellites-reveal-major-new-gas-
industry-methane-leaks-idINKBN23W3K4.https://www.reuters.com/article/us-climatechange-methane-
satellites-insi/satellites-reveal-major-new-gas-industry-methane-leaks-idINKBN23W3K4. 
37 Research carried out on behalf of the Environmental Defence Fund between 2012 and 2018 shows actual 
emissions in the US oil and gas supply chain to be around 60% higher than those reported to the US EPA, 
see  Alvarez  et  al.  (2021)  Assessment  of  methane  emissions  from  the  U.S.  oil  and  gas  supply  chain. 
Science, 13 Jul 2018: Vol. 361, Issue 6398, pp. 186-188.  

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available  (see  box).  Progressing  from  tier  1  to  tier  3  represents  an  increase  in  the 
certainty of methane estimates38.  

Box 2. UNFCCC GHG emissions reporting tiers (UNFCCC Resource Guide)39 

Different methods can be used to estimate emissions or removals from most source and 
sink categories. The selection of a particular method will depend on the desired degree of 
estimation detail, the availability of activity data and emission factors, and the financial 
and  human  resources  available  to  complete  the  inventory.  In  IPCC  terminology,  the 
lowest ranking or simplest method is “Tier 1”, while more elaborate methods are “Tier 2” 
and “Tier 3.” 

technology-specific, 

Tier 1 methods typically utilise IPCC default emission factors and require the most basic, 
and least disaggregated, activity data. Higher tiers usually utilise more elaborate methods 
and  source-specific, 
region-specific  and/or  country-specific 
emission  factors,  which  are  often  based  on  measurements,  and  normally  require  more 
highly  disaggregated  activity  data.  Tier  2  and  3  methods  require  more  detailed  data 
and/or measurements for their application.  Specifically, tier 2 requires country-specific, 
instead of default, emission factors to be used while tier 3 requires plant-by-plant data or 
measurements  and  comprises  the  application  of  a  rigorous  bottom-up  assessment  by 
source type at the individual facility level. In cases where a national methodology exists, 
which is consistent with the  IPCC Guidelines, it is highly advisable to use the national 
methodology.  This methodology should be fully documented in order to allow the reader 
to understand why this particular method is better than the default one proposed by the 
IPCC. 

to  report  direct  source-level 
There  are  however  no  mandatory  requirements 
measurements  as part of the national inventories reporting requirements. The UNFCCC 
does not require their submission, as reporting at tier 2 level for large emission sources is 
in  line  with  IPCC  guidelines  as  tier  2  is  considered  a  higher  tier  method.  Estimation 
methodologies and  reporting of methane emissions hence varies across  Member  States, 
and a significant share of methane emissions in the EU energy sector, i.e. those estimated 
using  default  methods,  are  arguably  less  accurate  than  other  emission  categories 
estimated using higher tier methods40. The use of default emission factors means that the 
estimated emissions are less representative of national circumstances, and therefore less 
accurate, and may for each specific case underestimate or overestimate actual emissions 
for those categories. Note that the uncertainty about the size and direction of bias in the 

38  IPCC  (2019)  2019  Refinement  to  the  2006  IPCC  guidelines  for  national  greenhouse  gas  inventories, 
https://www.ipcc.ch/site/assets/uploads/2019/12/19R_V0_01_Overview.pdf  
39 UNFCCC (2009) Resource Guide for preparing the National Communications of Non-Annex I Parties – 
Module 3 National Greenhouse Gas Inventories, 
https://unfccc.int/resource/docs/publications/09_resource_guide3.pdf 
40 The Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy 
Regulators (CEER) submitted a survey among their members as informal contribution to the open public 
consultation, expressing the view that “NRAs broadly support an EU-level harmonised approach to 
methane emissions monitoring and detection, based in particular on mandatory monitoring of methane 
emissions.”  

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estimation  of  emissions  from  specific  sources  using  emission  factors  makes  any 
correlation between the use of methodology and accuracy of reported emissions difficult.  

  For coal mining, most Member States report their methane emissions at tier 1 or 
tier  2  levels.  While  a  few  Member  States’  reporting  for  operating  mines  is  also 
done  at  level  3,  this  is  not  the  case  for  emissions  from  non-operating  or 
abandoned mines, all emissions for which are either estimated using tier 1 or tier 
2 methodologies. 

  For  fugitive  emissions  from  the  gas  sector,  the  large  majority  comes  from  gas 
transmission,  distribution  or  storage,  and  methane  emissions  estimation 
approaches  in  those  sub-sectors  vary  greatly  among  Member  States.  For 
transmission  and  storage,  a  few  Member  States  use  very  detailed  tier  2  or  3 
approaches  (Belgium,  Germany,  Finland,  Latvia,  the  Netherlands,  Austria,  and 
Sweden)  and  others  (eleven  Member  States)  use  only  a  tier  1  approach.  For 
distribution, almost half of Member States use a tier 1 approach or do not report 
methane  emissions  from  this  source.  Other  Member  States  use  approaches  that 
are more detailed, although the most commonly used is the tier 2 approach. 

  For oil emissions, the largest source of which is from production and processing, 
the  majority  of  EU  countries  apply  a  tier  1  method  for  estimating  methane 
emissions41. 

For  methane  emissions  occurring  outside  of  the  EU  but  specifically  linked  to  fossil 
energy  consumed  in  the  EU,  not  all  countries  exporting  fossil  fuels  to  the  EU  submit 
inventories to the UNFCCC (see further Section 2.2.3), and for those that do, data quality 
is  dependent  on  the  methodologies  used.  Data  is  also  not  disaggregated  according  to 
domestic use and exports in the greenhouse gas inventories submitted to UNFCCC. The 
consequence is that there is no precise knowledge, nor any robust estimations, of either 
the magnitude, origin or nature of methane emissions resulting from EU consumption but 
occurring outside the EU territory. 

2.2.2.  Lack  of  sufficient  incentives  to  mitigate  planned  and  unplanned 

methane emissions. 

The  lack  of  accurate  information  on  the  extent  and  the  sources  of  emissions  are  a 
significant  barrier  to  public  and  private  business  awareness  of  the  origin  and  effects  of 
methane  emissions  and  to  tackling  them.  Furthermore,  there  is  a  substantial  market 
failure in the form of negative externalities associated with methane emissions not being 
fully  internalised  by  polluters,  but  costs  accruing  to  societies  at  large  in  coping  with 
climate  warming  effects  as  well  as  direct  health  and  economic  impacts.  Section  6  will 
provide further details on the significant difference between the relatively low costs of a 
large  share  of  methane  emission  abatement  possible  via  specific  measures  in  the  sub-
sectors included in the scope of this report and the costs to society of methane emissions. 
The  resulting  lack  of  information  may  equally  imply  a  lack  of  awareness  by  polluters 
themselves, leading to inefficient allocation of resources from the point of view of GHG 
emission abatement.  

41 See national greenhouse gas inventories submitted to UNFCCC 

13 / 148 

 
 
 
                                                           
Even in cases when operators have good awareness of their emissions, the market failure 
of  a  lack  of  internalisation  of  the  costs  of  the  environmental  externalities  impedes 
incentives for operators to address the issues.  

Operators  have  two  principal  incentives  to  curb  methane  emissions:  first,  methane  has 
heating  and  energetic,  and  therefore  economic,  value;  second,  methane  is  extremely 
flammable  and  may  explode  if  it  comes  into  contact  with  a  heat  source.  These 
characteristics explain why, traditionally, the choice of abatement of methane emissions 
in the energy sector has been the result of net cost/risk trade-offs42, without taking much 
else into consideration. As long as environmental considerations are not given sufficient 
relevance in this trade-off due to a lack of internalisation of the costs of the externalities 
of methane emissions, even cost-effective abatement measures may not be undertaken if 
other investments are prioritised for private returns.   

However,  even  if  economic  considerations  are  a  key  factor  in  the  decisions  taken  by 
operators  to  abate  their  methane  emissions,  there  may  be  reasons  why  they  do  not 
undertake all the abatement that is cost effective from their perspective, even if they have 
that information.  Operators may choose to abate only the emissions that are necessary to 
avoid  for  safety  considerations,  allowing  other  methane  emissions  to  continue  even  if 
they  would  be  cost  effective  to  abate.  This  might  be  due  to  the  fact  that  even  cost 
effective  abatement will  require  upfront investment, while returns  will accrue  at a  later 
stage.  Operators  may  consider  that  if  risk  to  safety  is  low,  such  investments  should  be 
expanded  elsewhere,  on  other  projects  which  are  also  cost  effective.  In  such  cases, 
operators will typically base their abatement decisions, taking into account risk to safety, 
on  the  size  of  methane  losses.  Small  losses,  such  as  from  small  leaks,  might  not  be 
repaired even if this could be done at low cost. This might well be sub-optimal from an 
environmental  perspective,  as  small  losses  might  amount  to  large  losses  over  a  certain 
period of time.  Indeed, as long as environmental considerations are not given sufficient 
relevance  in  the  above  trade-off  due  to  a  lack  of  internalisation  of  the  costs  of  the 
externalities  of  methane  emissions,  even  cost-effective  abatement  measures  are  not 
undertaken  if  other  investments  are  prioritised  instead.    As  projections  of  methane 
emission  reductions  in  the  EU  energy  sector  reveal  (more  details  in  section  6.2),  a 
business  as  usual  scenario  will  not  achieve  all  possible  economically  or 
socially/environmentally  cost  effective  abatement,  and  large  amounts  of  additional 
methane emission abatement (on top of the baseline) are possible in the sectors included 
in  the  scope  of  this  report,  a  significant  share  of  which  can  be  achieved  at  negative  to 
zero net costs43.  

42  This  trade-off  only  incentivises  emission  mitigation  where  it  poses  a  safety  risk  or  creates  sufficient 
direct economic benefit to the operator, i.e. when the value of the saved saleable gas clearly outweighs the 
costs of intervention. However, such benefits are subject to the perceptions and focus of the operator, as for 
instance  seen  in  the  venting  or  flaring  of  associated  gas  in  oil  production,  where  it  may  be  considered  a 
waste product rather than a valuable commodity.  
43  See  Section  6.2.1  for  further  details  and  definitions  of  cost-effectiveness.  Note  that  measures  that  are 
cost-effective  from  a  societal  point  of  view  may  not  be  cost-effective  for  a  company,  in  line  with  the 
market  failure  caused  by  the  externalities  of  methane  emissions.  However,  even  measures  that  would  be 
cost-effective from a company perspective may not be undertaken due to a lack of awareness of emissions 
and  their  associated  costs,  or  due  to  the  allocation  of  scarce  resources  to  potentially  more  profitable 
investments. 

14 / 148 

 
 
                                                           
In addition, operators have different approaches to assessing safety risk, especially in the 
case  of  inexistent  or  non-prescriptive  national  regulations44.  Safety  risk  needs  to  be 
properly  considered  in  any  measures  to  be  adopted  with  the  aim  to  further  reduce 
methane  emissions  in  the  energy  sector,  not  only  to  ensure  a  homogenous  approach 
among  operators  but  also  to  ensure  that  such  measures  do  not  lead  to  unintended 
consequences  with  regards  to  safety.  This  is  something  which  is  considered  in  further 
detail in section 5.2.3 where the approach taken in the options which include measures on 
leak detection and repair and on venting and flaring are described in detail. 

Independent  of  the  continued  consumption  of  fossil  energy  carriers  in  the  coming 
decades  (see  Section  5.1),  the  need  for  methane  emission  monitoring  and  abatement  is 
also  required  once  production  has  halted.  For  the  coal  sector  in  particular,  methane 
emissions remain an important issue once mining operations are terminated, as mines can 
continue to emit methane for decades after operations have stopped45. Similar concerns 
surround  non-operating  oil  and  gas  production  sites,  e.g.  in  the  case  of  abandoned 
boreholes and well-heads46.  

Methane  emissions  are  included  in  the  scope  of  the  union  greenhouse  gas  reduction 
targets for 2030 set out in the European Climate Law47 and the binding national emission 
reduction  targets  under  Regulation  (EU)  2018/84248.  However,  there  is  currently  no 
Union level legal framework setting out specific measures for the reduction of methane 
emissions  occurring  at  the  level  of  upstream  oil  and  fossil  gas  exploration  and 
production, fossil  gas  gathering  and  processing, transmission,  distribution, underground 
storage  and  liquid  fossil  gas  (LNG)  terminals,  operating  underground  and  surface 
coalmines, closed  and abandoned underground coal mines.  More specifically  (see also 
Table 2): 

  The  EU  Emissions  Trading  System  (EU  ETS)  does  not  presently  regulate 
methane-emitting  activities  due  to  their  diffuse  nature  and  the  associated 
challenges of monitoring and reporting of leakage at individual installation level. 

44  For  more  details  on  national  regulations,  see  sections  2.2.2.1  and  2.2.2.2  below.  As  regards  different 
approaches taken on safety risk, the GIE MARCOGAZ survey referenced in section 2.2.2.1 revealed for 
instance that among the national requirements in place in the EU, the frequency of LDAR surveys and of 
leak quantification varied significantly, and that the approach taken in terms of required time to repair leaks 
aslo  varies  significantly.  In  addition,  annex  V  of  the  GIE  MARCOGAZ  report  to  the  June  2019  Madrid 
Forum (Potential ways the gas industry can contribute to the reduction of methane emissions, June 2019), 
on  the  LDAR  practices  of  gas  operators  in  the  EU  reveals  that    the  frequency  of  monitoring  leaks  in 
ditribution systems varies significantly in the EU depending on leak factors, which are also different from 
one EU Member State to another. 
45  N.  Kholod  et  al  (2020)  Global  methane  emissions  from  coal  mining  to  continue  growing  even  with 
declining coal production, Journal of Cleaner Production, Volume 256, 120489 
46  UNEP  &  CCAC  (2021)  Global  Methane  Assessment,  p.20&p.91.  See  also  press  reporting  about 
emissions from abandoned sites, e.g. in the US: https://www.reuters.com/article/us-usa-drilling-abandoned-
specialreport-idUSKBN23N1NL  
47  
Regulation  (EU)  2021/1119  of  the  European  Parliament  and  of  the  Council  of  30  June  2021 
establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 
and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021). 
48  
Regulation  (EU)  2018/842  of  the  European  Parliament  and  of  the  Council  of  30  May  2018  on 
binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to 
climate  action  to  meet  commitments  under  the  Paris  Agreement  and  amending  Regulation  (EU)  No 
525/2013 (OJ L 156, 19.6.2018). 

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This  is  a  necessary  requirement  before  methane-emitting  activities  could  be 
included in the EU ETS. 

  Methane  is  included  in  the  current  Effort  Sharing  Regulation  (ESR)49  and 
maintained in the proposal for revision adopted on 14 July 202150, which contains 
binding  annual  greenhouse  gas  emission  targets  at  country  level  for  Member 
States  from  2021  to  2030  for  sectors  including  transport  (without  aviation), 
buildings, agriculture, non-EU ETS industry, waste and parts of the energy sector. 
The ESR does not include sectoral measures or targets and Member States have 
the flexibility to decide how to achieve the required mitigation across sectors and 
different  greenhouse  gases.  As  such,  it  does  not  contain  any  general  or  sector-
specific  requirements  or  tools  for  its  implementation,  and  thus  does  not  provide 
specific  incentives  for  companies  in  the  sectors  within  the  scope  of  this  present 
proposal  (coal,  oil  upstream,  gas  upstream,  midstream  and  downstream  -  LNG, 
gas storage, transmission and distribution) to cut down their methane emissions.  
Taking  this  into  account,  further  action  will  be  complementary  to  the  ESR  and 
will facilitate achieving the targets set out under the ESR. Specific action in the 
energy sector is warranted for a number of reasons (further detailed and explained 
in this section and in section 6):  

o  The  persistence  of  large  amounts  of  methane  emissions  in  the  energy 

sector within the EU; 

o  The  projection  of  large  amounts  of  additional  methane  emission 
abatement on top of the baseline that are possible in the sectors included 
in the scope of this report, a significant share of which can be achieved at 
negative to zero net costs; 

o  The absence of such specific measures in a large number of EU Member 
States and the fact that EU action via specific measures to curb methane 
emissions  in  the  energy  sector  will  help  Member  States  to  achieve  their 
ESR targets and can also contribute to increasing the cost-effectiveness of 
achieving  those  targets  due  to  the  trading  potential  in  the  ESR  between 
Member States; 

o  Other  than  specific  EU  measures  to  further  mitigate  methane  emissions, 
this  report  assesses  options  to  achieve  better  and  more  accurate 
information on the origin, magnitude and nature of methane emissions in 
those  sectors.  This  will 
to  have  a  better 
understanding  of  their  methane  emissions,  thereby  allowing  them  to 
achieve  further  effective  abatement  of  their  emissions  and  in  so  doing, 
will further help EU Member States fulfil their ESR targets.  

incentivise  operators 

  Methane is included in the Industrial Emissions Directive (IED)51 which regulates 
installations 

pollutant  emissions  from 

installations.  It  requires 

industrial 

49 https://ec.europa.eu/clima/policies/effort/regulation_en  
50https://ec.europa.eu/clima/policies/effort/regulation_en  
https://ec.europa.eu/info/sites/default/files/proposal-amendment-effort-sharing-regulation-with-
annexes_en.pdf 
51 https://ec.europa.eu/environment/industry/stationary/ied/legislation.htm  

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undertaking certain industrial activities to operate in accordance with a permit and 
conditions  which  include  emission  limit  values  based  on  best  available 
techniques. The scope of the IED however excludes all fossil gas upstream, mid 
and downstream  (LNG,  underground  gas  storage, transmission, distribution), oil 
upstream  as  well  as  coal  mining/extraction.  The  scope  of  the  IED  covers  only 
methane  emissions  from  the  refining  of  mineral  oil  and  gas,  which  are  not 
covered  by  this  initiative.  Thus  every  sub-sector  within  the  scope  of  this  report 
(oil and gas production, LNG, underground gas storage, transmission, distribution 
and  coal mining) is not covered by the IED. The ongoing revision of the IED will 
take  into account  the sub-sectors included in  this proposal  with  a view to avoid 
double regulation and to ensure that this proposal is complementary to the IED. 

  Methane  emissions  occurring  in  space  heating  and  cooling  appliances  (included 
in inventories as part of what we term indirect emissions) are covered in several 
Ecodesign and Energy Labelling regulations52, which provide rules for improving 
the  environmental  performance  of  products,  such  as  household  appliances, 
information  and  communication  technologies  or  engineering.  The  Ecodesign 
Directive sets out minimum mandatory requirements for the energy efficiency of 
these  products.  The  Energy  Labelling  Regulation  complements  ecodesign 
requirements  with  mandatory  labelling  requirements  for  the  information  of 
consumers. 

  The  European  Pollutant  Release  and  Transfer  Register  (E-PRTR)  contains  data 
reported by  individual industrial facilities above  a certain  size threshold to their 
national  authority  on the quantities  of pollutants released  into the air,  water and 
land  within  the  EU  territory53.While  it  includes  methane  among  the  pollutants 
covered,  its  limitation  to  individual  facilities  and  certain  activities  does  not 
provide the necessary scope along the full energy supply chain; it does not cover 
all  fossil  gas  upstream,  mid  and  downstream  (LNG,  underground  gas  storage, 
transmission, distribution) as well as coal mining/extraction.  

The  above  clearly  demonstrates  a  lack  of  appropriate  incentives  and  regulatory 
framework for the mitigation of methane emissions in key methane emitting energy sub-
sectors (see also Annex 6 for more details). 

There  are  a  number  of  voluntary  initiatives  covering  the  oil  and  gas  sectors,  among 
which: 

  The Oil and Gas Methane Partnership (OGMP) voluntary initiative on measuring 

and reporting of methane emissions54.  

  The Oil and Gas Climate Initiative (OGCI)55 partner companies have committed 
to reducing the collective average methane intensity of their aggregated upstream 

https://ec.europa.eu/info/energy-climate-change-environment/standards-tools-and-labels/products-

52 
labelling-rules-and-requirements/energy-label-and-ecodesign_en  
53 https://ec.europa.eu/environment/industry/stationary/eper/legislation.htm 
54https://globalmethane.org/challenge/ogmp.html#:~:text=The%20Oil%20and%20Gas%20Methane,in%20
the%20oil%20and%20gas  
55 https://www.ogci.com/ 

17 / 148 

 
 
                                                           
oil  &  gas  operations  to  below  0.25  %  by  2025  (from  a  baseline  of  0.32  %  in 
2017), with an ambition to achieve a level of 0.2 %.  

  The Methane Guiding Principles56, which is focused on areas of action to reduce 
methane emissions in the oil and gas sector, notably via its best practice guides57, 
designed to help oil and gas companies develop methane management plans.  

  The  Global  Methane  Alliance58,  with  the  aim  to  significantly  reduce  methane 

emissions in the oil and gas sector by 2030. 

  GIE/MARCOGAZ  have  published  a  number  of  reports  and  guides  advising  the 
fossil gas industry on measures to reduce its methane emission reductions59. 

A number of oil and gas companies have also voluntarily committed to methane emission 
reduction targets60. 

In  and  of  themselves  voluntary  initiatives  are,  however,  unlikely  to  provide  sufficient 
sectoral  coverage,  transparency,  and  enforceability  (see  further  Section  2.3.2).  For 
instance, even the currently most ambitious voluntary initiative on MRV of the Oil and 
Gas  Methane  Partnership  (OGMP)  only  covers  around  30%  of  the  world’s  oil  and  gas 
production. 

In  April  2021,  Member  States  were  requested  through  the  Council  Working  Party  on 
Energy  to  provide  information  on  the  regulatory  framework  on  methane  emission 
monitoring  and  mitigation  in  their  respective  jurisdictions.  Unfortunately,  no  direct 
feedback  to  this  request  was  received  by  September  2021.  A  few  submissions  by 
Member  States  containing  information  on  national  rules  were  received  for  the  open 
public consultation61. With this basis, constraints of capacity and time prevent a complete 
overview of rules in place in Member States. Surveys conducted by GIE-MARCOGAZ 
among  their  members  on  the  Commission’s  request  on  LDAR  and  venting  &  flaring, 
respectively,  portray  a  picture  of  often  non-existing  or  insufficient  rules  in  place,  and 
substantial  divergence  in  scope  and  granularity  of  rules  across  Member  States.  The 
results  of  the  surveys  are  further  discussed  in  the  relevant  Sections  2.2.2.i  and  2.2.2.ii 
below. 

Whilst  the  overall  market  failure  of  a  lack  of  internalisation  of  externalities  is  relevant 
regardless of origin, precise scope for mitigation, and current regulatory treatment across 
Member  States,  the  lack  of  incentives  to  mitigate  methane  emissions  needs  to  be 
considered differentially for unintentional and intentional releases of methane and across 
sectors.  

56 https://methaneguidingprinciples.org/about/ 
57 https://methaneguidingprinciples.org/best-practice-guides/ 
58 https://www.ccacoalition.org/en/activity/global-methane-alliance 
59 These include the following: https://www.gie.eu/publications/methane-emission/methane-emissions-
report/; https://www.gie.eu/wp-content/uploads/2021/05/Guidelines-for-methane-target-
setting_Final.pdf; https://www.marcogaz.org/publications/recommendations-on-ldar-campaigns/; 
https://www.marcogaz.org/publications/recommentations-on-venting-and-flaring/ 
60 See in IOGP/GIE/MARCOGAS report on guidelines for methane emissions target setting, April 2020 
61 Denmark, Hungary, Netherlands, Latvia, and Spain 

18 / 148 

 
 
                                                           
Table 2: Overview of existing EU legislation and voluntary initiatives covering methane emissions 

Methane 
in scope 

Emission 
reporting 
requirement/
Level of 
emission 
reporting 

Mitigation 
requirement/
Description 
of type of 
requirement 

Directly applicable provisions 
on specific mitigation 
measures 

Sectoral coverage 

Industry 
coverage 

EU legislation 

ETS 

ESR 

No 

Yes 

IED 

Yes 

Eco design 

Yes 

None 

None 

None 

Yes/ 
Member 
State level** 

Yes/ 
Installation 
level 

Overall GHG 
reduction 
target but no 
specific CH4 
targets *** 
Permits and 
BATs, 
applies to 
large 
industrial 
installations 
Emission 
limits by 
design 

LDAR  Venting 

Flaring 

Oil or gas production, gas 
transmission, oil or gas storage, 
LNG, gas distribution. 

Oil 

Gas 

Coal 

End-use 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

Yes 

Yes 

No 

Yes 

No 

No 

No 

No † 

No † 

No 

Yes 

No 

No 

No 

No 

No 

No 

Yes†† 

E-PRTR 

Yes 

Yes/ Facility 
level  

None 

No 

No 

No 

No 

No* 

Yes 

Yes 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voluntary initiatives 

No 

No 

No 

No 

No 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Ban 

Ban  

None 

None 

Yes/ up to 
facility level 

Oil & Gas 
Methane 
Partnership 
Global Gas 
Flaring 
Reduction 
Partnership63 
Zero Routine 
Flaring by 
2030 
Initiative65 
Oil and Gas 
Climate 
Initiative67 
* includes LNG terminals 
** through Reg 525/2013: monitoring and reporting greenhouse gas emissions 
*** the ESR emissions target is for GHG overall, no specific sub-target for methane is set. 
† Note that the IED includes the category of refining of mineral oil and gas 
†† specifically applicable for specific end-use product categories, e.g. solid fuel local space heaters 
††† Upstream operations only 

Yes †††  Yes 
††† 

Yes/ 
Member 
State or  

Company 
(asset based) 

Intensity 
target 

Yes 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

30% of global 
oil and gas 
production62 
40%64 

No 

No 

No 

No 

60% of global 
gas flared66 

32% of global 
oil and gas 
production68 

62 http://ogmpartnership.com/ 
63 https://www.worldbank.org/en/programs/gasflaringreduction 
64 DG ENER correspondence with the World Bank 
65 https://www.worldbank.org/en/programs/zero-routine-flaring-by-2030 
66 Ibid 
67 https://www.ogci.com/ 
68 https://www.ogci.com/wp-content/uploads/2019/10/OGCI-Annual-Report-2019.pdf  

20 / 148 

 
 
 
 
                                                           
2.2.2.1.Unintentional release of methane 

More than half of all direct energy sector methane emissions is estimated to come from 
unintentional  release  of  emissions  into  the  atmosphere  (see  Section  2.1  Emission 
estimates). The countries reporting the highest methane emission estimates in the energy 
sector  are  Poland,  Germany,  Romania,  Italy,  Czech  Republic,  and  Hungary69,  all  of 
which  have  a  ratio  of  fugitive  emissions  above  50%  of  total  reported  energy  sector 
methane emissions (see Figure 2). 

In  the  case  of  oil  and  gas,  the  largest  proportion  of  methane  emissions  in  the  EU  is 
estimated  to  come  from  leaks  from  various  points  along  the  supply  chain70.  Leaks  can 
occur  during  drilling,  extraction  as  well  as  processing,  storage,  transmission  and 
distribution to end-use consumers71. Some emissions can result from imperfections in, or 
ordinary  wear  and  tear  of,  technical  components  such  as  joints,  flanges  and  valves, 
among  others,  or  damaged  components,  e.g.  in  case  of  accidents.  Corrosion  or  damage 
can also cause leaks from the walls of pressurised equipment72. Methane emissions from 
leaks  are  most  commonly  reduced  by  periodic  Leak  Detection  and  Repair  (LDAR) 
surveys/programs that comprise inspections to identify leaks followed by repair73. LDAR 
programmes are traditionally driven by safety considerations74. However, leak detection 
practices, frequencies, type and granularity of assets covered and hence effectiveness of 
LDAR  as  well  as  efforts  to  quantify  fugitive  emissions  vary  widely  across  Member 
States. Lack of detection and quantification of emissions from leaks further contributes to 
the  uncertainty  surrounding  estimates  of  methane  emissions  in  the  fossil  fuel  supply 
chain  discussed  under  section  2.2.175.  A  lack  of  mitigation  of  emissions  from  leaks 
contributes to continued  and increasing  emissions where small leaks are left to develop 
into large leaks76. 

In the EU, legislation on LDAR exists only at the national level in a few Member States. 
A survey  conducted among mid  and  downstream gas  companies  by GIE-MARCOGAZ 
on  request  of  the  Commission  returned  responses  from  companies  operating  in  18 
Member  States.  Of  those  18,  13  were  identified  as  having  some  form  of  rules  on  leak 
detection  in  place,  and  five  as  not  having  any  binding  rules.  Among  the  13  countries 
indicated  to  have  rules  in  place,  respondents  described  the  legal  nature  of  the  rules  to 
differ. Some Member States adopted specific regulations (e.g. Belgium, France, Greece), 
and  in  others  rules  are  stipulated  by  the  National  Regulatory  Authority  (e.g.  Italy, 
Romania).  The  scope  of  the  rules  varies,  with  responses  indicating  divergence  in 
coverage from distribution networks only, to including transmission networks as well as 
storage  facilities.  Asked  whether  respondents  to  the  survey  quantified  emissions  from 
leaks,  six  out  of  eleven  DSOs  and  ten  out  of  29  TSOs  indicated  that  they  do  not.  For 

69 See also Annex 7, Table A.7.1.. Methane emissions for the energy sector in Kt, per Member States, as 
reported to UNFCCC in April 2021 for 2019. 
70 https://www.iea.org/reports/methane-tracker-2020/methane-from-oil-gas 
71 https://www.wri.org/insights/close-look-fugitive-methane-emissions-natural-gas 
72 GIE-MARCOGAZ, February 2021, Facts finding journey in survey answers on LDAR. Presentation to 
DG ENER. 
73  A  methane  emissions  reduction  equivalence  framework  for  alternative  leak  detection  and  repair 
programs, Fox, TA, et al. 2019. 
74 IOGP response to the open public consultation, available at 
https://www.oilandgaseurope.org/documents/response-legislation-to-measure-and-mitigate-methane-
emissions/ 
75 See also the research efforts by EDF on leakage, online, https://www.edf.org/climate/methane-studies 
76 The Sniffers (2020) Benchmark Results: Analysis of 400 Gas Asset Emission Monitoring Campaigns. 

 
 
                                                           
those having indicated that quantification of leaks takes place, this does not necessarily 
mean that all leaks are quantified77. 

At the global level, some voluntary initiatives and best practices have emerged, notably 
the United Nations Economic Commission for Europe (UNECE) best practice guidance 
for effective methane management in the oil and gas sector78 and the Methane Guiding 
Principles LDAR guide79. While the private sector has developed voluntary initiatives to 
measure  and  reduce  emissions  from  fugitive  methane  leaks  in  the  gas  industry,  they 
remain  fragmented  along  the  value  chain  and  lack  harmonisation80.  According  to  the 
IEA,  while  a  number  of  companies  already  undertake  LDAR,  the  frequency,  practices 
and rigour of programmes still vary widely within the industry81. 

2.2.2.2.Intentional release of methane 

Aside from fugitive emissions and incomplete combustion, all other emissions in the EU 
energy sector stem from intentional releases of methane, including from venting, flaring, 
and the use of equipment that emits (‘bleeds’) as part of its normal operation. Flaring is 
the process of burning associated, unwanted or excess gases and liquids released during 
normal  or  unplanned  processes.  Venting  is  the  process  of  directly  releasing  gasses  into 
the atmosphere, often for the same reasons, or as part of equipment design. Excess gasses 
in oil, gas and coal production can be a safety hazard and must therefore be processed, 
either by trapping, utilisation, or by flaring or venting.  

While vented and flared gas implies the destruction of a valuable commodity, depending 
on the sector and part of the supply chain, operators may not have the right incentives to 
avoid emitting methane in those ways. As discussed above, methane abatement decisions 
by energy companies are often undertaken on the basis principally of cost effectiveness 
and  safety  risk  considerations,  not  for  social  or  environmental  reasons.  Other  missing 
incentives may include the lack of attribution of responsibility for emissions to specific 
operators,  the  lack  of  available  infrastructure  to  bring  associated  gas  to  market,  or  the 
lack of awareness or incentives in using the available mitigation measures – as indicated 
by the availability of cost effective measures that are not being implemented (for further 
details  see  section  6.2)82.  Further  downstream,  emissions  are  often  linked  to  venting 
events with typically smaller emission quantities from individual sources. Avoidance or 
recovery per unit can be more difficult and costly under such circumstances.  

https://unece.org/sustainable-energymethane-management/best-practice-guidance-effective-methane-

77 GIE-MARCOGAZ, February 2021, Facts finding journey in survey answers on LDAR. Presentation to 
DG ENER. 
78 
management-oil-and  
79  Methane  Guiding  principles:  Reducing  Methane  Emissions:  Best  Practice  Guide  on  equipment  leaks, 
November 2019. https://methaneguidingprinciples.org/best-practice-guides/equipment-leaks/ 
80 Potential  ways the gas industry can contribute to the reduction of  methane emissions (2019) Report to 
https://ec.europa.eu/info/sites/default/files/gie-marcogaz_-_report_-
the 
_reduction_of_methane_emissions.pdf  
81 https://www.iea.org/reports/methane-tracker-2020/methane-abatement-options  
82 
https://www.iea.org/reports/methane-tracker-2021/methane-abatement-and-regulation  

Tracker:  Methane 

(2021)  Methane 

abatement 

regulation 

Madrid 

Forum, 

IEA 

and 

See 

22 / 148 

 
 
 
 
                                                           
a)  Venting and flaring in the oil and gas sectors 

Of the total 3.1 million tonnes of methane emissions within the EU reported in the April 
2021 EU GHG Inventory Submissions to the UNFCCC, venting in the oil and fossil gas 
sectors accounted for respectively 57 kilotonnes (kt) and 15 kt of methane. Flaring in the 
oil  sector  contributed  61  kt  and  flaring  of  fossil  gas  9  kt  of  methane  emissions.  On  a 
global  level,  and  in  relation  to  energy  imported  and  consumed  in  the  EU,  venting  and 
flaring are a much larger issue. The World Bank estimates that 140 bcm (118 Mtoe) of 
gas – equivalent to about a third of the EU’s gas consumption  – are flared each  year83, 
and  recently  developed  the  Imported  Flare  Gas  Index  highlighting  the  exposure  of  oil 
importing countries to gas flaring84. 

The  motivation  behind  flaring  and  venting  activities  can  differ  depending  on  whether 
they  occur  as  part  of  routine  operations,  in  exceptional  circumstances,  or  for  safety 
reasons  with  substantial  uncertainty  surrounding  the  classification  of  specific  instances 
within such categories. For flaring in the oil sector, the World Bank's Global Gas Flaring 
Reduction  Partnership  (GGFRP)  has  devised  a  set  of  definitions  in  close  consultation 
with stakeholders, which provides a widely held understanding specifically for flaring at 
oil production facilities considering the categories  of routine flaring, safety flaring, and 
non-routine flaring85. The GGFRP definitions address only the upstream however. Fossil 
gas production does not typically incur flaring as operations are focused on capturing and 
bringing the gas to market. For venting, there are no comparable definitions.  

Flaring can also provide an alternative to venting where no other options for the disposal 
of excess gases are available. Flaring is generally the safer approach for disposal relative 
to  venting.  However  it  remains  a  second-best  option  compared  to  full  emission 
mitigation. 

In the EU gas mid- and downstream , industry argues that there is no reason to vent or 
flare  to  balance  production  and  demand86.  However,  some  operational  activities 
(including  maintenance  and  start/stop  operations)  and  the  use  of  pneumatic  equipment 
entail  emissions.  It  is  unclear  from  available  reports  how  much  of  the  total  methane 
emissions in this part of the supply chain derive from venting and flaring across the EU87. 
Recent  examples  by  the  Clean  Air  Task  Force  campaign  ‘CutMethane’  of  recorded 
venting activities from infrastructure across Europe signal a larger-scale issue.88 

(2016)  Global  Gas  Flaring  Reduction  Partnership  Gas  Flaring  Definitions. 

83 World Bank (2021) Zero Routine Flaring by 2030. https://www.worldbank.org/en/programs/zero-
routine-flaring-by-2030 
84 World Bank (2021) A new index highlights the need for shared responsibility to end gas flaring. 
https://blogs.worldbank.org/opendata/new-index-highlights-need-shared-responsibility-end-gas-flaring 
85  World  Bank 
https://documents1.worldbank.org/curated/en/755071467695306362/pdf/Global-gas-flaring-reduction-
partnership-gas-flaring-definitions.pdf   
86 Marcogaz (2021) Venting and flaring on mid and downstream gas infrastructure 
87  Note  that  in  this  part  of  the  supply  chain  it  is  predominantly  an  issue  of  venting.  An  industry 
quantification  of  venting  within  the  European  gas  network  for  selected  segments  shows  venting  to 
represent 6% of methane emissions from LNG terminals, 17% from underground storage, and 40% from 
transmission in 2016. Marcogaz (2016) 
88 https://cutmethane.eu/ 

23 / 148 

 
 
 
                                                           
Further  emission  reductions  are  technically  achievable  by  application  of  best  available 
practices, which, however, remains fragmented. Emission reductions in transmission and 
distribution,  for  example,  are  subject  to  awareness  and  to  considerations  of  operators’ 
costs  against  environmental  benefit,  impact  of  asset  (un)availability,  and  security  of 
supply89. Current frameworks do not seem sufficient to appropriately tackle the issue. 

On basis of a survey conducted on request of the Commission, GIE-MARCOGAZ comes 
to  the  conclusion  that  “the  reduction  of  venting  and  flaring  is  neither  regulated  nor 
incentivised  in  most  European  countries”90.  As  far  as  national  provisions  exist,  they 
commonly  emphasize  licensing  requirements  from  the  relevant  competent  authority  to 
conduct activities releasing methane emissions into the air.  

b)  Venting and flaring in the coal sector 

For  the  coal  sector,  methane  emissions  are  primarily  linked  to  hard  coal  underground 
mining  activities,  both  in  operating  and  abandoned  mines.  Methane  is  produced  during 
the  coal  formation  and  is  released  into  the  atmosphere  during  mining  activities  though 
ventilation  and  degasification  systems  and  from  cracks  in  the  coal  seams  post  mining 
operations.  Emissions  from  lignite  mines  are  more  difficult  to  identify,  as  according  to 
IPCC Guidelines, it is  not  yet  feasible to  collect  mine-specific higher tier measurement 
data for surface mines91. 

In  underground  mines,  methane  is  an  important  health  and  safety  issue  as  it  can,  in 
certain  concentrations,  lead  to  explosions.  Production  releases  methane  trapped  in  coal 
seams,  called  coalmine  methane  (CMM).  Methane  can  be  captured  before,  during  and 
after  mining  by  pre-  and  post-mining  drainage  techniques,  respectively.  In  active 
underground  mines,  atmospheric  methane  concentration  is  continuously  controlled. 
Methane drainage can be used to lower the percentage of methane in the air by capturing 
the gas to prevent it from entering mine airways. In the EU, recovered CMM is, if at all, 
most commonly used for power generation on site92. Current practices differ by Member 
State and mine. Ventilation air from underground mines contains diluted concentrations 
of methane, referred to as ventilation air methane (VAM). VAM can be mitigated with or 
without energy recovery93, though solutions remain comparably expensive94. 

Today, incentives are often insufficient to ensure recovery of such methane emissions. At 
present,  there  are  no  EU-wide  specific  regulations  limiting  CMM  or  VAM.  In  some 
Member States, national legislation is in place to reduce the fugitive methane losses from 

2021,  Recommendations 

89 GIE-MARCOGAZ, April 2021, MARCOGAZ technical recommendation On Venting & Flaring  - Gas 
mid and downstream segment, Presentation to DG ENER 
90  GIE-  MARCOGAZ,  April 
https://www.marcogaz.org/publications/recommentations-on-venting-and-flaring/  
91  Lignite  mines  in  the  EU  are  predominantly  opencast  surface  mines,  with  the  exception  of  one  lignite 
underground mine in Slovenia. 
92  JRC  (2015)  Environmental  and  Sustainability  Assessment  of  Current  and  Prospective  Status  of  Coal 
Mine Methane Production and Use in the European Union 
93  Ventilation  Air  Methane 
July 
https://www.epa.gov/sites/production/files/2017-01/documents/vam_technologies-1-2017.pdf.pdf 
94  JRC  (2015)  Environmental  and  Sustainability  Assessment  of  Current  and  Prospective  Status  of  Coal 
Mine Methane Production and Use in the European Union 

(VAM)  Utilization 

on  Venting 

Technologies, 

Flaring, 

EPA, 

2019 

and 

24 / 148 

 
 
 
                                                           
coal  production95,96.  In  Germany,  while  there  is  no  direct  requirement  for  mining 
companies to capture those gases97, coal mine methane and abandoned mine methane are 
eligible  for  feed-in-tariffs  when  used  to  generate  electricity.  In  its  2014  State  Aid 
Decision on the relevant German Renewable Energy Law (EEG), the Commission finds 
the measure to be an effective and proportionate incentive98, which was reaffirmed in the 
2021 decision on the amended EEG99. A similar approach is taken in France for coalmine 
methane100  for  environmental  protection  and  safety  purposes,  where  legislation  aims  to 
ensure a tariff that reasonably covers the exploitation costs of this resource while limiting 
the revenues.  

Since 1990, certain EU countries have drastically reduced methane emissions from coal 
mining,  such  as  Germany  and  the  Czech  Republic.  In  comparison,  since  that  time,  no 
changes have been recorded in Romania, while in Poland, methane emissions from coal 
have been reduced by only around 17%101. Some projections consider that the decrease in 
coal  production  will  lead  to  a  decrease  in  coal-related  methane  emissions102.  However, 
recent  studies  have  shown  that  these  emissions  might  be  currently  underestimated,  and 
that  emissions  of  mines  with  continued  production  are  likely  to  increase  in  the  future 
because of exploitation of deeper and gassier deposits due to the exhaustion of shallow 
coal reserves103.  

Once  production  is  halted  and  a  mine  is  abandoned,  it  continues  to  release  methane, 
referred  to  as  abandoned  mine  methane  (AMM),  over  a  long  period  of  time104. 
Attribution of responsibility for those emissions and their abatement can pose a problem 
depending  on  ownership  and  exploitation  rights,  and  treatment  of  AMM  remains 
fragmented  with  significant  quantities  escaping  into  the  atmosphere  and  emissions 
projected to increase as more mines close105. 

95 Global Methane Initiative (2013). European Commission Global Methane Reduction Actions, Ref. Ares 
(2013)2843722-06/08/2013. 
96 Also in the UK, legislation has provided tax breaks for CMM projects, for further details see N. Kholod 
et al., Legal and Regulatory Status of Abandoned Mine Methane in Selected Countries: Considerations for 
Decision Makers, 2018 
97 European Commission C(2014) 5081 final, recital (274), State aid SA.38632 (2014/N) – Germany EEG 
2014 – Reform of the Renewable Energy Law, 
https://ec.europa.eu/competition/state_aid/cases/252523/252523_1589754_142_2.pdf 
98 Ibid, section 3.3.3.3 
99 European Commission C(2021) 2960 final, State Aid SA.57779 (2020/N) – Germany EEG 2021, 
https://ec.europa.eu/competition/state_aid/cases1/202124/288710_2283746_342_2.pdf 
100 Loi n° 2006-1537 du 7 décembre 2006 relative au secteur de l'énergie  
101 UNFCCC 2017 reported data on greenhouse gas emissions: EEA Report No 6/2019, Annual European 
Union  greenhouse  gas  inventory  1990–2017  and  inventory  report  2019,  Submission  under  the  United 
Nations Framework Convention on Climate Change and the Kyoto Protocol, 27 May 2019 
102 Global Non-CO2 Greenhouse Gas Emission Projections & Mitigation Potential: 2015-2050, EPA, 2019 
103  N.  Kholod  et  al  (2020)  Global  methane  emissions  from  coal  mining  to  continue  growing  even  with 
declining coal production, , Journal of Cleaner Production, Volume 256, 120489 
104 Ibid 
105 Ibid 

25 / 148 

 
 
 
                                                           
2.2.3.  Lack  of  information  on  and  mitigation  of  methane  emissions 
occurring  outside  the  EU  but    linked  to  consumption  of  fossil 
energy in the EU. 

EU  import  dependence  is  95.7%  for  oil106  and  89.7%  for  fossil  gas107.  As  discussed 
above, neither precise knowledge nor official estimations exist on the magnitude, origin 
or  nature  of  methane  emissions  occurring  outside  of  the  EU  and  specifically  linked  to 
fossil energy consumed in the EU.  

The  same  market  failures  occurring  within  the  EU  also  apply  to  operators  in  countries 
exporting energy to the EU. Lack of information is a particularly strong driver for market 
failures  across  borders  as  internalisation  of  externalities  is  further  impeded.  Exporters 
lack incentives to act on methane emissions as long as importers do not  have access to 
reliable  emission  information  that  could  inform  their  buying  decisions  (e.g.  to  fulfil 
company  or  demand-driven  environmental  considerations)  or  internationally  occurring 
externalities are priced in through (domestic) regulation108. Whereas for instance local air 
pollution would primarily be a domestic concern, global warming effects are externalities 
that  affect  exporters,  importers  as  well  as  third  parties.  Some  exporting  countries  are 
beginning  to  act  domestically  on  methane  emissions  from  the  energy  sector.  For  many 
exporters operating under conditions without domestic regulation of methane emissions 
the only reliable incentive, however, would be clear market signals. For such signals to 
emerge, relevant information needs to become available and visible.  

In  the  absence  of  obligations  to  submit  comprehensive  GHG  inventories  to  the 
UNFCCC, uncertainties about emissions related to imported fossil energy are aggravated 
by many exporting countries yet having to submit any data, making estimates of actual 
emissions dependent on incomplete top-down observational data (e.g. from satellites) and 
extrapolation. A number of key exporting countries of fossil energy to the EU are parties 
to  the  Paris  Agreement,  and  are  as  such  committed  to  its  greenhouse  gas  reduction 
objectives.  These  include  Algeria,  Australia,  Colombia,  Iraq,  Nigeria,  Norway,  Qatar, 
Russia,  Saudi Arabia,  South Africa,  the  United  Kingdom,  and  the  United  States,  which 
are all major exporters of either coal, fossil gas or oil to the EU. While parties to the Paris 
agreement  are  normally  expected  to  submit  national  GHG  inventories  data  to  the 
UNFCCC,  to  date,  of  those  major  exporters,  only  five  have  submitted  full  inventories: 
Australia,  Norway,  Russia,  the  United  Kingdom  and  the  United  States.  Even  for  those 
countries that have submitted national GHG inventories, the quality of the data is only as 
good as the levels of tier of reporting employed. As stated in the case of the EU, there is 
no obligation to report direct source-level measurements of emissions (Tier 3 reporting, 
according to the IPCC guidelines) in the GHG inventories delivered to the UNFCCC. 

106 The statistical category comprises crude oil and natural gas liquid 
107  European  Commission  (2021)  EU  energy  in  figures,  statistical  pocketbook  and  country  datasheets  
(June 2021) https://ec.europa.eu/energy/data-analysis/energy-statistical-pocketbook_en  
108 The Flaring Intensity Index recently developed by the World Bank for instance attempts to make such 
information visible by highlighting the exposure of crude oil importing countries to the flaring practices 
linked to its production. See https://blogs.worldbank.org/opendata/new-index-highlights-need-shared-
responsibility-end-gas-flaring 

26 / 148 

 
 
 
                                                           
The nine largest exporters of fossil fuels to the EU are considered to be responsible for 
half of the world's methane emissions109. Russia and the United States alone, which are 
the  largest  exporters  of  fossil  fuels  to  the  EU,  are  estimated  to  be  responsible  for  one-
third of methane emissions in the energy sector worldwide110. According to the IEA111, 
Russia was estimated to have emitted almost 14 million tonnes of methane in the energy 
sector for oil and gas in 2020, followed by the United States, which emitted 11.8 million 
tonnes  of  methane  that  same  year.  Iraq  and  Algeria  were  estimated  to  have  emitted 
respectively  3.4  million  tonnes  and  2.6  million  tonnes  of  methane.  As  a  point  of 
comparison,  the  EU’s  entire  energy  sector  was  estimated  to  have  emitted  3.1  million 
tonnes of methane in 2019 within the EU. 

Moreover,  according  to  a  series  of  scientific  studies  coordinated  by  environmental 
organisations,  not  only  have  emissions  from  oil  and  gas  production  activities  increased 
globally  from  65  to  80  Mt/year  in  the  last  20  years,  but  such  emissions  from  national 
inventories  have  been  widely  underestimated      and  industries  are  likely  to  be 
underreporting  methane  emissions  in  the  energy  sector112.  Case  studies  for  specific 
production areas or parts of the supply chain in the US, Canada113, Russia114, and Iraq115 
all  show  significant  underreporting  with  actual  emissions  up  to  15  times  higher.  In 
addition, the  number of  large methane leaks around the world, each  associated with  an 
ultra-emitter,  was  found  to  amount  to  more  than  1,800  single  observed  anomalies  over 
two years (2019-2020),  a large  fraction of them located over Russia, Turkmenistan, the 
United States, the Middle East and Algeria116. 

Currently,  voluntary  industry-led  initiatives  remain  the  principal  course  of  action  for 
methane emission mitigation in many countries but are not sufficient for addressing the 
global oil and natural gas value chain. Existing regulatory instruments often remain either 
ineffective,  incomplete  or  non-existent  among  a  number  of  countries  exporting  fossil 
energy to the EU. For instance, approaches to regulations on venting and flaring across 
oil and gas producer countries vary widely. Major exporting countries to the EU such as 
Russia, Saudi  Arabia,  Iran,  Iraq and United Arab Emirates do not  have any regulations 
restricting  venting  and  flaring;  the  US  has  restrictions,  performance  standards  and 
taxes/fees  on  venting  and  flaring  but  not  at  federal  level,  and  Russia  applies  a  fee  for 
flared  gas  but  allows  deductions  for  investment  in  associated  gas  infrastructure117. 

109 https://www.iea.org/articles/methane-tracker-database  
110 ibid 
111 ibid  
112  https://www.edf.org/media/new-oil-and-gas-study-shows-once-again-industry-severely-underreporting-
methane-emissions  
113 https://drillordrop.com/2016/06/11/uk-link-to-alleged-under-reporting-of-fracking-methane-emissions/  
114  TJ  Cinq-Mars,  1Leak  Detection  and  Repair  in  the  Russian  Federation  and  the  United  States: 
Possibilities for Convergence 
115 https://jpt.spe.org/gas-capture-and-storage-program-iraq-slashes-emissions 
116 Global Assessment of Oil and Gas Methane 1 Ultra-Emitters; T. Lauvaux, C. Giron, M. Mazzolini, A. 
d’Aspremont, R. Duren, D. Cusworth, D. Shindell, P. Ciais; April 2021. 
117 IEA (2021) Driving down methane leaks from the oil and gas industry, see Table 2 

27 / 148 

 
 
 
                                                           
Among the same set of countries, only the United States have prescriptive regulations on 
leak detection and repair118. 

For  exporters,  especially  in  the  absence  of  effective  domestic  regulation,  clear  market 
signals would be a strong incentive, but remain absent.  

  How will the problem evolve? 

2.3.1.  Contribution of methane emissions to temperature change 

The  Intergovernmental  Panel  on  Climate  Change  (IPCC)  notes  that  deep  reductions  in 
methane  emissions  must  be  achieved  by  2030  for  the  world  to  stay  below  1.5°C  (and 
similarly  2°C)  temperature  change119.  Figure  3  highlights  the  projected  temperature 
developments  in  relation  to  the  mitigation  of  methane  emissions.  Recent  estimations 
show  that  at  a  global  level,  reducing  methane  emissions  associated  with  anthropogenic 
activity by 45% by 2030 would avoid 0.3°C of global warming by the 2040s.120 

Figure 3: Temperature pathways to 2050 

The  strong  effect  of  methane  on  climate  change  requires  accelerated  action.  Without 
regulatory intervention, internalisation of the externalities caused by methane emissions 
is  unlikely,  and  the  market  failure  will  persist.  With  respect  to  all  three  identified 
problem drivers, increasingly ambitious commitments to  global climate objectives set  a 
positive frame for action. While voluntary industry initiatives exist, economic incentives 
for operators, however, often remain insufficient without regulatory action.  

118 Ibid 
119 IPCC Special report: Global warming of 1.5°C, available at https://www.ipcc.ch/sr15/chapter/spm /  
120  Climate  and  Clean  Air  Coalition  &  United  Nations  Environment  Programme  (2021)  Global  Methane 
Assessment, 
https://www.unep.org/resources/report/global-methane-assessment-benefits-and-costs-
mitigating-methane-emissions 

28 / 148 

 
 
 
 
 
 
                                                           
As  discussed  in  Section  2.2.2.,  relevant  existing  EU  regulation  does  not  provide 
sufficient  measurement,  reporting  and  verification  obligations  for  accurate  information 
on  the  full  extent  of  methane  emissions  in  the  energy  supply  chain.  It  also  leaves 
mitigation  of  a  large  part  of  methane  emissions  outside  of  its  scope  with  current 
provisions focused predominantly on specific sub-sectors in end-use (see Table 2) 

2.3.2.  Why  methane  emissions  will  still  be  relevant  in  a  decarbonised 

future  

Methane  emission  mitigation  is  important  to  lessen  fossil  energy’s  impacts  on  climate 
change  and  the  environment  while  clean  fuels  progressively  replace  fossil  fuels.  The 
regulatory  framework    being  put  in  place  in  the  context  of  the  European  Green  deal  is 
supportive  of  the  progressive  replacement  of  fossil  fuels  with  renewable  and 
decarbonised  energy  carriers,  towards  which  the  Commission’s  July  2021  Green  Deal 
proposals  contribute,  including  among  others  the  revision  of  the  Renewable  Energy 
Directive, as well as the Hydrogen and Gas Market Decarbonisation Package121. 
Presently,  fossil  fuels  still  dominate  the  energy  mix122  and  fossil  gas  is  often  seen  as  a 
transition  fuel  for  the  coming  decade,  warranting  appropriate  emission  reductions  to 
enable such a role and ensure sufficient security of supply during the transition. 
The impact assessment of the 2030 Climate Target Plan123 discusses the evolution of the 
energy  system  in  line  with  the  climate  neutrality  objective  by  2050,  and  provides 
elements  on  the  possible  sources  of  future  methane  emissions  in  a  progressively 
decarbonised energy system124.  

The analysis contained in the impact assessment reveals that while overall consumption 
of fossil gas is expected to progressively reduce over time, by 2030 it is projected to be 
only  around  13%  lower  than  in  2015,  eventually  reducing  by  around  70%  in  2050 
compared to 2015, which still represents a consumption of around 100 Mtoe.  

121 See Annex 6 on linkages 
122 Natural gas provided 17.2% of the EU energy mix in 2020, solid fossil fuels 26.4%, and oil and 
petroleum products 37.7%, 
123 SWD(2020) 176 final 
124 Ibid., section 9.4.2.4, Figure 49 

29 / 148 

 
 
 
                                                           
Figure 4: Energy gross inland consumption (Climate Target Plan impact assessment) 

Fossil  gas  consumption  still  increases  from  current  levels  by  2030  in  some  Member 
States and will remain a major source of heating for buildings until 2030. Especially in 
urban areas, the health impacts from methane emissions’ contribution to ozone formation 
will therefore continue to remain an important factor125.   

It is also important to highlight that other forms of methane-based fuels will develop in 
the  EU  energy  system  throughout  this  transition.  While  biomethane  and  low-carbon 
synthetic  methane  are  expected  to  play  a  limited  role  by  2030,  they  are  expected  to  be 
increasingly  deployed  afterwards.  In  2030,  their  consumption  amounts  to  close  to  20 
Mtoe and is projected to keep increasing afterwards to reach around 60 Mtoe of biogas 
and 50 Mtoe of synthetic methane by 2050, for uses in various sectors of the economy. 

As  a  consequence,  methane-based  fuels,  which  will  continue  to  be  transported  through 
the  existing  gas  network,  will  continue  to  represent  an  important  element  of  the  EU 
decarbonised energy system by 2050, amounting in total to 60%-70% of the consumption 
of  gaseous  fuels  observed  in  2015.  This  consumption  is  a  potential  source  of  methane 
leaks along the entire supply chain for both fossil and renewable gas, both with the EU as 
well as outside the EU when these fuels are imported. 

125 Plant, G., Kort, E.A., Floerchinger, C., Gvakharia, A., Vimont, I. and Sweeney, C., 2019. Large fugitive 
methane emissions from urban centers along the US East Coast. Geophysical research letters, 46(14), 
pp.8500-8507, https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2019GL082635 
Euroneaws (13 September 2021) Scientists sniff for hidden methane leaks to combat global warming 
https://www.euronews.com/green/2021/09/13/scientists-in-utrecht-sniff-out-methane-to-help-protect-the-
environment 

30 / 148 

 
 
 
 
                                                           
Also for hydrogen, the issue of methane emissions remains if it is produced from fossil 
gas126. Fugitive and intentional releases of methane remain relevant in the production and 
transmission  of  fossil  gas  to  the  point  of  transformation  into  hydrogen,  potentially 
impeding or eliminating any greenhouse gas emissions advantage of such hydrogen127. 

Furthermore, while coal is projected to virtually disappear from the EU energy system by 
2050, some limited consumption  of oil is  expected to  remain by 2050 notably for non-
energy purposes. This refining, transport, distribution and consumption of oil can also be 
a source of venting and leakage of methane. 

Finally,  and  in  addition  to  possible  methane  emissions  from  actively  operated  assets, 
emissions  from  closed  and  abandoned  sites  (coalmines,  oil  and  gas  boreholes  and 
wellheads, etc.) represent a long-term issue independent of future consumption that also 
needs to be addressed.  

As  a  consequence,  a  fully  decarbonised  EU  energy  sector  will  still  be  associated  with 
risks of methane emissions along the active supply chains of liquid and gaseous fuels (be 
it within the EU or externally through the imports of fuels), as well as from closed fossil 
fuel production sites. Specific actions to abate these emissions is thus required to ensure 
that such an energy sector fully contributes to the EU climate neutrality objective.  

2.3.3.  Availability of data  

The  current  reporting  requirements  and  recommendations  for  use  of  the  different  tiers 
under UNFCCC reporting can be improved (see  2.2.1), and substantial improvement of 
data availability and accuracy for methane emissions is unlikely to be forthcoming under 
present conditions.  

However, parts of the oil and gas industry have recognised the issue and the setting up of 
the  Oil  and  Gas  Methane  Partnership  (OGMP)  voluntary  initiative  on  measuring  and 
reporting  of  methane  emissions  by  companies128  is  based  on  the  premise  that  by 
establishing best-practices in both emissions quantification and management, the OGMP 
equips  partner  companies  with  the  tools  to  systematically  survey  their  operations  to 
identify  equipment  and  processes  with  high  potential  to  emit  methane,  and  to  utilize 
proven methods to minimize these emissions129. Indeed, the objectives of OGMP are to 
improve  the  availability  of  global  information  on  where  partner  companies  can  reduce 
methane  emissions  and  driving  mitigation  actions  to  achieve  methane  emission 

126 For instance by Steam methane Reformation including with CCS/U or pyrolysis. 
127 Howarth, R.W., and Jacobson, M.Z. (2021) How green is blue hydrogen? Energy Science & 
Engineering, https://onlinelibrary.wiley.com/doi/full/10.1002/ese3.956  
128https://globalmethane.org/challenge/ogmp.html#:~:text=The%20Oil%20and%20Gas%20Methane,in%2
0the%20oil%20and%20gas  
129 Oil and Gas Methane Partnership, online, accessed 31/08/2021 - http://ogmpartnership.com/ 

31 / 148 

 
 
 
 
 
 
                                                           
reductions130.  This  approach  is  in  fact  considered  best  practice,  on  the  basis  that  while 
measurement  and  reporting  on  the  one  hand,  and  mitigation  on  the  other,  are  distinct 
activities,  they  are  also  strongly  related  because  mitigation  can  be  most  effective  and 
cost-efficient  when  based  on  sound  measuring,  reporting  and  verification  (MRV) 
practices131. To date, 62 companies have signed up to OGMP, covering 30% of global oil 
and gas production and assets on five continents132.  

Nevertheless, the OGMP is a voluntary initiative and does not provide full coverage of 
EU  methane  emissions  or  emissions  linked  to  EU  fossil  fuel  consumption.  For  further 
development  of  data  availability  through  the  OGMP,  it  is  unfortunately  not  possible  to 
predict the further uptake by industry or how many companies will sign up to the OGMP 
going forward. It is also limited to the oil and gas sectors and does not address methane 
emissions from coal. Once operational, reporting is limited to aggregate numbers on an 
annual basis, imposing limitations on transparency. While providing a positive impetus, 
the  voluntary  nature  and  incomplete  coverage  of  OGMP  make  it  an  unsuitable  stand-
alone basis for regulatory action on mitigation. 

Without a solid MRV framework, and in continued absence of verified source-level data 
as  basis  for  evidence-based  measures  and  reliable  metrics  for  the  evaluation  of  their 
success,  regulatory  action  on  methane  emission  mitigation  remains  constrained  in  its 
options.  

As  regards  methane  emissions  occurring  outside  of  the  EU,  unless  measures  to 
specifically  address  them  are  put  in  place,  it  can  be  expected  that  the  critical  situation 
clearly detailed in Section 2.2.3 will continue in the future. 

2.3.4.  Mitigation of methane emissions within the EU and outside the EU 

in relation to fossil fuels consumed in the EU 

While  voluntary  initiatives  for  the  mitigation  of  fugitive  and  intentional  methane 
emissions from the oil and gas sector exist, their focus often remains limited to specific 
sub-sectors and instances. For example, the World Bank’s Zero Routine Flaring by 2030 
initiative has brought together governments and industry stakeholders to commit to end 
the practice at the production stage for oil. It does not address other sectors, parts of the 
supply  chain,  or  non-routine  and  safety  flaring.  For  venting,  no  comparable  initiative 
exists.  In  the  coal  sector,  positive  developments  across  Member  States  have  primarily 
been driven by regulation and subsidies, not by industry action.  

As  long  as  non-abated  fossil  energy  is  produced  and  consumed  in  the  EU,  emissions 
relating to their production and transport occurring also outside the EU will continue to 
be emitted. The import of energy into the EU remains relevant also within the context of 
achieving  the  2050  climate  neutrality  objective  as:  i)  according  to  PRIMES  modelling, 

130 Ibid 
131  Best  Practice  Guidance  for  Effective  Methane  Management  in  the  Oil  and  Gas  Sector:  Monitoring, 
Reporting  and  Verification  (MRV)  and  Mitigation,  Report  sponsored  by  the  United  Nations  Economic 
Commission for Europe and the Global Methane Initiative, August 2019. 
132 Oil & Gas Methane Partnership 2.0 (2021) http://ogmpartnership.com/  

32 / 148 

 
 
 
 
                                                           
even in 2050 the import of fossil fuels does not decline to zero (see Figure 4 with part of 
the  remaining  use  as  feedstock  for  other  purposes  than  energy  consumption),  ii)  the 
decline  is  gradual  and  emissions  linked  to  imports  in  the  upcoming  decades  could 
threaten  the  global  achievement  of  the  Paris  Agreement  climate  goals  if  left  unabated, 
and iii) existing import infrastructure is projected to be used for the import of renewable 
and  decarbonised  gases.  For  methane-based  gases,  e.g.  in  the  case  of  biomethane,  the 
same problem and problem drivers as for methane emissions from fossil gas are relevant. 
In the case of other renewable or decarbonised gases, e.g hydrogen133, relevant concerns 
remain  according  to  their  environmental  and  climate  impact  in  the  case  of  leaks  or 
intentional release. 

Figure 5:  Net imports of fossil fuels (Source: PRIMES) 

Without  EU  action,  the  external  costs  of  methane  emissions  would  risk  not  being 
sufficiently  addressed  and  no  new  incentives  would  be  set  for  international  market 
players  to  address  methane  emissions.  Voluntary  industry-led  initiatives  remain  the 
principal  action  in  addressing  methane  emissions  across  the  oil  and  natural  gas  value 
chain outside of the EU. Lack of information and adequate mitigating measures persist, 
and existing regulatory instruments remain either ineffective, incomplete or non-existent 
among a number of countries exporting fossil energy to the EU. 

In  conclusion,  under  a  scenario  of  continuation  of  the  current  situation  and  on-going 
initiatives,  the  availability  and  quality  of  information  would  improve  only  to  a  limited 
extent and more importantly,  the  overall problems and  underlying problem drivers will 
remain.   

133 As indirect greenhouse gas, hydrogen has a Global Warming Potential of 5.8 over 100 years. See 
Derwent et al. (2006) Global environmental impacts of the hydrogen economy. Int. J. of Nuclear Hydrogen 
Production and Applications. DOI: 10.1504/IJNHPA.2006.009869 

33 / 148 

 
 
 
 
 
 
 
                                                           
3.  WHY SHOULD THE EU ACT? 

  Legal basis 

The  legal  basis  of  this  initiative  is  Article  194  of  the  Treaty  on  the  Functioning  of  the 
European Union, which empowers the EU to establish the measures necessary to achieve 
the objectives of the Union with regard to policy on energy, in the context of the internal 
market and with regard for the need to preserve and improve the environment. 

Methane  is  a  greenhouse  gas  and  an  ozone-precursor  that  knows  no  borders.  When 
emitted  in  one  country,  it  will  have  a  climate  and  air  quality  impact  in  others.  The 
proposal  aims  to  create  a  new  policy  framework  facilitating  the  reduction  of  methane 
emissions, which is key to achieving the EU’s climate objectives and the zero pollution 
ambition,  building  on  and  complementing  existing  EU  law  already  partially  regulating 
methane emissions from the energy system.  

Subsidiarity: Necessity of EU action 

Methane  emissions  in  the  energy  sector  are  a  transboundary  problem  and  vary  across 
national and regional levels of the EU. They are relevant in all Member  States but to a 
varying degree, depending on their energy mix and natural endowments, e.g. how many 
underground  coalmines  are  operated  or  sealed,  how  much  fossil  gas  is  produced  or 
transported. The scale of EU gas infrastructure demonstrates the Union wide aspect, with 
roughly 190,000 km of transmission pipelines across all Member States134. 

As  highlighted  above,  the  level  of  reporting  of  emissions  differs  by  Member  State  and 
sector,  with  some  Member  States  opting  for  the  least  effort  approach,  limiting  the 
development of an  accurate measurement basis for further action. While some Member 
States  have  already  addressed  methane  emissions  mitigation  in  specific  sub-sectors, 
others do not have provisions in place or only private sector initiatives are addressing the 
issue. Private initiatives are however insufficient as main instruments to address methane 
emissions  due  to  limitations  in  scope,  participation,  and  incentivisation  in  case  of  non-
adherence.  

Diverse  national  approaches  may  lead  to  inconsistencies  in  regulatory  treatment  across 
Member  States,  increasing  the  administrative  burden  on  companies  operating  in  more 
than  one  Member  State,  potentially  impeding  the  functioning  of  the  internal  market 
through  the  creation  of  barriers  to  operators,  as  well  as  complicating  the  collection  of 
comparable data across the EU.   

While methane emissions are included under the Effort Sharing Regulation, they are one 
of a number of greenhouse gases, including CO2, nitrous oxide and F-gases for which a 
collective reduction target is defined. The persistence of methane emissions in the energy 
sector within the EU over the last decade, along with the absence of concrete measures in 

134 In addition, the length of the distribution grid has been estimated at around 1.4 million kilometres of 
pipes across the EU; see Navigant (2019) Gas for Climate. The optimal role for gas in a net zero emissions 
energy system. 

34 / 148 

 
 
 
 
 
                                                           
a substantial number of Member States, even if cost efficient, demonstrates that specific 
EU  action  can  contribute  to  further  and  more  rapid  reductions.  Conversely,  such  EU 
action to curb methane emissions in the energy sector will help Member States to achieve 
their Effort Sharing targets. 

As  the  majority  of  methane  emissions  linked  to  fossil  energy  consumed  within  the  EU 
occur  outside  the  EU,  joint  action  by  Member  States  would  be  more  likely  to  deliver 
results  for  those  parts  of  the  supply  chain  outside  of  EU  borders  and  preserve  the 
integrity  of  the  internal  energy  market.  The  challenges  in  reducing  methane  emissions 
hence  require  a  harmonised  and  coordinated  approach  and  cannot  be  addressed 
efficiently  by  individual  Member  States.  EU  action  is  thus  justified  on  grounds  of 
subsidiarity  in  line  with  Article  194  of  the  Treaty  on  the  Functioning  of  the  European 
Union. 

Subsidiarity: Added value of EU action 

The  reduction  of  methane  emissions  across  the  European  Union  would  benefit  from  a 
homogeneous  policy  approach  at  the  EU  level  given  the  strong  interlinkage  between 
Member  States  through  cross-border  infrastructure  –  in  this  context  particularly  gas 
infrastructure – and the integrated EU energy market. The impacts of measures aimed at 
innovation,  cost-
methane  measurement  and  mitigation  and  related  effects  on 
effectiveness,  and  a  level-playing  field  in  maintenance  of  a  well-functioning  internal 
market warrant coordination across Member State borders. Coordinated EU policies have 
a much higher chance of leading to further reductions in methane emissions in the energy 
sector. Coordinated action at the EU level furthermore facilitates the full consideration of 
the different capabilities to act among Member States and private entities. It also affords 
operators the benefits of a single regulatory regime, facilitating adherence and reducing 
administrative  burden  relative  to  the  application  of  fragmented  rules  across  Member 
States.  

The EU and its Member States are part of a global oil market in which collective action 
carries more weight vis-à-vis exporters than individual national measures. The EU is also 
the  biggest  gas  import  market  in  the  world  and  can  thus  influence  global  methane 
emissions through its purchasing power, provided a harmonised approach towards such 
imports.  The  EU  gas  market  allows  for  flexible  and  short-term  (spot)  trading  of  gas. 
While  long-term  contracts  with  specific  suppliers  still  exist,  the  ‘hydrogen  and  gas 
market decarbonisation package’, which is part of the Fit-for-55 package, addresses such 
contracts and seeks to limit their duration to avoid locking-in fossil gas use and to send a 
signal  to  decarbonise  the  gas  sector  in  line  with  the  European  Green  Deal.  Hence,  an 
increasing  part  of  imports  may  become  subject  to  methane  emission  considerations  in 
purchasing decisions. 

EU-level  methane  policy  adds  significant  value  for  international  climate  action.  By 
working to develop a legislation to minimize methane emissions in the energy sector, the 
EU is sending a strong political signal to external actors, increasing the awareness of the 
harmful effects of methane emissions on the climate. This signal will not only encourage 
EU partners to address the problem of methane emissions in the energy sector, but also 

35 / 148 

 
 
 
 
 
lead to the creation of an international partnership and thus give the EU a leadership role 
in addressing methane emissions. 

The    initiative    is    fully    in    line    with    Article   37    of    the    Charter    of    Fundamental  
Rights    of    the    European    Union,    which  requires  that  a  high  level  of  environmental 
protection  and  the  improvement  of  the  quality  of  the  environment  must  be    integrated  
into  the  policies  of  the  Union  and  ensured  in  accordance  with  the  principle  of 
sustainable development. 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

  General objectives 

The general objective of the initiative is, in the context of the functioning of the internal 
market  for  energy  and  while  ensuring  security  of  supply  in  the  Union,  to  preserve  and 
improve the environment by reducing methane emissions from fossil energy produced or 
consumed in the EU. This objective contributes to the ‘Fit for 55’ package135, specifically 
to the greenhouse gas emissions reduction targets of at least 55% by 2030 compared to 
1990 as set  out  by  the  European Climate  Law Regulation and to  the  EU’s objective of 
achieving climate neutrality by 2050.  

Specific objectives 

To achieve the general objective, three specific objectives are addressed by this initiative:  

i. 

Improve  the  accuracy  of  information  on  the  main  sources  of  methane 
emissions associated with energy produced and consumed within the EU. The 
goal is to ensure the availability of source-level data and robust quantification 
of emissions, and thereby increase the reliability of reporting – including the 
reporting of GHG inventories data to the UNFCCC – as well as the scope for 
appropriate measures for mitigation. This specific objective creates the basis 
for future improvements on specific objective ii).  

ii.  Ensure  further  effective  mitigation  of  methane  emissions  across  the  energy 
supply  chain  in  the  EU.  This  specific  objective  addresses  the  market  failure 
leading to insufficient mitigation of methane emissions by companies. 

iii.  Reduce methane emissions related to fossil energy imported to the EU. As the 
majority  of  methane  emissions  linked  to  fossil  energy  consumed  within  the 
EU  occur  outside  the  EU,  this  specific  objective  seeks  to  tackle  methane 
international 
emissions 
organisations, taking into account the security of supply  aspects of the EU’s 
high  import  dependency  for  fossil  fuels,  a  large  share  of  methane  emissions 
linked specifically to EU consumption occurring outside EU borders, and the 

in  cooperation  with  partner  countries  and 

135 See Annex 5 for interlinkages with other initiatives 

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market  failures  rooted  in  the  absence  of  information  on  emissions  for 
importers and of market signals for exporters. 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? 

  What is the baseline from which options are assessed? 

In the baseline, only current EU legislation  addressing methane emissions linked to the 
energy sector remain in force (see Section 2.2.2 and Table 2), thereby leaving a large part 
of those emissions outside the scope of EU regulation.  

As regards measurement, reporting and verification of methane emissions within the EU, 
existing legislation does not provide sufficient obligations for accurate information on the 
full  extent  of  methane  emissions  in  the  energy  supply  chain. The  reporting  of  methane 
emissions  is  part  of  the  greenhouse  gas  emission  reporting  under  the  EU  Climate 
Monitoring  Mechanism,  followed  by  integrated  reporting  system  of  the  Governance 
Regulation136,  and  the  European  Pollutant  Release  and  Transfer  Register  (E-PRTR).137 
Reporting  continues  to  be  based  on  the  methodologies  of  the  UNFCCC  Reporting 
Guidelines (see Section 2.2.1 and Box 2), including the use of  default emission factors 
and  the  lack  of  source-level  measurement.  As  outlined  above,  this  reporting  likely 
underestimates  methane  emissions  along  the  fossil  energy  supply  chain,  as  the  data 
cannot be considered complete or sufficiently reliable and there are no specific higher tier 
reporting obligations at the EU level.  

As  also  discussed  in  more  detail  in  Section  2.3.2,  Voluntary  industry  initiatives  to 
improve reporting and commit to mitigation of methane emissions are a positive step, but 
by their voluntary nature are unlikely to become exhaustive sources of transparency and 
abatement for all emissions in the fossil energy supply chain.  

Overall,  in  the  baseline,  information  on  methane  emissions  from  the  energy  sector 
remains  inaccurate  in  national  reporting,  as  well  as  incomplete  in  industry  reporting. 
Such lack of (accurate) information creates barriers for adequate mitigation of emissions, 
with implied economic and social costs if their unabated contribution to global warming 
continues. 

Current  EU  regulations,  as  would  continue  to  apply  in  the  baseline,  exclude  concrete 
mitigation  of  methane  emissions  among  substantial,  methane-emitting,  parts  of  the 
energy supply chain and national regulations remain isolated and limited to specific (sub-
) sectors, leading to continued unabated emissions, additional barriers for private sector 

136 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the 
Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) 
No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 
2009/73/EC,  2010/31/EU,  2012/27/EU  and  2013/30/EU  of  the  European  Parliament  and  of  the  Council, 
Council  Directives  2009/119/EC  and  (EU)  2015/652  and  repealing  Regulation  (EU)  No  525/2013 of  the 
European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1) 
137  Regulation  (EC)  No  166/2006  of  the  European  Parliament  and  of  the  Council  of  18  January  2006 
concerning the establishment of a European Pollutant Release and Transfer Register and amending Council 
Directives 91/689/EEC and 96/61/EC (OJ L 33, 4.2.2006, p. 1) 

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providers  of  mitigation  solutions,  as  well  as  long-term  adverse  health  outcomes  for 
citizens. 

As described in Sections 2.2.3 and 2.3.3, for methane emissions occurring outside of the 
EU but specifically linked to fossil energy consumed in the EU, at best partial and likely 
incomparable  information  would  be  available  in  the  baseline  as  regards  imports 
depending  on  domestic  measures  taken  by  exporting  countries  and  their  submission  of 
greenhouse gas inventories to the UNFCCC.  

In partnership with the United Nations Environmental Programme (UNEP), the Climate 
and Clean Air Coalition (CCAC) and the International Energy Agency, the Commission 
is  supporting  the  establishment  of  an  independent  international  methane  emissions 
observatory anchored in a United Nations framework, tasked with collecting, reconciling, 
verifying and publishing anthropogenic methane emissions data at a global level. Support 
for setting up the  IMEO was subsequently provided by the Council in its January 2021 
conclusions on Climate and Energy Diplomacy138. While the IMEO is in the process of 
being set up, it has yet to be formally endorsed by energy partner countries to the EU, its 
financing  has  not  been  fully  secured  and  the  exact  scope  of  its  operations  need  to  be 
defined and agreed.  

The supporting function of the International Methane Emissions Observatory depends on 
the  EU,  and 
further  commitments  and  contributions 
implementation of appropriate measures such as  the Methane Supply  Index. As regards 
the costs of the IMEO, it has benefitted from 10 Million Euros committed from the EU 
budget. Further funding is still being sought from voluntary donations from governments 
and independent organisations willing to support such a project. 

from  partners  outside 

While  the  continued  implementation  of  the  Paris  Agreement  may  lead  to  some 
improvements  in  reporting  and  mitigation  of  emissions,  the  current  level  of  methane 
emissions and scientific projections do not suggest sufficient progress. While additional 
public  awareness  may  result  from  improved  data  becoming  available  from  satellite 
detection technology, for many exporting countries incentives may remain insufficient to 
(further) reduce methane emission levels linked to fossil energy destined for consumption 
within the EU.  

  Description of the policy options 

The policy options are structured along the following three policy areas building on the 
problem drivers and the intervention logic diagram: 

  Policy  area  1:  Improving  measuring  and  reporting  of  methane  emissions  in  the 

EU 

  Policy area 2: Mitigation of methane emissions in the EU 

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  Policy area 3: Measuring, reporting and mitigation of methane emissions linked 

to EU fossil fuel consumption but occurring outside the EU 

5.2.1.  Targeted entities 

One element which is common to all of the options assessed below across all three policy 
areas  is  that  the  targeted  entities  are  companies  in  the  energy  sector.  These  include  all 
companies involved at some point in the energy value chain in the relevant energy sub-

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sectors  (depending  on  the  option,  this  includes  either  oil  and  gas  or  coal  or  sectors 
explicitly  mentioned  as  being  included  under  the  term  ‘indirect  emissions’)  which  are 
responsible for an activity  which  is  known to  or  has  the potential  to  leak, vent  or flare 
methane. Where an option includes  an obligation, this means that the obligation would 
fall on such a company. When ownership of the asset in question cannot be attributed to 
any one company, for instance in the case of an abandoned mine or well, the obligation 
would fall on the country in whose jurisdiction the asset is located. 

5.2.2.  Policy  area  1:    Improving  measuring  and  reporting  of  methane 

emissions in the EU 

This  policy  area  considers  measures  to  improve  measuring  and  reporting  of  methane 
emissions in the energy sector. In the context of greenhouse gas emission measuring and 
reporting, the term ‘MRV’ is used. MRV typically covers three categories of activities: i) 
monitoring, which encompasses direct measurements and other methods for quantifying 
emissions;  ii)  reporting,  which  covers  compilation  of  estimated  emissions  in  specific 
formats for internal  use or external circulation; and iii)  verification  of emissions and/or 
emission reductions, often by a third party, for internal purposes or as required by public 
regulations139.  

Option 1.0: Business as usual scenario 

In the baseline, no additional policies are developed. Refer to sections 2.2.2 and 5.1 for a 
description  of  how  measuring  and  reporting  of  methane  emissions  is  currently  being 
regulated in the EU through the EU Climate Monitoring Mechanism and the integrated 
reporting of the Governance Regulation, the E-PRTR and for a description of the OGMP 
voluntary initiative by the oil and gas industry. 

Option  1.1:  Mandatory  measuring  and  reporting  of  oil  and  fossil  gas  companies. 
Obligation on oil and fossil gas companies to carry-out direct source-level measurements 
and  reporting  of  direct  emissions  of  methane  by  making  relevant  parts  of  the  OGMP 
standard legally binding to economic activities in the EU territory.  

139  Best  Practice  Guidance  for  Effective  Methane  Management  in  the  Oil  and  Gas  Sector:  Monitoring, 
Reporting  and  Verification  (MRV)  and  Mitigation,  Report  sponsored  by  the  United  Nations  Economic 
Commission for Europe and the Global Methane Initiative, August 2019. 

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The OGMP 2.0 framework has five levels of reporting. Source-level reporting begins at 
level 3, which is considered comparable with UNFCCC tier 3. It allows generic emission 
factors to be used. OGMP 2.0 level 4 reporting requires direct measurements of source-
level methane emissions. It allows the use of specific emission factors. OGMP 2.0 level 5 
reporting  requires  the  addition  of  complementary  site-level  measurements.  In  addition, 
the OGMP 2.0 framework requires companies to report direct measurements of methane 
emissions  within  three  years  of  joining  OGMP  2.0  for  operated  assets  and  within  five 
years for non-operated assets.  Building on the approach taken in OGMP 2.0 with regard 
to source-level reporting and taking into account that a large number of Union companies 
had  already  signed  up  to  OGMP  2.0  in  2021,  Union  operators  would  be  required  to 
deliver  direct  source-level  measurements  of  their  emissions  within  24  months  for 
operated assets and within 36 months for non-operating assets.  

A  site-level  measurement  is  a  top-down  measurement  (as  opposed  to  source-level 
measurement,  considered  a  bottom-up  measurement),  and  typically  involves  the  use  of 
sensors mounted on a mobile platform (such as  on vehicles, drones,  aircrafts or boats), 
satellites,  or  other  means  to  capture  a  complete  overview  of  emissions  across  an  entire 
site. This quantification of site-wide emissions, which is independent from source level 
quantification,  allows  assessment  and  verification  and  reconciliation  of  source-level 
estimates  aggregated  by  site,  thereby  providing  improved  confidence  in  reported 
emissions.  

The  approach  taken  in  OGMP  2.0,  of  requiring  site-level  measurements  to  reconcile 
source-level measurements, is the approach taken here as well. 

Option  1.2:  Mandatory  measuring  and  reporting  of  oil,  fossil  gas  and  coal 
companies. As per 1.1 but widening the scope to include coal methane emissions. OGMP 
does not cover coal emissions. 

Option  1.3:  Mandatory  measuring  and  reporting  of  direct  and  indirect  emissions. 
As option 1.2 but widening the scope further to include indirect emissions, which occur 
from final end use/consumption of oil, fossil gas or coal. Such emissions are not covered 
by the OGMP. 

Some  oil  and  gas  companies  are  already  voluntarily  reporting  such  indirect  emissions, 
and IPIECA (the global oil and gas industry association for advancing environmental and 
social performance) recommends that oil and gas companies undertake reporting on the 
basis of an existing international standard – the GHG Protocol scope 3 (scope 3 refers to 
indirect emissions) reporting standard140141. This option proposes to set binding rules on 
companies to report their indirect emissions based on that standard.  

5.2.3.  Policy area 2 - Mitigation of methane emissions in the EU 

140 IPIECA Sustainability reporting guidance for the oil and gas industry, March 2020. 
141  GHG  Protocol  establishes  global  standardized  frameworks  to  measure  and  manage  greenhouse  gas 
(GHG)  emissions  from  private  and  public  sector  operations,  value  chains  and  mitigation  actions. 
https://ghgprotocol.org/standards/scope-3-standard 

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Options  2.1  to  2.3  below  contain  best  practice  methane  abatement  measures 
covering key aspects of the main prescriptive measures typically used to mitigate 
methane  emissions  in  the  oil  and  fossil  gas  sectors,  which  includes  methane 
leakage detection and repair, and limits on venting and flaring.  

Option 2.0: BAU scenario 

In the baseline, no additional policies are developed. Refer to sections 2.2.2 and 5.1 for a 
description  of  how  methane  emission  abatement  is  currently  being  regulated  in  the  EU 
though  the  ESR,  the  IED,  Ecodesign  and  Energy  labelling  regulations  and  individual 
Member States regulations. 

Option 2.1: Commission guidance on mitigation of methane emissions in the oil and 
fossil gas sectors. As explained previously, several voluntary initiatives to abate methane 
emissions exist in the oil and gas sectors (see section  2.2.2 for a detailed list of oil and 
fossil  gas  sector  initiatives).  These  are  based  on  best  practice  methane  abatement 
measures  covering  key  aspects  of  the  main  prescriptive  measures  typically  used  to 
mitigate  methane  emissions  in  the  oil  and  fossil  gas  sectors,  which  includes  methane 
leakage  detection  and  repair  (LDAR)  surveys  and  limits  on  venting  and  flaring.  In 
contrast to the oil and gas sectors, there are no industry-wide voluntary schemes to abate 
methane  emissions  in  the  coal  sector  on  which  Commission  guidance  could  be  based. 
This option therefore only covers the oil and gas sectors.  

This  option  includes  Commission  guidance  based  on  a  combination  of  best  practices 
contained  in  such  voluntary  initiatives  as  well  as  from  existing  methane  regulations 
considered state of the art, together with  detailed technical  input received from  various 
stakeholders in response to the Public Consultation for this initiative. 

Key aspects of such guidelines would be as follows: 

Periodic Leak Detection and Repair Surveys: 

Methane emissions from leaks are most commonly reduced LDAR surveys, carried out to 
identify leaks and followed by repair of such leaks. Operators should therefore conduct 
periodic LDAR surveys and these should also cover surveying of components that vent 
methane, to survey for unintentional venting of methane.  

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Guidance  would  include  minimum  requirements  for  LDAR  surveys,  while  leaving  an 
adequate  degree  of  flexibility  to  Member  States  and  operators.  New  technologies  and 
detection methods continue to emerge and Member States should encourage innovation 
in this sector, so that the most accurate and cost-effective methods can be adopted. 

LDAR  surveys  should  reflect  a  number  of  good  practices.  LDAR  surveys  should  be 
primarily aimed at finding and fixing leaks, rather than quantifying them, and those areas 
with a higher risk of leaks should be checked more frequently; the frequency of surveys 
should  be  guided  not  only  by  the  need  to  repair  components  from  which  methane  is 
escaping  above  the  methane  emission  threshold  but  also  by  operational  considerations, 
taking into account risks to safety. Thus, where a higher risk to safety or higher risk of 
methane losses is identified, the competent authorities should be allowed to recommend a 
higher  frequency  of  surveys  for  the  relevant  components;  all  leaks  irrespective  of  size 
should  be  recorded  and  monitored,  as  small  leaks  can  develop  into  larger  ones;  leak 
repairs  should  be  followed  by  confirmation  that  they  have  been  effective;  in  order  to 
allow  for  future,  more  advanced  methane  emissions  detecting  technologies  to  be  used, 
the  size  of  methane  loss  at  or  above  which  a  repair  is  warranted  should  be  specified, 
while allowing operators the choice of detection device. 

Limiting venting and flaring 

Best practice regulatory approaches to limit venting consist of prohibiting it except in the 
case of emergencies, malfunction or during certain specific events where some venting is 
unavoidable. With regards  to  flaring,  when carried out  during the normal  production of 
oil or fossil gas and as a result of insufficient facilities or amenable geology to re-inject 
methane, utilise it on-site, or dispatch it to  a market,  it is  considered routine flaring.  In 
this option, flaring would be recommended when it is the only alternative to venting and 
where  venting  is  not  prohibited142.  Re-injection,  utilisation  on-site  or  dispatch  of  the 
methane to a market should always be preferable to flaring  -  and therefore venting  - of 
methane. 

Exceptions where venting could be allowed (such as emergencies, malfunction or during 
certain events where some venting is unavoidable) are necessary to ensure that measures 
prohibiting venting do not contribute to increases in risk to safety. Thus measures must 
allow  venting  to  occur  in  the  case  of  temporary,  unexpected,  infrequent  situations  in 
which  methane  emissions  are  unavoidable  and  necessary  to  prevent  an  immediate  and 
substantial  adverse  impact  on  human  safety,  public  health  or  the  environment.  Also 
venting  should  be  allowed  in  the  case  of  malfunctions,  that  is  to  say  in  the  case  of  a 
sudden, unavoidable failure or breakdown of equipment beyond the reasonable control of 
the operator that substantially disrupts operations.  

Option 2.2: Mandatory measures on mitigation of methane emissions in the oil and 
fossil gas sectors.  As per option 2.1 but instead of issuing guidance, all of the measures 
listed above would be mandatory. 

142 Venting is more harmful to the environment than flaring as the released gas typically contains high-
levels of methane, whereas flaring oxidises methane into carbon dioxide. 

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Option  2.3:  Mandatory  measures  on  mitigation  of  methane  emissions  in  the  oil, 
fossil gas and coal sectors as well as indirect emissions. As per option 2.2 but with an 
increased  scope  of  emissions,  covering  a)  coal  from  both  operating  and  non-operating 
mines, and b) indirect emissions from the oil, fossil gas and coal value chains. 

Although unlike the oil and gas sectors, there are no industry-wide voluntary schemes to 
abate methane emissions in the coal sector on which to base either Commission guidance 
or mandatory measures, this option assesses the merits of including coal in its scope of 
mandatory  measures.  On  top  of  the  oil  and  gas  measures  included  in  option  2.2,  this 
option  therefore  includes  specific  coal  sector  methane  abatement  measures.  These 
measures include the  requirement to capture methane and to use it on-site or dispatch it 
to  market  rather  than  vent  it.  It  however  makes  an  exception  in  the  case  of  very  low 
concentrations of methane emanating from ventilation shafts,  allowing methane in such 
instances to be oxidated. As regards non-operating mines, it requires sealing of mines to 
prevent methane from escaping.  

Option 2.4: Legislative measure to achieve a certain reduction in methane emissions. 
Instead of specific measures prescribing how to reduce methane emissions in the energy 
sector (as per options 2.2 and 2.3), another approach to mitigate methane emissions is via 
outcome-based requirements which require obligated entities to meet a specific emissions 
target or standard, but without specifying how to meet it. 

5.2.4.  Policy  area  3  –  Measuring,  reporting  and  mitigation  of  methane 
emissions  linked  to  EU  fossil  fuel  consumption  but  occurring 
outside the EU 

While under policy areas 1 and 2 only methane emissions linked to the energy sector and 
occurring  within  the  EU  are  considered,  policy  area  3  sets  out  various  policy  options 
which could be used to include all methane emissions linked to the consumption of fossil 
fuels in the EU. These options therefore envisage measures on non-EU actors exporting 
fossil energy to the EU market.  

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Option 3.0: BAU scenario 

The situation in the baseline in this policy area is described in detail in sections 2.2.3 and 
5.1.  which  highlights  the  low  level  of  accuracy,  as  well  as  high  levels  of  methane 
emissions from countries that are key exporters of fossil energy to the EU. 

Option 3.1: Mandatory measuring, reporting and mitigation of fossil energy sector 
emissions. Mirrors options 1.2 and 2.3 from policy areas 1 and 2, but applying them also 
to all methane emitting fossil energy consumed in the EU, including imported energy. It 
therefore  consists  of  an  obligation  on  coal,  oil  and  fossil  gas  companies  to  carry-out 
source-level  measurements  and  reporting  of  direct  emissions  of  methane  as  well  as 
obligations  covering  key  aspects  of  the  main  prescriptive  measures  typically  used  to 
mitigate  methane  emissions  in  the  coal,  oil  and  fossil  gas  sectors,  which  includes 
obligations on methane leakage detection and repair and limits on venting and flaring. 

Option 3.2: Transparency measure on MRV and mitigation of methane emissions of 
fossil fuels consumed in the EU. With the aim of achieving the same results as 3.1 but 
based on influencing sourcing decisions through greater transparency on emissions  and 
including  the  development  of  an  EU  initiative  to  develop  a  global  super  emitter 
monitoring  tool  as  an  incentive  for  compliance.  It  is  composed  of  two  complementary 
parts: 

1.  Creation of a transparency database for fossil energy imports into the EU, containing 

the following, cumulative, requirements: 

 

Information  provided  by  operators  as  regards  efforts  to  measure  and  report  as 
well as reduce their methane emissions. Indication of regulatory equivalence with 
EU  legislation,  including  secondary  legislation,  on  measurement,  reporting  and 
mitigation  of  methane  emissions  (via  leakage  detection  and  repair  programmes 
and limits to venting and flaring) in the country of origin supplying the oil/fossil 
gas/coal to the EU. 

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  Until regulatory equivalence is ensured, indication that the fossil energy is being 
purchased from a company that has signed up to the OGMP for oil and/or fossil 
gas  companies,  and  for  coal,  at  a  later  date,  according  to  agreement  on  MRV 
methodology developed under tertiary EU legislation 

2.  Setting-up of methane emitter global methane monitoring tool 

Creation of global methane monitoring tool based on inputs from Copernicus as well as 
other satellites and services which will regularly publish the results of aerial monitoring 
of  high  methane  emitters  from  around  the  world  and  which  will  provide  continuous 
updates on the magnitude, recurrence of high methane-emitting  sources and their exact 
location.  

Option 3.3: Legislative measure to achieve a certain reduction in methane emissions. 
Mirrors option 2.4 but applying it also to oil, fossil gas and coal imported to the EU; it 
would therefore impose outcome-based requirements which require obligated entities to 
meet a specific emissions target or standard, but without specifying how to meet it. 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

The analysis of the impacts of the options is carried out in two principle ways: 

Environmental and social impacts 

As methane emissions have a direct impact on climate change, any mitigation of methane 
emissions has a direct positive environmental impact both in terms of climate change, as 
well as in terms of air pollution (as methane is a precursor to ozone). Methane is also an 
air pollutant, therefore the social impacts are interpreted as the indirect impacts on human 
health. Less methane emissions lead to reduced air pollution and less health issues and to 
slower  climate  change.  Based  on  these  considerations,  the  environmental  and  social 
impacts are closely related and are assessed together. 

Under  policy  areas  2  and  3,  for  which  quantitative  estimations  are  available, 
‘environmental  and social  impacts’ include the amount of methane emission reductions 
that result from the measures associated to the level of  abatement costs (at ‘negative or 
zero’  costs,  at  equal  or  less  than  ‘low  costs’  or  at  less  than  the  sum  of  ‘social  and 
environmental  costs  of  methane’  –  see  section  6.2.1  for  full  definitions  and  further 
explanation)  that  will  result,  or  are  most  likely  to  result,  from  choosing  that  option. 
Estimations  of  the  various  environmental  and  social  benefits  associated  with  those 
amount of methane emission reductions are also provided.  

Economic impacts and administrative burden 

For policy area 1, the assessment of the economic impacts and the administrative burden 
is  based  essentially  on  information  received  from  representatives  from  the  sectors 
included  in  the  scope  assessed  in  the  options.  However,  the  information  obtained  was 
only partial and mostly qualitative.  

Under policy areas 2 and 3, for which quantitative estimations are available, the sections 
on  ‘economic  costs  and  administrative  burden’  assess  which  shares  of  reductions  are 

46 / 148 

 
 
 
achievable  at  different  levels  of  cost-effectiveness  (cost-effective  to  the  company  vs. 
cost-effective to society – factoring in the external benefits) and identifies the associated 
list of measures through which those reductions can be achieved. 

In the case of both GAINS projections (policy area 2) and IEA estimations (policy area 
3),  abatement  cost  estimations  for  each  individual  measures  are  in  terms  of  net  costs. 
These  abatement  costs  consider  the  cost-savings  of  utilising  recovered  gas  after 
deducting revenues from investment and operational costs. This includes the sum of fixed 
investment costs, labour costs, non-labour related operation and maintenance costs, and 
energy-related cost savings (methane sold on the market as natural gas).  

Policy  area  1:    Improving  measuring  and  reporting  of  methane 
emissions in the EU 

6.1.1.  General considerations for policy area 1 

Environmental and social impacts 

More  precise  data  and  accurate  measurements,  monitoring,  reporting  and  verification 
(MRV)  of  methane  emissions,  do  not  per  se  have  a  direct  effect  on  the  amount  of 
emissions,  however  they  provide  the  data  necessary  to  accurately  determine  the  causes 
and magnitude of methane emissions and to monitor the impact of the mitigation actions 
and the basis for possible additional future policy action if deemed necessary. Achieving 
robust  MRV  is  therefore  an  essential  part  of  the  emission  abatement  process,  and 
consequently its benefits as well as costs should be considered also in terms of the more 
effective  abatement  of  methane  emissions  that  it  contributes  towards,  including  the 
associated environmental and social benefits of that abatement.   

Economic impacts  

The  main  distinguishing  feature  under  policy  area  1  are  the  economic  impacts  on 
operators, which is analysed below in more detail. As observed above for environmental 
impacts,  the  costs  of  achieving  robust  MRV  should  be  considered  also  in  terms  of  the 
more  effective  abatement  of  methane  emissions  that  it  contributes  towards.  This  is 
especially  important  to  recognise  given  that,  irrespective  of  the  exact  levels  of  costs  to 
companies  and  administrations  of  achieving  robust  MRV,  these  would  be  more  than 
adequately covered by the level of net benefits (in money terms) of abatement of those 
emissions that robust MRV would bring to light. Indeed, as revealed later in the case of 
both  EU  or  non-EU  emissions  (in  policy  areas  2  and  3),  the  net  benefits  of  methane 
abatement measures available even at zero or negative costs to companies are substantial 
when taking into account also the costs to society of methane emissions. 

6.1.2.  Option 1.0: Business as usual  

Environmental and social impacts 

47 / 148 

 
 
 
 
 
Continuing with a business as usual scenario (option 1.0) implies continued reliance on 
national inventories data for information on methane emissions in the EU energy sector 
which does not provide accurate enough information (in the form of  direct source-level 
measurements)  for  effective  mitigation.  Direct  source-level  measurement  data  will 
become available via OGMP, but for now it only covers 30% of the (global) oil and gas 
industry. 

Emissions from coal would not be covered as OGMP covers only direct emissions from 
oil and gas.  

Environmental  monitoring  with  satellites  will  continue,  it  would  however  not  be 
sufficiently granular in the near future to provide reliable  and sufficiently precise MRV 
information. 

Therefore  from  an  environmental  and  social  impacts  perspective,  the  availability  of 
information  would  remain  limited  and  could  not  provide  an  accurate  basis  for  further 
policy action.  

Economic impacts  

In terms of economic impacts and administrative burden, EU oil, gas and coal companies 
would  continue  incurring  current  reporting  costs  and  administrative  burden  as  part  of 
their reporting of emissions data (for all greenhouse gases, not just methane) to national 
authorities in the context of national inventories greenhouse gas data reporting.  

National authorities already play a data collection and verification role in the context of 
national  greenhouse  gas  inventory  reports  as  well  as  the  European  Pollutants  Transfer 
Registry. Inventory reports cover all greenhouse gases (not just methane) and all emitting 
sectors (not just parts of the energy sector).  

In the case of oil and fossil gas companies, many such EU companies have signed up to 
OGMP, meaning that they will already be incurring the costs of OGMP reporting143. 

In  conclusion,  under  a  business  as  usual  scenario,  while  there  are  no  significant 
economic/administrative  costs,  the  envisaged  action  would  not  allow  to  meet  specific 
objective 1, in terms of accuracy of information on the quantities and main sources of 
methane emissions associated with energy produced and consumed within the EU. 

6.1.3.  Option  1.1:  Mandatory  measuring  and  reporting  of  oil  and  fossil 

gas companies 

Environmental and social impacts 

143 http://ogmpartnership.com/partners  

48 / 148 

 
 
 
 
                                                           
Such  a  measure  could  meet  the  specific  objective  of  improving  the  accuracy  of 
information to a large extent, provided that: (i) it is designed to require energy companies 
to measure and report methane emissions by individual  source, (ii) it includes effective 
verification by a competent authority/third party  of those reported emissions and (iii) it 
makes  aggregated  data  available  to  Member  States  to  improve  the  accuracy  of  their 
inventories reporting to UNFCCC. 

The OGMP 2.0 framework meets the above criteria. It is specifically designed for the oil 
and  gas  sector  and  applies  to  all  segments  of  the  oil  and  gas  sector  where  material 
quantities  of  methane  are  considered  to  come  from.  It  is  a  global  standard,  with  66 
member companies with assets in five continents representing 30% of the world’s oil and 
gas  production144.  Transposing  relevant  parts  of  OGMP  2.0  into  EU  law  would  oblige 
companies to  undertake  source-level  measurements  of methane emissions  and to  report 
them according to specific criteria tailored to the realities of oil and gas companies across 
the supply chain, and it is UNFCCC tier 3 compliant. It would hence yield reliable and 
robust  data  that  would  form  sufficient  basis  for  monitoring  methane  emissions  and  if 
necessary to build additional action to curb emissions.  

Economic impacts  

As  regards  the  economic  impacts,  no  public  figures  exist  on  the  additional  costs  and 
administrative burden of putting in place a methane MRV and no such assessment was 
undertaken by UNEP or the CCAC in the context of setting up the OGMP.  

For the OGMP signatory companies there would be no additional cost compared to the 
baseline. In order to try to estimate the cost to companies that are not already members of 
OGMP, the Commission approached the industry directly to try to obtain information via 
a survey to OGMP member companies, which was transmitted via the main oil and gas 
associations  (the  International  Oil  and  Gas  Production  Association  (IOGP),  Eurogas, 
GIE-Marcogaz-ENTSOG) in May 2021 (the results of the survey are included in Annex 
2). 

Of  the  36  companies    that  responded  to  the  questionnaire,  only  five  reported  having 
estimated  how  much  signing  up  to  the  OGMP  would  add  to  their  regulatory 
implementation  costs  and  only  three  companies  provided  estimations,  but  those  replies 
were only partial,  thus  preventing an assessment of the ‘extra’ cost  or burden for those 
companies. Views were  split  as regards the estimated or perceived additional costs and 
administrative  burden,  however  IOGP  considers  that  while  the  additional  costs  are  not 
negligible, they are also not significant (this was further emphasised in an exchange with 
the organisation, which confirmed that industry is in full support of the OGMP 2.0 MRV 
standard  and  that  the  additional  costs  and  administrative  burden  linked  to  its 
implementation  would  be  manageable  for  the  industry).  In  addition,  10  respondents 
consider that the overall benefits outweigh the extra cost and administrative burden at the 
level of the company. A number of the responses also commented that even if they do not 

144 Ibid. 

49 / 148 

 
 
 
 
 
                                                           
consider that the benefits will outweigh the costs at the level of the company, they still 
consider that there are significant benefits to society.  

In their response, regulated companies indicated that if the MRV costs are not recognised 
in  the  regulated  tariffs,  the  benefits  would  not  outweigh  the  costs.  For  regulated 
companies, the Council of European Energy Regulators (CEER) has expressed the view 
that TSOs, storage operators and LNG operators, as well as DSOs above a size threshold, 
should be obliged to measure and report their methane emissions according to a standard 
methodology, and that national regulatory authorities are willing to recognize efficiently 
incurred costs for regulated entities145.  

As  regards  national  authorities,  as  described  under  the  business  as  usual  scenario,  they 
already play a data collection and verification role. For this reason, the incremental costs 
and  administrative  burden  to  national  authorities  of  verification  in  the  context  of  the 
MRV part of these proposals should be minimal. 

Responses from stakeholder consultations and European Parliament 

In the public feedback on the Roadmap to the Communication on Methane, not only was 
there  widespread  support  expressed  by  all  categories  of  stakeholders  for  developing  a 
robust MRV standard for methane emissions in the energy sector146 but in the oil and gas 
industry joint responses the OGMP framework was recommended as the basis on which 
such  a  standard  should  be  developed147.  This  widespread  support  was  mirrored  in  the 
more recent open public consultation on the methane legislative proposals, with 78% of 
responses  in  support  of  basing  the  oil  and  gas  part  of  the  MRV  proposal  on  the 
methodology  of  the  OGMP148,  which  is  also  backed  by  all  the  EU  oil  and  gas  trade 
associations. Furthermore, the European Parliament offers explicit support for ambitious 
MRV  requirements  in  its  resolution  of  21  October  2021  on  an  EU  strategy  to  reduce 
methane emissions149. The resolution “underlines the importance of adopting mandatory 
MRV for all methane-emitting sectors, including through the adoption of rules, standards 
and methodologies” and provides specific support for basing it on OGMP, as it “calls on 
the Commission to propose legislation for the energy sector with binding rules on MRV, 
building on the methodology of the Oil and Gas Methane Partnership”.  

145 Presentation by CEER at the 16th of March EC workshop on a regulatory approach on leak detection 
and repair. 
146 Explictly supported by the following NGOs: Environmental Defense Fund,  Climate  Action Network,  
an  NGO  coalition  covering  170  member  organisations,  and  industry:  Shell,  IOGP  (the  international 
upstream  oil  and  gas  federation),  Eurogas  (the  EU  federation  representing  the  European  gas  wholesale, 
retail and distribution sectors) 
147  Recommended  by  IOGP  (the  international  upstream  oil  and  gas  federation)  and  Eurogas  (the  EU 
federation representing the European gas wholesale, retail and distribution sectors). 
148 Even some NGOs (Climate Action Network and Climate Action Task Force) that responded no to the 
question  stated  in  their  answers  that  OGMP  should  be  enshrined  into  EU  law,  though  had  some 
reservations on certain elements of the framework.  
149 2021/2006(INI) 

50 / 148 

 
 
 
 
 
                                                           
A  number  of  stakeholders  have  however  expressed  the  opinion  that  the  OGMP 
framework  lacks  certainty  and  clarity  regarding  verification/compliance.  The  OGMP 
framework  gives  the  role  of  verification  only  to  the  International  Methane  Emissions 
Observatory  (IMEO).  This  would  however  be  overcome  by  following  the  example  of 
existing  EU  MRV  legislation  such  as  the  Monitoring  Mechanism  Regulation  (repealed 
by the Governance Regulation) or the European Pollutant Release and Transfer Register, 
and  add  an  intermediary  role  for  competent  authorities  before  final  check  by  the 
IMEO150. The OGMP aggregates all data and only publishes a summary of the data on an 
annual  basis.  To  still  ensure  verification,  the  proposal  would  require  access  to  direct 
source-level  data,  while  ensuring  respect  for  confidential  company  data  and  data 
protection  requirements151.  In  addition,  Member  States  would  be  required  to  lay  down 
rules  on  penalties  applicable  to  infringements  of  the  provisions  and  take  all  measures 
necessary to ensure that they are implemented. The penalties provided for would have to 
be effective, proportionate and dissuasive and may include fines. 

In  conclusion,  mandatory  measuring  and  reporting  of  methane  emissions  by  oil  and 
fossil  gas  companies  within  the  EU  territory  would  achieve  objective  1,  thereby 
improving  the  accuracy  of  information  on  the  main  sources  of  methane  emissions 
associated with energy produced and consumed within the EU. This would be achieved 
at moderate economic impacts. 

6.1.4.  Option  1.2:  Mandatory  measuring  and  reporting  of  oil,  fossil  gas 

and coal companies 

Environmental and social impacts 

This option builds on option 1.1, as it would include extending and adapting the reporting 
framework already developed for oil and fossil gas to coal. Such an extension is highly 
advisable, as on the basis of GHG inventories data, coal mine methane emissions are the 
biggest  single  source  of  methane  emissions  in  the  EU  energy  sector.  In  2019,  direct 
emissions  from  the  coal  sector  represented  31%  of  emissions,  almost  equal  to  direct 
methane emissions from fossil gas and oil combined (33%).  

Economic impacts  

150  Regulation  no  166/2006  establishing  the  European  Pollutant  Release  and  Transfer  Register  requires 
operators to report emissions annually to competent authorities in the Member States.  
151  In  line  with  article  11  of  Regulation  no  166/2006  establishing  the  European  Pollutant  Release  and 
Transfer  Register  which  states  that  whenever  information  is  kept  confidential  by  a  Member  State  in 
accordance  with  Article  4  of  Directive  2003/4/EC  of  the  European  Parliament  and  of  the  Council  of  28 
January 2003 on public access to environmental  information, the Member  State  shall,  in its report under 
Article  7(2)  of  this  Regulation  for  the  reporting  year  concerned,  indicate  separately  for  each  facility 
claiming confidentiality the type of information that has been withheld and the reason for which it has been 
withheld. 

51 / 148 

 
 
 
 
 
 
 
                                                           
As no international  standard aiming  for highest  tier reporting such as OGMP  exists  for 
the coal industry, it was not possible to obtain estimates for the coal industry to find out 
the costs of putting in place an MRV standard. Nevertheless, it is important to highlight 
the  willingness  of  the  coal  industry  for  including  coal  into  an  MRV  regulation  (see 
further below). 

The imperative of acting quickly to improve methane emissions from all key sources in 
the EU energy sector, as well as the wide support – including from the coal industry – to 
do  so  by  including  coal  in  the  scope  of  an  MRV  regulation  mean  that  even  if  no 
international coal-related international MRV standard exist to base such requirements on, 
sufficient best practice knowledge is available to already include coal in the scope of the 
proposals on MRV. 

It  however  requires  a  tailored  approach  which  recognises  the  specificities  of  coal-mine 
methane emissions, which includes taking the following into account:  

  For  underground  coal  mines,  mine  operators  should  perform  continuous 
ventilation air methane emissions measurement and quantification on all exhaust 
ventilation  shafts  used  by 
the  mine  operator.  Furthermore,  continuous 
measurements  of  volumes  of  vented  and  flared  methane  from  drainage  stations, 
should also be undertaken. 

  Measurement of surface coal mine methane emissions is challenging due to their 
diffuse  nature  over  a  wide  area.  Therefore,  and  despite  available  technology152, 
emissions  from  surface  mines  are  rarely  measured.  Methane  emissions  from 
surface  mines  can  be  derived  using  basin-specific  coal  emission  factors153  and, 
with greater precision, using mine- or deposit-specific emission factors, since coal 
basins have deposits with different methane-bearing capacity154. Emission factors 
can  be  derived  from  measuring  gas  content  of  the  seams  sampled  from 
exploration borehole cores155. Mine operators should thus perform measurements 
of  methane  emissions  in  surface  coal  mines  using  such  emission  factors. 
Therefore,  mine  operators  should  perform  continuous  measurement  and 
quantification of methane emissions from  ventilation shafts in underground coal 
mines, continuous measurement of vented and flared methane in drainage stations 
and use specific emission factors as regards surface coal mines. 

152  
Best  Practice  Guidance  for  Effective  Management  of  Coal  Mine  Methane  at  National  Level: 
Monitoring,  Reporting,  Verification  and  Mitigation,  ECE  Energy  Series  No.  71,  UNECE  2021 
(Forthcoming) 
153  
154  
(pgi.gov.pl) 
155  
Best  Practice  Guidance  for  Effective  Management  of  Coal  Mine  Methane  at  National  Level: 
Monitoring,  Reporting,  Verification  and  Mitigation,  ECE  Energy  Series  No.  71,  UNECE  2021 
(Forthcoming) 

2006 IPCC guidelines for national greenhouse gas inventories. 
Bilans  Zasobow  Zloz  Kopalin,  stan  na  31.12.2020’,  State  Geological  Surowce  mineralne 

52 / 148 

 
 
 
 
 
 
 
                                                           
Responses from stakeholder consultations and European Parliament 

There  is  very  high  and  widespread  support  for  including  coal  into  an  MRV  regulation 
(96% of responses to the OPC), including by the coal industry. Moreover, the European 
Parliament  expresses  its  strong  support  for  mandatory  MRV  for  coal  mine  methane 
emissions as well as to adopt the same MRV measures for closed or abandoned mines as 
for  operating  mines  in  its  resolution  of  21  October  2021  on  an  EU  strategy  to  reduce 
methane emissions156.  

In conclusion, mandatory measuring and reporting of methane emissions by oil, fossil 
gas  as  well  as  coal  companies  within  the  EU  territory  would  contribute  towards 
meeting  objective  1,  thereby  improving  the  accuracy  of  information  on  the  main 
sources of methane emissions associated with energy produced and consumed within 
the EU. This would be achieved at moderate economic impacts. 

6.1.5.  Option  1.3:  Mandatory  measuring  and  reporting  of  direct  and 

indirect emissions 

Environmental and social impacts 

This option would include also indirect emissions beyond direct emissions from coal, oil 
and fossil gas.  

Including  all  indirect  emissions  occurring  in  the  energy  sector  would  significantly 
increase the scope of potential methane emissions into an MRV regulation.  

Nevertheless,  making  the  case  for  including  obligations  on  indirect  emissions  in 
legislative  proposals  at  this  stage  would  be  difficult  to  do  or,  as  regards  some  of  these 
emissions, not necessary, for the following reasons:  

  Less  than  half  of  responses  to  the  open  public  consultation  were  in  support  of  the 

inclusion of indirect emissions;  

  Methane  emissions  from  industrial  installations  such  as  oil  refining,  chemicals  and 
plastics (specific sectors which certain stakeholders asked to include in  the methane 
legislative proposals) are not only relatively small according to GHG inventories data 
but they are already covered in the European Pollutant Release and Transfer Register, 
which requires plant-specific data to be reported. Including those indirect emissions 
in this proposal would therefore amount to double regulation. 

156 2021/2006(INI) 

53 / 148 

 
 
 
 
 
 
 
 
 
 
 
                                                           
  There  is  no  consensus  on  any  existing  international  standards  on  indirect  emissions 
among stakeholders. For instance, the recommendation by IPIECA (the global oil and 
gas industry association for advancing environmental and social performance) that oil 
and  gas  companies  undertake  reporting  on  the  basis  of  an  existing  international 
standard  –  the  GHG  Protocol  scope  3  (scope  3  covers  indirect  emissions)  reporting 
standard – was supported in only half of the responses, and no other existing standard 
was proposed in place of it. 

Economic impacts  

The economic impacts of including indirect emissions are difficult to estimate as indirect 
emissions are particularly diffuse. In addition, including indirect emissions in the scope 
would  unnecessarily  add  to  the  administrative  burden  of  operators  that  are  already 
fulfilling requirements from existing EU regulations.  

Taking the above into account, it is not proposed to retain such an option. 

6.2 Policy area 2 - Mitigation of methane emissions in the EU 

6.2.1  General considerations for policy area 2 

The assessment of impacts under this policy area was not done on the basis of modelling 
specifically developed for this report. Instead, it was carried out essentially on the basis 
of  available  figures  specifically  developed  and  used  for  the  impact  assessment  for  the 
2030 Climate Target Plan157. The numbers come from the GAINS (Greenhouse gas and 
Air  Pollution  Information  and  Simulation)  model,  described  in  more  detail  in  annex  4. 
GAINS projections  do not  mirror exactly, nor comprehensively cover, all the measures 
being assessed under this policy area. However, they provide a useful approximation and 
indication on the economic benefits of methane emission reductions to society.  

GAINS  modelling  projects  methane  emissions  as  well  as  methane  emission  reductions 
for all methane-emitting sectors of the economy and their associated costs of abatement 
according  to  the  different  types  of  measures  available  in  those  sub-sectors.  These 
abatement  costs  consider  the  cost-savings  of  utilising  recovered  gas  after  deducting 
revenues from investment and operation costs. This includes the sum of fixed investment 
costs,  labour  costs,  non-labour  related  operation  and  maintenance  costs,  and  energy-
related  cost  savings  (methane  sold  on  the  market  as  natural  gas).  Therefore,  they 
represent net costs. In this report, only GAINS methane emission and methane emission 
reduction projections available for the sub-sectors of the energy sector which are within 
its scope are employed. Specifically this covers oil and fossil gas production, fossil gas 
transmission  and  distribution  as  well  as  coal  production  and  abandoned  mines.  Tables 
A.5.1, A.5.2, A.5.3 and A.5.4 show the results of GAINS modelling projections for these 
sub-sectors.  

157 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020SC0176 

54 / 148 

 
 
 
 
 
 
                                                           
Specifically, the oil and gas related measures which are available in GAINS projections 
at all levels of costs effectiveness discussed and included in this report are as follows: 

  Oil  and  gas  production:  maximum  recovery  and  utilisation  of  associated  gas; 

addressing all major leaks using LDAR; 

  Gas transmission: series of measures  (including new controller and dry seals) to 
remedy  typical  leakages  emanating  from  long-distance  gas  pipelines,  which 
include leaky compressor seals and valves; 

  Gas distribution: doubling control of frequency of leaks using LDAR. 

In addition, the coal sector specific measures which are available in GAINS projections 
at all levels of costs effectiveness discussed and included below are as follows: 

  Operating mines: pre-mining degasification, oxidation of ventilation air methane 

(VAM) and VAM oxidation with improved ventilation; 

  Abandoned coal mines: good-practice flooding. 

As specified, all those measures which are available in GAINS projections are relevant at 
all  levels  of  abatement  costs  assessed  in  this  report.  What  changes  is  that  with  each 
higher  level  of  abatement  costs,  more  methane  emissions  can  be  abated  across  the  EU 
with each of the above-cited measures.  

Note in addition that GAINS projects methane emission reductions  that are available at 
different levels of abatement costs. Each level of cost represents different measures and 
their  associated  methane  emission  reductions  and  all  require  a  policy  action  to  trigger 
them.  While  the  baseline  (business  as  usual)  scenario  includes  mitigation  that 
corresponds  to  current  EU  legislation,  the  mitigation  potential  explored  in  this  impact 
assessment  is  over  and  above  what  is  included  in  the  GAINS  baseline  emissions 
projections.  

An important caveat  as regards the modelling data used in this report concerns the  fact 
that  emission  reduction  projections  are  based  on  historical  data  established  often  as  a 
result  of  default  values  and  which  contain  some  degree  of  uncertainty  as  regards  the 
origin and nature of methane emissions (as we have described in section 2 of this report). 
While  model  projections  are  useful  to  give  a  sense  of  what  can  be  expected  under 
different  circumstances,  caution  is  advisable  as  to  the  extent  to  which  the  projections 
themselves can be deemed to accurately reflect what will be the situation as regards the 
future  origin,  magnitude  and  nature  of  methane  emissions  in  the  sub-sectors  being 
analysed in this report. 

Tables A.5.1 and A.5.2 highlight the share of cost-effective methane abatement measures 
available  in  the  coal,  gas  and  oil  sub-sectors  by  comparing  the  projected  reductions  in 
additional  methane  emission  reductions  over  and  above  the  baseline  in  different  years 
available at different levels of abatement costs, as follows:  

1  Share  of  emissions  that  can  be  abated  at  negative  or  zero  costs:  a  sum  of  all  the 
projected emission on top of baseline emission reductions which are possible to abate 
at no net cost to the commercial entity, from which operators can either expect a net 
positive return (negative costs) or not  net  loss (zero costs).  The methane  abatement 

55 / 148 

 
 
 
captured  at  that  level  of  cost  would  include  measures  that  companies  could 
theoretically be expected to implement of their own accord but are unlikely to do so 
in practice due for instance to lack of information; 

2  Share of emissions that can be abated at costs less or equal to ‘low’ costs: a sum of 
all the projected emission on top of baseline emission reductions which are possible 
at  negative  or  zero  costs  and  at  ‘low  costs’.  ‘Low  costs’  is  a  threshold which  takes 
into  account  all  the  emissions  that  can  be  abated  at  less  than  18.2  Euros per  ton  of 
CO2  equivalent  of  methane.  The  methane  abatement  captured  at  that  level  of  costs 
would include measures that companies could theoretically be expected to implement 
of their own accord but  are unlikely to do so in practice due to  lack of information 
and/or a different perception on what they consider as ‘low’ costs; 

3  Share  of  emissions  that  can  be  abated  at  costs  less  than  the  sum  of  social  and 
environmental  costs  of  methane:  a  sum  of  all  the  projected  emission  on  top  of 
baseline  emission  reductions  which  are  possible  at  negative,  zero  costs,  ‘low  costs’ 
and at less than the sum of ‘social and environmental costs’. It is a threshold which 
takes into account all the emissions that can be abated at less than 130 Euros per ton 
of CO2 equivalent of methane. This level of costs takes into account an estimation of 
the  combined  environmental,  social  and  health-related  costs  of  methane  emissions. 
The  methane  abatement  captured  at  that  level  of  costs  would  include  regulatory 
measures  that  address  the  externality  (benefits  of  emission  reductions  accruing  to 
society  while  the  costs  are  borne  by  the  operators).  The  level  of  abatement  of 
emissions which is possible at less than that level of costs can thus be considered the 
optimal level of abatement from the point of view of society. 

Both  ‘low  cost’  and  ‘social  and  environmental  cost’  thresholds  are  based  on  the 
assessments  undertaken  by  the  United  Nations  Environment  Programme/Climate  and 
Clean air Coalition in their recently published ‘Global Methane Assessment: benefits and 
costs of mitigating methane emissions’158.  

More details on the cost effective measures relevant for the EU are included in annex 5 
as  well  as  the  emission  reductions  which  they  are  projected  to  deliver  if  put  in  place. 
These  measures  are  listed  under  the  relevant  options  below.  More  details  on  what 
constitutes  social  and  environmental  costs  are  also  available  in  Annex  5.  The  benefits 
shown in table A.5.4 provide estimations for each of these individual benefits for 2030 
which would result under each different  option.  Estimations  for 2040 and 2050 are not 
included,  but  would  similarly  reveal  large  net  benefits  in  terms  of  the  comparison 
between  the  total  costs  of  abatement  measures  and  the  total  social  and  environmental 
benefits of those measures.    

All  the  major  oil  and  gas  industry  associations  which  responded  to  the  open  public 
consultation  agreed  with  the  statement  that  the  overall  benefits  –  including  economic, 
social,  environmental  and  other  relevant  benefits  -  of  putting  in  place  legislative 

158 
https://www.unep.org/resources/report/global-methane-assessment-benefits-and-costs-mitigating-
methane-emissions.  More  information  on  those  cost  levels  are  contained  in  annex  5  in  this  impact 
assessment.   

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measures  to  ensure  robust  and  effective  measurement,  reporting  and  mitigation  of 
methane emissions in the energy sector generally outweigh the costs to industry159. The 
cost/benefit results presented below support this view. 

Given  that  GAINS  projections  (as  well  as  IEA  estimations  used  in  policy  area  3)  take 
into account the market price of recoverable methane in their estimations of net costs of 
various  abatement  measures,  it  means  that  the  cost  effectiveness  of  measures  varies 
depending  on  the  prevailing  market  prices  for  fossil  gas.  Thus,  any  estimations  which 
would be based on the current situation (at the time of writing) of unprecedentedly high 
prices for fossil gas would further and significantly improve cost effectiveness, which in 
terms  of  projections  would  result  in  a  larger  share  of  emission  abatement  available  at 
zero  or  low  costs.  The  GAINS  projections  results  (as  well  as  IEA  estimations)  used  in 
this  report  can  therefore  be  considered  as  underestimating  cost  effectiveness  in  the 
context of the current reality of very high fossil gas prices. 

As explained above, GAINS projections take into account the costs of abatement to the 
companies.  GAINS  projections  do  not,  however,  take  into  account  other  costs,  such  as 
costs  to  competent  authorities  to  verify  that  measures  are  adequately  implemented  or 
other  costs  of  ensuring  compliance  and  enforcement,  and  no  estimations  of  those  costs 
are  readily  available.  For  a  full  calculation  of  the  net  benefits  (in  monetary  terms)  of 
abatement measures available at all levels of abatement costs, such costs would have to 
be  estimated  and  deducted  from  the  net  socio-economic  benefits  reported  below  under 
the  various  options.  However,  as  table  A.5.5  clearly  demonstrates,  and  as  will  be 
highlighted in further detail in this section when assessing different options,  the levels of 
benefits  of  methane  abatement  are  many  times  higher  than  the  total  net  costs  of 
abatement measures. This is true for all levels of cost abatement included in this report, 
as can clearly be seen in table A.5.4 which shows that for all options, net benefits amount 
to between 866 and 2,446 million Euros (including looking at coal measures separately).  
These  would  undoubtedly  cover  all  those  additional  costs  which  would  accrue  to 
competent authorities as a result of these measures. 

A  similar  point  can  be  made  as  regards  the  likely  impact  of  such  measures  on  energy 
prices. When looking at the range of total net costs of measures included in table A.5.4, it 
can be seen that they are between 0 to 127 million Euros. Even taking into account the 
likely costs to other parties, the total net costs of measures for the highest level of cost 
abatement  is  negligible  compared  to  what  the  EU  27  spent  on  the  consumption  of  oil, 
fossil gas or coal. In 2020, the EU 27 spent 184 billion Euros on oil, coal and fossil gas 
combined (140 billion Euros on oil, 40 billion Euros on fossil gas and 4.5 billion Euros 

159 Both Eurogas and IOGP (International Oil and gas Association) supported that statement. The industry 
body  representing  the  gas  mid  and  downstream  segment  (GIE-Marcogaz  ENTSOG)  opted  neither  for  a 
‘yes’  nor  a  ‘no’  answer,  but  explained  that  the  vast  majority  of  the  mid  and  downstream  fossil  gas 
companies  are  regulated  entities  and  that  the  investments  on  MRV,  LDAR  and  mitigation  measures 
undertaken by infrastructure operators should be recognised within the scope of regulated activities by the 
national  regulatory  authorities.  At  the  workshop  on  LDAR  organised  by  the  Commission  on  the  16th  of 
March  2021,  the  representative  of  the  Council  of  European  Energy  Regulators  stated  that  National 
Regulatory  Authorities  generally  expressed  support  to  include  such  costs  in  the  scope  of  regulated 
activities.  

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on coal), while in  previous  years    the  total  level  of EU  purchases of oil,  fossil gas  and 
coal  was  much  higher  (287  billion  Euros  in  2019,  345  billion  Euros  in  2018).    It  can 
therefore be said that the total costs of the most ambitious level of methane abatement is 
unlikely to have any material impact on the prices of energy, even more so in 2021 with 
the very high level of energy prices recorded over the year. For instance, the IEA, which 
estimates that more than 70% of current emissions from oil and gas operations  globally 
are technically feasible to prevent and around 45% could typically be avoided at no net 
cost  because  the  value  of  the  captured  gas  is  higher  than  the  cost  of  the  abatement 
measure, states  that “this share would be much  higher at  the moment,  given the record 
highs in natural gas prices”160.  
No  comprehensive  projections  are  available  for  indirect  emissions161,  and  therefore  a 
comparison of option 2.3b with other options was not possible. In addition, none of the 
available  projections  of  methane  emission  reductions  specifically  model  performance 
requirements such as option 2.4. This is because projections of methane emissions model 
specific abatement measures, not the instruments to be employed in order to achieve the 
projected reductions. Deciding on the level of emission reductions that would be included 
in a performance requirement would entail making a choice on a point along the marginal 
cost  curve  of  all  possible  measures  and  setting  the  target  reduction  requirement  on  the 
basis  of  the  amount  of  emission  reductions  represented  by  that  point.  In  the  case  of 
prescriptive mitigation requirements, the measures would be chosen first, but regard for 
cost-effectiveness  would  also  require  to  choose  a  point  along  the  marginal  cost  curve 
beyond which no further measures are included. The end result is therefore the same for 
both  instruments,  hence  the  reason  why  there  is  no  distinction  in  the  results  between 
option 2.4 and the other options covering the same scope of emissions. 

All  the  numbers  reported  below  can  be  found  in  one  or  more  of  the  following  tables 
contained in annex 5. 

6.2.2  Option 2.0: Business as usual 

Environmental and social impacts 

In terms of environmental and social impacts, a business as usual scenario would lead to 
the following reductions in total direct methane emission:  

  From a level of methane emissions for coal, oil and fossil gas of 1,797 kilotonnes 
in 2020 to levels of emissions of 1,080, 538 and 461 kilotonnes , respectively, in 
2030,  2040  and  2050.  Thus,  methane  emissions  from  coal,  oil  and  fossil  gas 
would fall by 40%, 70% and 74% under the baseline respectively in 2030, 2040 
and 2050, compared to 2020. 

  From  a  level  of  methane  emissions  for  oil  and  fossil  gas  of  838  kilotonnes  in 
2020 to levels of emissions of 713, 412, and 355 kilotonnes, respectively in 2030, 

https://www.iea.org/news/tackling-methane-emissions-from-fossil-fuel-operations-is-essential-to-

160 
combat-near-term-global-warming. 
161 GAINS only projects emissions from transport and oil refining as part of indirect emissions. 

58 / 148 

 
 
 
 
                                                           
2040  and  2050  Thus,  methane  emissions  from  oil  and  fossil  gas  would  fall  by 
15%,  51%  and  58%  under  the  baseline  respectively  in  2030,  2040  and  2050, 
compared to 2020. 

  From a level of methane emissions for coal of 959 kilotonnes in 2020 to levels of 
emissions of 367, 126 and 106 kilotonnes, respectively in 2030, 2040 and 2050. 
Thus, methane emissions from coal would fall by 62%, 87% and 89% under the 
baseline respectively in 2030, 2040 and 2050, compared to 2020.  

In terms of the methane emission reductions that could be expected under a business as 
usual  scenario,  much  of  the  past  reductions  in  methane  emissions  in  the  energy  sector 
were  driven  by  declines  in  fossil  fuel  production.  All  things  being  equal  therefore,  it 
could be realistic to expect that energy sector methane emissions in the EU will  at least 
continue to fall in line with expected reductions in fossil fuel production.  

However, there would be no automatic reductions in methane emissions from operators 
active in non-production parts of the energy supply chain (such as in LNG terminals, gas 
storage, transmissions and distribution).  

It is also  unlikely that coal, oil and gas companies would of their own accord undertake 
sufficient  abatement  of  methane  emissions  under  a  business  as  usual  scenario. As  the 
projections included in tables A.5.3 demonstrate, there is significant further abatement of 
methane  emissions  that  the  EU  energy  sector  could  undertake  in  future  years  over  and 
above  baseline  emission  reductions,  much  of  which  is  cost  effective  from  the  point  of 
view  of  companies  (available  at  negative,  zero  or  low  costs).  And  there  is  further 
abatement,  on  top  of  that,  which  can  also  be  achieved  which  is  environmentally  and 
socially cost-effective. Thus, in table A.5.3 it can for instance be seen for the oil, fossil 
gas  and  coal  sectors  combined  that  between  43%  and  67%  (depending  on  the  year  of 
projection)  of  total  projected  reductions  in  methane  emissions  over  and  above  the 
baseline    can  be  achieved  at  zero  costs.  This  share  rises  with  each  higher  level  of 
abatement  cost,  but  even  at  less  than  low  costs,  between  63%  and  72%  of  extra 
reductions  can  be  achieved.  For  the  coal  sector  specifically,  the  results  are  even  more 
significant: between 88% and 100% of  total  projected reductions in  methane emissions 
that are available over and above the baseline can  already  be achieved at  less than low 
costs. 

Tables A.5.1 and A.5.2 contain the methane emissions data on which table A.5.3 is based. 
Both  tables  show  the  extra  amount  of  methane  emission  reductions  which  could  be 
abated over and  above the baseline at  different  levels  of  abatement  costs separately  for 
the  coal  and  for  the  oil  and  gas  sectors.  It  reveals  for  instance  for  coal  that  putting  in 
place  measures  at  less  than  low  cost  could  trigger  an  extra  218  kilotonnes  of  methane 
emission  reductions  on  top  of  593  kilotonnes  of  baseline  methane  emission  reductions 
projected to occur between 2020 and 2030. This rises to 247 kilotonnes of extra emission 
reductions  in  2030  with  measures  at  less  than  the  social  and  environmental  costs  of 
methane, which is the level of abatement which would be optimal to reach from the point 
of  view  of  society.  For  the  oil  and  gas  sectors,  putting  in  place  measures  at  zero  costs 
could  already  trigger  a  substantial  amount  of  extra  methane  emission  reductions, 
amounting to 292 kilotonnes of methane, on top of 125 kilotonnes of baseline methane 
emission  reductions  projected  between  2020  and  2030.  This  rises  to  458  kilotonnes  of 

59 / 148 

 
 
 
extra  emission  reductions  in  2030  with  measures  at  less  than  the  social  and 
environmental costs of methane. 

In  summary,  those  projections  highlight  not  only  that  without  specific  requirements, 
operators  would  likely  not  undertake  all  of  the  abatement  that  is  theoretically  in  their 
commercial interest to do (i.e: abatement at negative or zero net costs), but in addition, 
that  large  amounts  of  extra  methane  emission  reductions  could  be  achieved  at  low  or 
even zero costs, depending on the sector. 

In  addition,  as  reflected  in  more  detail  below  on  the  responses  to  the  open  public 
consultation  under  options  2.1  and  2.2,  there  was  widespread  support  for  legislative 
measures to mitigate emissions in the oil, fossil gas and coal sectors.  

Economic impacts 

GAINS projections for the baseline do not provide associated cost data.  In terms of the 
economic  impacts  on  companies,  under  a  baseline  whereby  much  of  the    methane 
emission  reductions  could  be  expected  to  occur  naturally  from  further  falls  in  the 
production of fossil energy in  the EU,  these  could  be expected to  be minimal, as fossil 
production companies  would  not  actively  abate  methane emissions. For  other operators 
active in non-production parts of the energy supply chain (such as in LNG terminals, gas 
storage, transmissions and distribution), there could  be no expectations that  they would 
undertake  any  further  abatement  of  methane  emissions  under  a  baseline  scenario,  and 
therefore that they would incur much additional impacts in terms of costs of abatement. 

Given  the  high  short  term  climate  change  impact  of  methane  emissions  and  the 
uncertainty  linked  to  the  pace  of  further  reductions  in  EU  fossil  production,  allowing 
methane  emissions  reductions  to  occur  as  and  when  further  reductions  in  fossil  energy 
production  also  occur  in  the  EU  would  be  contrary  to  the  imperative  for  expediently 
tackling  energy  related  methane  emissions  which  form  the  political  basis  of  this 
assessment. 

In conclusion, while a business as usual  option would not have significant economic 
costs, its outcome in terms of environmental and social impacts are too uncertain and 
would  unlikely  lead  to  an  environmentally  and  socially  optimal  outcome  required  to 
meet specific objective 2. 

6.2.3  Option  2.1:  Commission  guidance  on  mitigation  of  methane 

emissions in the oil and fossil gas sectors 

Environmental and social impacts 

Commission  guidance  on  mitigation  of  methane  emissions  in  the  oil  and  fossil  gas 
sectors would contain the same measures as included in mandatory option 2.2, but these 
would not be legally binding. Thus, companies would be at the liberty to decide whether 
to implement these measures or not.  

In light of the growing focus and attention on the climate changing effects of methane, 
some  companies  could  likely  undertake  methane  emission  abatement  as  a  result  of  the 
guidance, but if so only up to the extent that is cost-efficient to them (i.e: up to the level 

60 / 148 

 
 
 
 
of cost-effectiveness that is qualified above as at ‘negative or zero cost’, but certainly not 
up  to  the  levels  that  are  considered  cost  effective  from  an  environmental/social 
perspective)  and  only  to  the  extent  that  information  on  what  measures  are  available  at 
negative to zero costs is available to them. 

Explicitly,  the  environmental  and  social  impacts  of  option  2.1  (covering  oil  and  fossil 
gas) associated with that level of abatement costs would be as follows (see tables A.5.2 
and A.5.3): 

  Additional methane emission reductions (on top of baseline emission reductions) 
of,  respectively,  292,  191  and  198  kilotonnes  of  methane  respectively  in  2030, 
2040 and 2050.   

  The environmental and social benefits associated with 292 kilotonnes of methane 

emission reductionsinclude (see table A.5.3): 

a. 

418 annual premature deaths due to ozone prevented; 

1,168  annual  asthma-related  accident  and  emergency  department  visits 

b. 
avoided; 

c. 

26 annual hospitalizations avoided; 

42,340  tons  of  annual  losses  of  wheat,  soybean,  maize  and  rice  due  to 

d. 
ozone exposure avoided; 

e. 

117 million hours per year of work loss due to extreme heat avoided. 

While the above environmental and social impacts of this option are an improvement on 
the  baseline  both  in  terms  of  the  extra  methane  emission  reductions  that  could  be 
expected from it and the associated benefits, they would be unlikely to lead to the extra 
emission  reductions  and  associated  benefits  of  measures  available  at  higher  than  zero 
costs.  In  the  case  of  the  oil  and  gas  sector,  as  table  A.5.2  shows,  while  not  much 
additional  methane  emission  reductions  can  be  achieved  at  low  cost  compared  to  zero 
costs, at socially optimal levels of abatement costs, 56% more methane emission could be 
abated in 2030 (458 kilotonnes) compared to a zero cost scenario (292 kilotonnes).  

In addition, the uncertain outcome of this option make it insufficient in response to the 
political imperative for expedient and decisive action to tackle methane emissions in the 
EU energy sector.   

Finally,  choosing  this  option  would  not  adequately  meet  the  widespread  support  for 
mandatory measures to mitigate emissions in these sectors, as highlighted in more detail 
below on the responses to the open public consultation under option 2.2. . 

Economic impacts 

In terms of the economic impacts and administrative burden of Commission guidance on 
mitigation  of  methane  emissions  in  the  oil  and  fossil  gas  sectors,  these  would  be  as 
follows (see table A.9.1 and A.5.3): 

1. 
The share of total projected reductions in methane emissions above the baseline 
that can be abated cost effectively at negative or zero costs - range from between 44% to 
64% for the years 2030, 2040 and 2050; 

61 / 148 

 
 
 
2. 
As table A.5.3 shows, abatement of methane emissions at zero costs means there 
would be no net impacts on companies. In comparison, the total social and environmental 
benefits of avoiding 292 kilotonnes of methane emissions is 1,064 million Euros. The net 
socio-economic benefits of option 2.1 therefore amount to 1,064 million Euros. 

By  virtue  of  the  fact  that  Commission  guidance  would  only  likely  lead  to  levels  of 
methane  emissions  abatement  associated  with  measures  that  are  cost  effective  to 
companies,  the  economic  impacts  and  administrative  burden  would  be  less  than  for 
measures that are available at (higher) social/environmental cost abatement levels, but as 
can be seen in options 2.2 and 2.3, the total costs of measures associated with this higher 
level  of  abatement  is  negligible  in  comparison  to  the  total  social  and  environmental 
benefits of methane emissions abatement. 

In conclusion, while Commission guidance on mitigation of methane emissions would 
have  less  economic  impacts  than  a  mandatory  measure  covering  the  same  scope  of 
emissions,  it  would  not  lead  to  an  environmentally  and  socially  optimal  outcome 
required to reach specific objective 2. 

6.2.4  Option  2.2:  Mandatory  measures  on  mitigation  of  methane 

emissions in the oil and fossil gas sectors 

Setting mandatory measures on mitigation of methane emissions in the oil and fossil gas 
sectors  would  equate  to  including  all  the  methane  abatement  measures  which  are 
available at costs less than the sum of social and environmental costs of methane in the 
expectation  that  they  would  lead  to  the  level  of  abatement  of  methane  emissions 
associated  with  these  measures.  However,  as  explained  earlier  on,  all  of  the  measures 
modelled  in  GAINS  which  are  listed  in  section  6.2.1  are  common  to  all  levels  of 
abatement costs included in this analysis. What changes is only the amount of emission 
reductions achievable via such measures which increases with higher levels of abatement 
costs. This could be translated into policy measures by taking an ambitious approach as 
regards mandatory measures on mitigation of methane emissions in the oil and fossil gas 
sectors, meaning one that is likely to lead to the highest  possible abatement of methane 
emissions,  yet  taking  care  to  ensure  that  such  mandatory  measures  are  realistic  and 
feasible.  The  measures  described  in  section  5.2.3  represent  such  an  approach.  As 
explained in that section, they are the result of taking into account  a combination of best 
practice  methane  abatement  measures  covering  key  aspects  of  the  main  prescriptive 
measures typically used to mitigate methane emissions in the oil and fossil gas sectors, as 
well  as  from  existing  methane  regulations  considered  state  of  the  art,  together  with 
detailed  technical  input  received  from  various  stakeholders  in  response  to  the  Open 
Public Consultation for this initiative.  

In  addition,  and  as  highlighted  in  section  6.2.3,  taking  an  ambitious  approach  is 
important  in  the  case  of  methane  emissions  in  the  oil  and  gas  sector  because,  as  table 
A.5.1 shows, while not much additional methane emission reductions can be achieved at 
low cost compared to zero costs, at socially optimal levels of abatement costs, 56% more 
methane  emission  could  be  abated  in  2030  (458  kilotonnes)  compared  to  a  zero  cost 
scenario (292 kilotonnes). 

62 / 148 

 
 
 
 
Environmental and social impacts 

Explicitly, assuming that an ambitious set of measures would lead to the environmental 
and  social  impacts  associated  with  a  socially  optimal  cost  of  abatement,  option  2.2 
(covering oil and fossil gas) could be expected to deliver the following (see tables A.5.2 
and A.5.3): 

  Additional methane emission reductions (on top of baseline emission reductions) 
of,  respectively,  458,  270  and  225  kilotonnes  of  methane  respectively  in  2030, 
2040 and 2050.   

  The environmental and social benefits associated with 458 kilotonnes of methane 

emission reductions include (see table A.5.3): 

a.  655 annual premature deaths due to ozone prevented; 

b.  1,832  annual  asthma-related  accident  and  emergency  department  visits 

avoided; 

c.  41 annual hospitalizations avoided; 

d.  66,410  tons  of  annual  losses  of  wheat,  soybean,  maize  and  rice  due  to 

ozone exposure avoided; 

e.  183 million hours per year of work loss due to extreme heat avoided. 

Economic impacts  

In terms of the economic impacts and administrative burden of option 2.2, according to 
the main findings of tables A.5.2, A.5.3 and A.5.4: 

1.  The share of projected  oil and fossil gas  methane emissions  over and above the 
baseline  that  can  be  abated  cost  effectively  from  a  social  and  environmental 
perspective  (which,  as  indicated  below  table  A.5.2,  is  considered  in  the 
UNEP/CCAC  assessment  to  amount  to  less  than  130  Euros  per  tonne  of  CO2 
equivalent) range from between 65% and 68% for the years 2030, 2040 and 2050.  

2.  The total costs of measures to achieve socially and environmentally cost effective 
methane  emission  reductions  under  option  2.2  in  2030  of  458  kilotonnes  of 
methane  amounts  to  93  million  Euros.  In  comparison,  the  total  social  and 
environmental  benefits  of  avoiding  the  same  amount  of  methane  emissions  is 
1,669 Million Euros. The net socio-economic benefits of option 2.2 for that year 
therefore amount to 1,576 million Euros. The total costs of abatement to operators 
are therefore negligible compared to the total benefits of that level of abatement 
to society. 

Responses from stakeholder consultations and European Parliament 

In  responses  to  the  open  public  consultation,  all  oil  and  gas  industry  associations 
expressed  support  for  putting  into  EU  legislation  an  obligation  on  leak  detection  and 
repair  (LDAR),  and  NGOs  are  also  widely  supportive  of  such  an  obligation.  It  is  also 
widely supported by National Regulatory Authorities.  

63 / 148 

 
 
 
As regards a ban on routine venting and  flaring, all NGOs  and industry  respondents  to 
the  open  public  consultation  believe  that  it  is  feasible  to  phase  out  routine  venting  and 
flaring associated with energy produced and consumed in the EU. Such an obligation is 
also  widely  supported  by  National  Regulatory  Authorities.  The  industry  responses  are 
more nuanced than those of NGOs, but it is clear from the detailed responses of industry 
to the Public Consultation questions on what a ban on routine venting and flaring should 
contain that they conditionally support such an obligation.  

In addition, many oil companies (a number of which are also fossil gas companies) have 
committed  to  achieving  zero  routine  flaring  by  2030,  as  signatories  to  the  World  Bank 
zero routine flaring by 2030 initiative162, so it could be argued, especially if we ensure a 
sufficiently comparable approach to that of the World Bank’s in our proposals, that they 
could not reasonably oppose it. 

Furthermore,  the  European  Parliament  offers  explicit  support  for  ambitious  mandatory 
requirements on LDAR and on venting and flaring in its resolution of 21 October 2021 
on an EU strategy to reduce methane emissions163.  In the resolution, it “underlines the 
importance,  [moreover],  of  adopting  mandatory  leak  detection  and  repair  (LDAR) 
programmes…”  and  expresses  the  view  that  “…  leak  detection  should  be  followed  by 
sound recordkeeping and a requirement to repair potential leaks within a clear timeframe; 
it states that “improving leakage detection and repair and strict rules on routine venting 
and flaring are essential measures to reduce methane emissions from the energy sector”; 
it “welcomes the  consideration of rules covering the whole supply chain  to ban routine 
venting  and  flaring  in  the  energy  sector  up  until  the  point  of  production,  except  in 
exceptional cases necessary for safety reasons…”. 

On  both  obligations  on  LDAR  and  restrictions  on  venting  and  flaring,  the  oil  and  gas 
industry  as  well  as  NGOs  have  provided  very  detailed  replies  of  what  should  be 
contained  in  them,  which  can  be  considered  conditions  for  putting  in  place  such 
obligations.  The  emerging  commonalities  from  those  responses  as  well  as  useful 
guidance, which are taken into account in the measures proposed and further detailed for 
oil and gas in section 5.2.3 which form part of options 2.1, 2.2 and 2.3 are as follows.  

On LDAR, the policy proposal should take the following into account: 

1.  Accuracy and quantifying of leaks is less important than finding and fixing them.  

2.  A  risk-based  approach  should  be  taken,  meaning  that  those  areas  with  a  higher 
risk  of  leaks  should  be  checked  more  frequently.  All  leaks  irrespective  of  size 
need to be recorded as small leaks can develop into larger ones, and these have to 
be monitored. 

3.  There  should  be  verification  and  confirmation  that  leak  repairs  have  been 

effective soon after the repair.  

162  Company  endorsers  of  the  initiative  include  BP,  Chevron,  ConocoPhillips,  Eni,  Equinor,  Entreprise 
Tunisienne  d’Activités  Pétrolières,  Galp  Energia,  Kuwait  Oil  Company,  Nigerian  National  Petroleum 
Corporation (NNPC), Total, Sonatrach, Shell, Socar, Repsol, Wintershall Dea, to name but a few, the rest 
can be found here: https://www.worldbank.org/en/programs/zero-routine-flaring-by-2030#4 
163 2021/2006(INI) 

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4.  Harmonized definitions of certain key terms should be included. 

5.  The  obligation  should  have  a  certain  amount  of  flexibility,  for  instance  by  not 
being  prescriptive  on  the  types  of  device  to  be  used  for  detecting  leaks,  and 
allowing  for  new,  advanced  LDAR  technologies.  It  should  however  specify  the 
sensitivity threshold.  

In addition, notable recommendations which are also reflected in the measures detailed in 
section 5.2.3 for oil and gas include the following:  

1.  Unlike  industry,  NGOs  are  especially  keen  on  setting  the  frequency  of  LDAR 

campaigns in legislation.  

2.  Both NGOs and industry are divided on the question of the requirement to repair 
all  detected  leaks  and  on  the  question  of  allowed  time  taken  for  leaks  to  be 
repaired  after  detection.  It  seems  that  a  middle  way  would  be  to  include  some 
exceptions. 

As  regards  the  approach  to  be  taken  on  limiting  venting  and  flaring,  the  following 
emerging  commonalities  from  stakeholder  input  in  response  to  the  Open  Public 
Consultation are also taken into account in set of measures proposed on oil and gas and 
detailed in sections 5.2.3: 

1.  A common set of definitions and parameters for venting and flaring is necessary 

(unanimous among responding NGOs and industry). 

2.  The  EU  should  establish  a  list  of  clearly  defined  circumstances  under  which 
venting and flaring is allowed (unanimous among responding NGOs and industry, 
although industry advise that only  guidance should  be issued, and that it should 
avoid being overly prescriptive). 

3.  For routine flaring, there is wide support among both NGOs and industry to base 
the proposal on, and use the definitions of, the World Bank’s zero routine flaring 
initiative by 2030. 

4.  On venting, several NGOs are proposing an outright ban, with exemptions for a 

discrete set of clearly defined activities and situations. 

5.  Both NGOs (with one exception) and industry agree that there should be a phase 
out of routine venting and flaring, though they are divided on the length of it (0 to 
5 years according to NGOs, more than 5 years according to industry). 

As regards compliance, the approach should closely follow existing EU legislation which 
already  requires  operators  to  deliver  proof  of  compliance  at  plant-level  with  methane 
emission  limits,  such  as  for  instance  in  the  case  of  the  Industrial  Emissions  Directive 
(IED). Under the IED, verification of compliance is based on Member State systems and 
plans  of  environmental  inspections  at  national,  regional  and  local  level.  This  requires 
national  competent  authorities  to  draw  up  programmes  for  routine  environmental 
inspections, including the frequency of site visits for different types of installations. Such 
inspections  must  include  site  visits,  monitoring  of  emissions  and  checks  of  internal 
reports  and  follow-up  documents,  verification  of  self-monitoring,  checking  of  the 
techniques  used  and  adequacy  of  the  environment  management  of  the  installation, 

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undertaken by or on behalf of the competent authority to check and promote compliance 
of installations164. 

In addition, Member States would be required to lay down rules on penalties applicable 
to infringements of the provisions and take all measures necessary to ensure that they are 
implemented.  The  penalties  provided  for  would  have  to  be  effective,  proportionate  and 
dissuasive and should include fines. 

In summary, option 2.2 would lead to achieving a socially and environmentally optimal 
outcome  for  that  scope  of  methane  emissions  (covering  oil  and  gas),  and  while  the 
economic costs would be higher than in the case of non-mandatory measures, the net 
economic  impacts  linked  to  an  environmentally  and  socially  cost  effective  abatement 
level is significantly positive. In conclusion, option 2.2 would meet objective 2. 

6.2.5  Option  2.3:  Mandatory  measures  on  mitigation  of  methane 
emissions  in  the  oil,  fossil  gas  and  coal  sectors  as  well  as 
indirect emissions 

In  keeping  with  the  approach  taken  under  option  2.2,  setting  mandatory  measures  on 
mitigation  of  methane  emissions  in  the  oil,  fossil  gas  and  coal  sectors  would  equate  to 
including all the methane abatement measures which are available at costs less than the 
sum of social and environmental costs of methane in the expectation that they would lead 
to  the  level  of  abatement  of  methane  emissions  associated  with  these  measures.  As 
explained  under  option  2.2,  this  could  be  translated  into  policy  measures  by  taking  an 
ambitious approach as regards mandatory measures on mitigation of methane emissions 
in the oil, fossil gas and, in this case also, coal sectors, meaning one that is likely to lead 
to  the  highest  possible  abatement  of  methane  emissions,  yet  taking  care  to  ensure  that 
such mandatory measures are realistic and feasible. 

On the inclusion of indirect emissions, following the reasoning under policy area 1, it is 
not  possible  currently  to  know  what,  if  any,  additional  mitigation  measures  would  be 
necessary.  

In  addition,  and  as  highlighted  under  the  BAU  scenario,  EU  regulations  already  exist 
which  include  obligations  to  mitigate  energy  related  methane  emissions  such  as 
emissions  from  all  industrial  installations  from  several  sectors  via  the  Industrial 
emissions  Directive  (such  as  chemical,  oil  refining  and  plastic  production  plants),  and 
emissions  from  space  heating  and  cooling  installations,  via  the  Ecodesign  and  Energy 
Labelling regulations. 

It is however important to note that the scope of the IED excludes all fossil gas upstream, 
mid and downstream (LNG, underground gas storage, transmission, distribution) as well 
as coal mining/extraction, which itself provides an additional justification for covering all 
these sectors in the present proposal. 

164 Article 23 on environmental  inspections of Directive 2010/75/EU of 24 November 2010 on industrial 
emissions, 

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Environmental and social impacts  

Explicitly,  assuming  that  an  ambitious  set  of  mandatory  measures  would  lead  to  the 
environmental  and  social  impacts  associated  with  a  socially  optimal  cost  of  abatement, 
option  2.3a  (covering  oil,  fossil  gas  and  coal  but  not  indirect  emissions)  could  be 
expected  to  deliver  the  following  (see  tables  A.5.1,  A.5.2  and  A.5.3  for  detailed 
numbers): 

  Additional methane emission reductions (on top of baseline emission reductions) 
of,  respectively,  706,  377  and  317  kilotonnes  of  methane  respectively  in  2030, 
2040 and 2050.   

  The environmental and social benefits associated with 706 kilotonnes of methane 
emission reductions include (see table A.5.4): 1,010 annual premature deaths due 
to ozone prevented; 

a.  2,824  annual  asthma-related  accident  and  emergency  department  visits 

avoided; 

b.  64 annual hospitalizations avoided; 

c.  102,370 tonnes of annual losses of wheat, soybean, maize and rice due to 

ozone exposure avoided; 

d.  282 million hours per year of work loss due to extreme heat avoided. 

By  virtue  of  including  a  larger  scope  of  emissions,  option  2.3a  results  in  larger 
environmental and social benefits, in terms of methane emission reductions, and thus also  
in terms of environmental and social benefits, than option 2.2. 

Economic impacts  

In terms of the economic impacts and administrative burden of option 2.3a, according to 
the main findings of tables A.5.3 and A.5.4: 

1.  The share of total projected methane emissions over and above the baseline under 
option  2.3a  that  can  be  abated  cost  effectively  from  a  social  and  environmental 
perspective range from between 73% to 77% for the years 2030, 2040 and 2050.  

2.  The total costs of measures to achieve socially and environmentally cost effective 
methane  emission  reductions  under  option  2.3a  in  2030  amounts  to  127 million 
Euros. In comparison, the total social and environmental benefits of avoiding the 
same  amount  of  methane  emissions  is  2,573  Million  Euros.  The  net  socio-
economic benefits of option 2.3a for that year therefore amount to 2,446 million 
Euros.  

On the inclusion of coal 

Honing  in  specifically  on  the  economic  impacts  and  administrative  burden  of  the  coal-
related measures in option 2.3a, according to the main findings of tables A.5.1 and A.5.3: 

1.  All of the projected coal-related methane emissions over and above the baseline can 
be abated cost effectively from a social and environmental perspective for the years 

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2030, 2040 and 2050. Already at low cost of abatement, between 88% and 100% of 
total  coal-related  methane  emissions  over  and  above  the  baseline  can  be  abated.  
Thus, taken as a whole, a large number of methane emissions in the coal sector can 
be abated at relatively low costs. This however merits further qualification. As table 
A.5.1 which provides further details clearly shows: 

  The  measure  modelled  for  abandoned  mines  (where  possible,  good-practice 
flooding, as highlighted in section 6.2.1) is very cost effective with 100% of 
measures, for all years, being available already at negative or zero costs.  

  Due to the sizeable share of overall projected methane emissions and methane 
emission  reductions  emanating  from  abandoned  mines  –  especially  in  later 
years as a growing number of coal mines will stop operation – the overall cost 
effectiveness of coal-mine methane emission measures is influenced to some 
extent by the high cost effectiveness of measures related to abandoned mines. 

2.  The total costs of coal-related methane abatement measures at low cost of abatement 
amounts  to  15  million  Euros  for  218  kilotonnes  of  abatement  by  2030.  The  total 
social and environmental benefits of avoiding the same amount of methane emissions 
amounts to 794 million Euros, resulting in net socio-economic benefits of 780 million 
Euros.  The  level  of  net  socio-economic  benefits  increases  to  866  million  Euros  for 
coal-related  methane  emission  abatement  measures  that  are  socially  optimal.  Thus, 
coal-related methane emissions abatement is very worthwhile taking into account the 
cost of methane emissions to society at low cost and at social cost abatement levels.  

There are other projections that arrive at very similar conclusions as these GAINS model 
projections in terms of the types of cost-effective methane abatement measures available 
in  the  coal  sector.  For  instance,  the  Climate  Clean  Air  Coalition/United  Nations 
Environment  Programme  May  2021  report  ‘Global  Methane  Assessment:  Benefits  and 
Costs of Mitigating Methane Emissions’. states that 55% to 98% of targeted measures in 
the  coal  sector  have  low  mitigation  costs  (of  less  than  18.1  euros  per  ton  of  CO2 
equivalent),  and  that  these  include  the  same  measures  included  in  GAINS  modelling, 
namely pre-mining degasification and recovery and oxidation of ventilation air methane 
as well as flooding of abandoned coal mines (see also further details in annex 5). 
Other  recent  analysis  of  methane  mitigation  measures  in  the  energy  sector165  also 
supports the cost effectiveness of such coal-related mitigation measures,  and concludes 
from  an  assessment  of  a  number  of  different  estimations  of  marginal  abatement  cost 
curves and maximum technical abatement potentials that prominent methane mitigation 
measures in the coal sector include pre-mining degasification, flooding abandoned mine, 
ventilation  air  methane  with  improved  ventilation,  open  flaring,  and  that  the  first  three 
measures can sometimes be achieved at no net cost. 

Responses from stakeholder consultations and European Parliament 

165  Ocko  et  al:  Acting  rapidly  to  deploy  readily  available  methane  mitigation  measures  by  sector  can 
immediately slow global warming, 25 January 2021. 

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In  responses  to  the  open  public  consultation,  as  regards  the  inclusion  of  mitigation 
measures of coal mine methane in the proposal, the public consultation yielded high and 
widespread support (80% of responses). Note that although the European coal federation, 
Euracoal,  did  not  respond positively, Polska Grupa Górnicza, which is  Poland’s largest 
mining group, did.  

Furthermore,  the  European  Parliament  offers  explicit  support  for  ambitious  mandatory 
requirements  to  reduce  methane  emissions  from  coal  mines  in  its  resolution  of  21 
October  2021  on  an  EU  strategy  to  reduce  methane  emissions166:  it    “expresses  strong 
support for mandatory MRV and LDAR for coal mine methane emissions, including the 
requirement for companies that own closed sites or Member States (for abandoned mines 
where no existing owner is liable) to effectively close and seal all abandoned sites in the 
EU as soon as possible and to adopt the same MRV and LDAR measures as for operating 
sites; appeals to the Commission to take appropriate action to ensure that Member States 
address  the  ownership  of  abandoned  sites  and  support  coal  mine  methane  mitigation”. 
There  are  in  addition  many  arguments  in  favour  of  including  coal  in  the  mitigation 
measures  of  the  proposal,  in  addition  to  the  wide  support  expressed  in  the  public 
consultation  and  the  high  share  of  coal-related  methane  emissions  in  the  EU  sector 
according to inventory data, as follows: 

1.  The  existence  of  proven  and  effective  regulations  in  the  EU  (such  as  France, 
Germany)  and  in  the  UK  which  have  led  to  significant  reductions  in  direct 
emissions  of  methane  in  these  countries  (from  operating  and/or  non-operating 
mines).  In  Germany  specifically,  in  the  case  of  methane  emissions  from 
abandoned  mines,  it  has  led  to  99%  of  recovery  and  utilisation  of  coal  mine 
methane. 

2.  In Poland (close to 70% of total methane emissions from coal mining in the EU) 
and  Romania  (second  biggest  emitter,  around  18%  of  emissions),  methane 
emissions from coal mines have fallen by only 17% for Poland, and have stayed 
the same for Romania, since 1990. EU level action is therefore clearly warranted. 

3.  Global coal mine methane emissions are likely to continue growing in the future, 
even with declining coal production because of continued increases in abandoned 
mine methane  emissions,  and exploitation  of deeper and  gassier deposits  due  to 
the exhaustion of shallow coal reserves167. 

4.  The measures to effectively reduce methane emissions from coal mines are well 

known and widely recognised: 

 

In the case of operating mines,  

o  In active underground mines, methane drainage can be used to lower the 
percentage  of  methane  in  the  air:  capturing  the  gas  to  prevent  it  from 
entering mine airways. Methane can be captured before, during and after 

166 2021/2006(INI) 
167 Global methane emissions from coal mining to continue growing even with declining coal production; 
Journal of Cleaner Production, February 2020. 

69 / 148 

 
 
 
                                                           
mining  by  pre-  and  post-mining  drainage  techniques,  respectively.  The 
recovered  methane  can  be  used  (most  commonly  for  power  generation, 
direct  thermal,  and  pipeline  injection)  or  flared  when  utilisation  is  not 
possible. 

o  Ventilation air from underground mines contains diluted concentrations of 
methane  and  is  referred  to  as  ventilation  air  methane  (VAM).  It  can  be 
mitigated  by  oxidation,  with  or  without  energy  recovery  or  used  as  a 
supplementary fuel (i.e: combustion air for boilers or turbines). 

 

In the  case of  closed  or  abandoned mines, methane emissions can  be abated 
via  flaring  of  excess  drained  gas,  exploitation  of  drained  gas  for  power 
generation, pipeline gas, chemical feedstock and others, and use or abatement 
by  oxidation  of  ventilation  air  methane.  Alternatively,  flooding  can  prevent 
methane emissions. 

However,  mitigating  coalmine  methane  in  operating  mines  can  be  challenging  as 
methane concentration of emissions is very low and can fluctuate in quality and quantity. 
The lower the concentration of methane, the more technically difficult and costly it is to 
abate168.  Taking  into  account  also  the  profitability  of  coal  mining  compared  to  other 
fossil fuels, the economic case for the mitigation of methane emissions from coal mines 
is therefore not as strong as for oil and gas operations. Indeed, the schemes which have 
been put in place in Europe all have in common that specific support mechanisms have 
been  put  in  place  to  recover  and  use  methane  from  operating  and/or  closed/abandoned 
mines for power generation which function with a dedicated feed-in tariff.  

The  European  Commission  has  on  two  occasions  provided  extensions  of  the  German 
state  aid  scheme169  (to  2021  and  to  2026),  on  the  basis  that  supporting  mine  gas 
utilisation  contributes  to  the  efforts  to  reduce  the  release  of  greenhouse  gases  and  also 
recognising that besides climate protection effects, using mine gas to produce electricity 
leads to primary energy savings, as this gas would otherwise simply be released into the 
atmosphere  and  instead  another  primary  resource  would  be  used  to  produce  electricity, 
with  associated  impacts  in  terms  of  greenhouse  gas  emissions  which  such  production 
would lead to. 

It is not within the legal scope of this proposal to address the issue of attribution of state 
aid  to  incentivise  recovery  and  use  of  coal  mine  methane  or  abandoned  mine  methane, 
which  is  within  the  remit  of  the  Energy  and  Environmental  State  Aid  Guidelines170, 
which at the moment of writing, the Commission is in the process of reviewing as well as 
consulting the public on171.   

168 IEA, World Energy Outlook 2019 
169 Decisions SA.38632 C(2014) and  SA.57779, EEG 2021 
170 COMMUNICATION FROM THE COMMISSION Guidelines on State aid for environmental 
protection and energy 2014-2020, https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52014XC0628(01)&from=EN 
171 https://ec.europa.eu/commission/presscorner/detail/en/IP_21_2784 

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In  summary,  option  2.3a  would  lead  to  achieving  a  socially  and  environmentally 
optimal outcome for that scope of methane emissions (including the oil, gas and coal 
sectors), and the net economic impacts linked to an environmentally and socially cost 
effective  abatement  level  is  significantly  positive.  In  conclusion,  option  2.3a  would 
meet objective 2. 

6.2.6  Option  2.4:  Mandatory  measure  to  achieve  a  certain  reduction  in 

methane emissions  

As explained under section 6.2.1, the modelling  of methane  emission abatement  that is 
used in policy area 2 does not allow for a distinction to be made between target-based or 
non-target based (prescriptive) instruments. Both would equally require choosing a level 
of abatement cost and including all the associated abatement measures included within it 
in the expectation that they would lead to the associated reductions in methane emissions 
that the model projects. From this, a target could be derived for a target-based instrument 
and included in policy, while for a prescriptive instrument it is the measures themselves 
which  would  be  included  in  policy.  This  explains  why  the  environmental  and  social 
impacts as well as the economic impacts of a target-based instrument can be considered 
to be the same as the equivalent impacts for prescriptive requirements such as in option 
2.2 or 2.3 (depending on the scope of emissions).  

Thus, there are no distinctions both in terms of efficiency of measures between the two 
types  of  instruments  or  in  terms  of  administrative  burden  and  compliance  costs  for 
companies  and/or  administrations.  Note  that  this  assumes  that  verification  costs  are 
equivalent  for  both  instruments,  although  this  is  a  less  important  point  given  that  there 
are  other,  more  important  reasons,  for  choosing  not  to  put  forward  option  2.4  as  a 
preferred option.  

There are two main ways that such target-based requirements could be set: 

1.  Absolute  targets:  which  represents  an  absolute  target  reduction  in  methane 

emissions of an activity or sector;  

2.  Intensity target: which represents a relative target reduction in methane emissions 

of an activity, usually expressed as a share of total production/energy sold.  

The latter is the type that all stakeholders (NGOs and industry included) in favour of such 
an instrument refer to in their policy recommendations to mitigate methane emissions in 
the  energy  sector.  The  advantage  of  such  an  approach  is  that  it  allows  straightforward 
comparisons between entities with different production levels.  

The  problem  common  to  all  these  types  of  requirements  is  that  without  accurate 
information on the levels and magnitude of methane emissions on which they are based, 
it is difficult  to set  adequate levels  of targets  and to  properly  assess their effectiveness. 
This was also widely recognised by respondents to the open public consultation: 94% of 
responses consider that such target-based requirements first need a robust measurement 
and reporting regime and that they require an accurate baseline understanding of the level 
of emissions before they can be implemented. 

71 / 148 

 
 
 
 
The only way, for instance, that one could gauge whether the OGCI initiative mentioned 
in  the  baseline  (or  any  target  on  methane  emission  reductions  by  any  entity,  whether 
company or country) is achieving the methane emission reductions it aims or claims to be 
achieving  is  if  accurate,  representative  and  independently  verified  methane  emissions 
data  based  on  direct  source-level  measurements  for  those  companies  was  readily 
available,  which  is  not  the  case  today.  This  is  the  reason  why  the  IEA  advises,  in  its 
recently  published  report  providing  recommendations  on  how  to  regulate  energy  sector 
methane emissions172, that prescriptive requirements  typically used to  mitigate methane 
emissions in the oil and fossil gas sector (which includes MRV, LDAR and restrictions 
on venting and flaring) can serve as a useful first step on the path to more flexible and 
economically efficient regulations like target-based requirements. The IEA also explains 
that  in  contrast  to  such  requirements,  prescriptive  requirements  are  relatively  simple  to 
administer  for  both  the  regulator  and  the  operators,  as  it  is  clear  what  must  be  done  to 
comply and it is relatively easy for regulators to determine if the standard has been met. 
The IEA also adds that such requirements have the potential for a significant impact on 
overall  emissions  but  that,  unlike  target-based  requirements,  they  do  not  require  an 
accurate  baseline  understanding  of  the  level  of  emissions  or  a  robust  measurement  and 
estimation regime. 

This means that success in proposing EU legislation which includes the preferred option 
in  policy  area  1  would,  in  due  course,  provide  the  opportunity  to  consider  such 
requirements. Indeed, one of the key justifications for developing robust MRV that leads 
to direct source-level methane emission measurements, reporting and verification is that 
it  is  the  necessary  basis  for  being  able  to  consider  a  much  broader  methane  emission 
mitigation  toolkit  than  we  are  currently  able  to  do.  And  it  is  something  that  many 
respondents  clearly  feel  strongly  about,  as  only  32%  of  responses  consider  that 
prescriptive mitigation requirements, (such as MRV, LDAR and venting and flaring), in 
and  of  themselves,  can  be  sufficient  to  drive  further  decreases  in  methane  emissions, 
though  64%  of  responses  consider  that  target-based  requirements  are  necessary  to 
achieve significant methane emissions reductions in the energy sector. 

In  summary,  while  option  2.4  would  target  the  same  levels  as  options  2.2  or  2.3a 
(depending  on  the  scope  of  emissions)  in  terms  of  both  environmental/social  and 
economic  impacts/administrative  burden,  its  successful  implementation  (i.e.  accurate 
calibration  of  a  target)  is  conditional  on  the  availability  of  robust  MRV  of  energy-
related  methane  emissions  which  is  not  yet  in  place  in  the  EU,  and  which  is  the 
objective of policy area 1.  

172 IEA. Driving Down Methane Leaks from the Oil and Gas Industry: A Regulatory Roadmap and Toolkit, 
January 2021. https://www.iea.org /reports/driving-down-methane-leaks-from-the-oil-and-gas-industry. 

72 / 148 

 
 
 
 
                                                           
6.3 Policy  area  3  –  Measuring,  reporting  and  mitigating  methane  emissions 

linked to EU fossil fuel consumption but occurring outside the EU 

6.3.1  General considerations for policy area 3 

The assessment of impacts under this policy area was not done on the basis of modelling 
specifically developed for this report. And as full GAINS methane emissions projections 
are  not  available  for  non-EU  countries,  the  analysis  of  the  environmental,  social  and 
economic impacts  in  this  section is  based on estimations  from  the  International  Energy 
Agency173  of  methane  emissions  in  2019  and  reductions  that  could  be  achieved  under 
various different cost  considerations (assessed using the same definitions  and levels of 
abatement  costs as for policy area 2, as  included in  sections 6.1 and 6.2.1) in  a sample 
composed of the largest exporting countries of oil and fossil gas to the EU: 

  Oil: Russia, Saudi Arabia, US, Iraq, Norway;  
  Fossil gas: Russia, Norway, Algeria, Qatar, Nigeria, US.  

The detailed results are included in the tables A.5.5 and A.5.6 in Annex 5. The IEA did 
not carry out similar analysis for the coal sector, and no such estimations are available for 
the coal sector from other sources. 

Those estimations are not specifically linked to EU consumption, as they cover all oil and 
fossil  gas  related  methane  emissions  occurring  in  those  countries.  No  equivalent 
estimations are available from the IEA, or from any other organisation, focusing only on 
methane  emissions  linked  to  EU  consumption  of  fossil  energy  but  occurring  in  third 
countries. They therefore  cannot  be used to  make quantitative distinctions  between one 
proposed option or the other. Another reason why those numbers cannot be used to make 
such distinctions is because all policy options are the same in terms of targeted scope of 
emissions and have the same objective in common, which is to improve information on, 
and incentivise mitigation of, methane emissions sources taking place outside of the EU 
but related to EU fossil fuel consumption. They therefore primarily serve to highlight the 
magnitude of the methane emissions estimated to originate from key exporters of fossil 
energy to the EU in comparison to methane emissions occurring in these same sectors in 
the EU, as well as to highlight – in the same way as was done using GAINS projections 
in  policy  area  2  –  the  share  of  those  methane  emissions  that  can  be  abated  at  different 
levels of abatement costs.  

Thus, rather than distinguish the different policy options assessed under this policy area 
by attempting to estimate and attribute different level of emission reduction abatement to 
each,  the  assessment  of  impacts  of  options  under  this  policy  area  focuses  instead  on 
qualitatively evaluating whether the options could realistically be implemented in order 
to incentivise such reductions in methane emissions in exporting countries in the EU via 
the use of cost-effective measures as highlighted by the IEA, and achieve the associated 
benefits, and therefore fulfil specific objective 3. 

173 IEA Methane Tracker 2020 (https://www.iea.org/reports/methane-tracker-2020) 

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Those estimations are not provided according to any time-scale, and as such represent the 
sum of all methane emissions which the IEA considers technically feasible to achieve by 
those  countries  in  the  foreseeable  future.  And  the  IEA  did  not  attempt  to  project  what 
amount  of  those  emission  reductions  are  already  likely  to  take  place  under  a  baseline 
(business as usual scenario).  

While  these  estimations  focus  on  a  sample  of  main  exporting  countries  to  the  EU,  all 
options under this policy area would equally aim to achieve methane emission reductions 
in all exporting countries to the EU, not just in those listed above. 

As regards the specific abatement measures available in the oil and gas sectors of these 
countries which the IEA considers in its estimations, and which are relevant at all levels 
of abatement costs, these are very comparable to the measures included in GAINS, and 
include  upstream  and  downstream  LDAR,  replacement  of  existing  methane-emitting 
devices via retrofitting or replacing them with lower-emitting versions and installing new 
emission control devices that can reduce or avoid large sources of vented emissions. 

There  was  high  and  widespread  support  expressed  via  responses  to  the  public 
consultation  on  the  notion  of  covering  all  emissions  linked  to  EU  fossil  energy 
consumption, including those occurring outside the EU. These responses are conveyed in 
more detail below, under the relevant options. 

Environmental and social impacts 

In  terms  of  the  environmental  and  social  impacts  implied  by  these  estimations  in  the 
above tables, the following represent a number of key findings, in comparison to options 
2.1/2.2, which cover the same sub-sectors, oil and fossil gas, (see table A.5.5): 

1.  The amount of methane emission reductions that can be abated at negative or zero 
costs  in  those  key  countries  represents  a  total  of  8,504  kilotonnes  of  methane, 
compared to 292 kilotonnes of methane for the EU (in 2030):  which is 29 times 
greater for those key exporting countries than for the EU; 

2.  The  amount  of  methane  emission  reductions  that  can  be  abated  at  low  costs  or 
less  in  these  key  countries  represents  a  total  of  25,255  kilotonnes  of  methane, 
compared to 361 kilotonnes of methane for the EU (in 2030): which is 69 times 
greater for those key exporting countries than for the EU; 

3.  The  amount  of  methane  emission 

that  can  be  abated  at 
environmental/social level of abatement costs in those key countries represents a 
total of 25,513 kilotonnes of methane, compared to 458 kilotonnes of methane for 
the EU (in 2030): which is 56 times greater for those key exporting countries than 
for the EU. 

reductions 

4.  The  environmental  and  social  benefits  associated  with  the  socially  and 
environmentally  cost  effective  methane  emission  reductions  achievable  in  those 
key exporting countries (comparable figures for EU in brackets) are as follows: 

  36,656 (653) annual premature deaths due to ozone prevented; 

  102,535 

(1,825)  annual  asthma-related  accident  and  emergency 

department visits avoided; 

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  2,307 (41) annual hospitalizations avoided; 

  3,716,883  (66,062)  tons  of  annual  losses  of  wheat,  soybean,  maize  and 

rice due to ozone exposure avoided; 

  10,253  (182)  million  hours  per  year  of  work  loss  due  to  extreme  heat 

avoided. 

Economic impacts  

In terms of the economic impacts and administrative burden implied by these estimations 
in the above tables, the following represent a number of key findings, in comparison to 
options 2.1/2.2 (see table A.5.6): 

1.  33% of the share of total 2019 emissions in these key countries can be abated cost 
effectively  at  zero  or  negative  costs.  For  comparison,  the  equivalent  proportion 
for the EU (options 2.1/2.2) is between 44% and 64%, depending on the year; 

2.  98% of the share of total 2019 emissions in these key countries can be abated cost 
effectively at low costs or less. For comparison, the equivalent proportion for the 
EU (options 2.1/2.2) is between 54% and 66%, depending on the year;  

3.  99% of the share of total 2019 emissions in these key exporting countries can be 
abated  cost  effectively  from  an  environmental/social  perspective,  at  costs  less 
than  social  and  environmental  costs  of  methane  emissions.  For  comparison,  the 
equivalent  proportion  for  the  EU  (options  2.1/2.2)  is  between  65%  and  68%, 
depending  on  the  year.  The  total  costs  of  measures  to  achieve  socially  and 
environmentally  cost  effective  methane  emission  reductions  in  those  key 
exporting  countries  amounts  to  2,607  million  USD  (or  2,216  million  Euros).  In 
comparison, the total environmental/social benefits of avoiding the same amount 
of methane emissions is 110,225 million USD (or 93,691 million Euros), yielding 
net social and environmental benefits of 107,618 million USD (or 91,475 million 
euros). For the EU, the comparable net social and environmental benefits (option 
2.1/2.2) are 1,576 million Euros. 

In  conclusion,  though  the  proportion  of  methane  emissions  that  can  be  abated  in  those 
key exporting countries at negative or zero costs is less than for the EU, a much greater 
share of emissions can be abated at low costs or less in those export countries than in the 
EU.  And  as  per  the  EU,  the  costs  of  abating  those  methane  emissions  are  significantly 
less  than  the  total  social  benefits.  Taking  into  account  that  abatement  which  is  cost 
effective from the point of view of companies could already lead to as much as 25,255 
kilotonnes of methane being abated in those countries, compared to only 361 kilotonnes 
of  methane  in  the  EU,  the  case  for  action  to  achieve  further  abatement  of  methane 
emissions in countries exporting to the EU – as well as in the EU - is clear from a social 
and environmental perspective. 

It  should  be  noted  that,  as  with  GAINS  projections,  while  IEA  estimations  take  into 
account  the  costs  of  abatement  to  the  companies,  they  do  not  take  into  account  other 
costs,  such  as  costs  to  competent  authorities  to  verify  that  measures  are  adequately 
implemented  and  other  costs  of  ensuring  compliance  and  enforcement,  and  no 
estimations of those costs are readily available. For a full calculation of the net benefits 

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(in  monetary  terms)  of  abatement  measures  available  at  all  levels  of  abatement  costs, 
such  costs  would  have  to  be  estimated  and  deducted  from  the  net  socio-economic 
benefits  reported  below  under  the  various  options.  However,  as  table  A.5.6  clearly 
demonstrates, the levels of benefits of methane abatement are many times higher than the 
total  net  costs  of  abatement  measures.  This  is  true  for  all  levels  of  cost  abatement,  for 
which the net benefits would more than adequately cover all those additional costs which 
would accrue to parties other than operators as a result of these measures.   

A similar point can also be made as regards the likely impact of such measures on energy 
prices as was made with GAINS projections, which are likely to be small given the small 
amount of total costs of those measures at all level of abatement  costs compared to the 
vastly greater amounts spent on energy. This would be even more the case in the current 
context  of  very  high  energy  prices.  The  IEA,  which  estimates  that  more  than  70%  of 
current emissions from oil and gas operations globally are technically feasible to prevent 
and  around  45%  could  typically  be  avoided  at  no  net  cost  because  the  value  of  the 
captured  gas  is  higher  than  the  cost  of  the  abatement  measure,  states  that  “this  share 
would be much higher at the moment, given the record highs in natural gas prices” 174.  

6.3.2  Option 3.0: Business as usual 

Environmental and social impacts 

With the  successful  launch  of  the  IMEO  (see  section  5.1  for  more  details),  there  is  the 
expectation  that  in  the  next  few  years,  it  will  fulfil  its  remit  of  collecting,  reconciling, 
verifying and publishing anthropogenic methane emissions data at a global level, thereby 
providing much needed transparency on global methane emissions. 

The  Commission  is  fully  committed  to  working  in  cooperation  with  the  EU’s  energy 
partner countries to the EU for their endorsement of and commitment to the IMEO, and 
towards ensuring that its financing is fully secured.  

The  Commission  will  also  work  with  the  IMEO  towards  the  delivery  of  a  market 
transparency tool such  as the Methane Supply  Index, as mentioned in the EU Methane 
Strategy. It would provide methane emission information from different sources of fossil 
energy  from  around  the  globe,  thereby  empowering  buyers  of  fossil  energy  for 
consumption in the EU or elsewhere to voluntarily make informed purchasing decisions 
on the basis of the methane emissions of fossil energy sources. This would complement 
well  the  primary  objective  of  the  IMEO  to  become  a  global  information  provider  on 
methane emissions by using the information which it will gather to incentivise also the 
reduction of methane emissions which such a tool would promote.     

The widespread publication and recognition of such data could help operators to address 
the  awareness  gap  and  provide  information  about  cost-effective  measures  available  to 

174 
combat-near-term-global-warming. 

https://www.iea.org/news/tackling-methane-emissions-from-fossil-fuel-operations-is-essential-to-

76 / 148 

 
 
 
 
                                                           
them.  However,  the  external  environmental  and  social  benefits  of  methane  emissions 
abatement would remain unaddressed.. 

In the responses to the open public consultation, 96% of responses are supportive of the 
setting  up  of  an  International  Methane  Emissions  Observatory  (IMEO)  and  the 
development of a methane supply index (MSI) at EU and international level, composed 
using existing and reported data from countries’ emissions inventories as well as satellite 
data and, in time, global data processed and published by the IMEO. 

However, respondents also conveyed the following opinions:  

1.  Only 12% of responses consider that such a market transparency tool should play 
a  central  role,  and  be  the  key  instrument  to  provide  the  energy  sector  the 
incentives to reduce their methane emissions; 

2.  70% of responses consider that such a market transparency tool should play a role 
alongside  and  together  with  obligations  on  MRV,  LDAR  and  limits  on  venting 
and flaring on exporters of fossil energy into the EU; 

3.  5% of responses consider that such a market transparency tool should play a role 
together  with  methane  intensity  standards  on  exporters  of  fossil  energy  into  the 
EU. 

For these reasons, while it is considered that the described diplomatic actions should be 
pursued  in  any  case  and  can  contribute  towards  achieving  the  objectives  under  policy 
area 3, they are unlikely to be sufficient.  

Economic impacts  

In terms of economic impacts, if it were to successfully incentivise abatement measures 
equivalent to social/environmentally optimal levels of methane emissions reductions, the 
impacts  would  be  equivalent  to  those  described  in  6.3.1.  at  comparable  level  of 
abatement  costs.  While  the  costs  on  companies  would  be  higher  than  at  commercial 
levels  of  cost  effectiveness  (zero/negative  or  low  costs),  it  would  also  result  in  much 
higher social/environmental benefits. 

In conclusion, the outcome of a business  as usual   option in terms of environmental 
and social impacts are too uncertain and insufficient and would therefore unlikely lead 
to an environmentally and socially optimal outcome required to meet specific objective 
3. 

6.3.3  Option  3.1:  Mandatory  measures  on  measuring,  reporting  and 

mitigation of fossil energy sector emissions 

Environmental and social impacts 

Option  3.1  mirrors  two  options  that  are  assessed  in  the  previous  policy  areas,  in  the 
context  of  methane  emissions  occurring  in  the  EU  territory:  the  mandatory  measures 
included  in  options  1.2  and  2.3.  The  appeal  of  such  an  option  is  that  it  is  based  on  a 

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proportionality rationale that if mandatory requirements on methane emissions should be 
imposed  on  companies  based  in  the  EU  which  produce  or  transport  energy  which  is 
consumed in  the EU, then these same types of measures should equally be imposed on 
companies that produce or transport energy outside of the EU but which is destined for 
final consumption in the EU.   

In terms of environmental and social impacts, it could therefore at least theoretically be 
considered  that,  as  per  the  mandatory  measures  under  policy  areas  1  and  2,  such  an 
option  could  similarly  lead  to  a  level  of  methane  emissions  abatement,  and  associated 
benefits, equivalent to a social/environmental outcome for those countries in question (as 
highlighted in section 6.3.1). 

Economic impact and administrative burden 

In terms of economic and social impacts, it could equally be considered that, as per the 
mandatory  measures  under  policy  areas  1  and  2,  if  it  were  to  successfully  incentivise 
abatement  measures  equivalent  to  social/environmentally  optimal  levels  of  methane 
emissions  reductions,  the  impacts  would  be  equivalent  to  those  described  in  6.3.1.  for 
that  level  of  abatement  costs.  While  the  costs  on  companies  would  be  higher  than  at 
commercial levels of abatement costs (zero/negative or low costs), it would also result in 
much higher social/environmental benefits. 

But  extending  obligations  to  non-EU  actors  would  imply  also    the  need  to  ensure 
compliance and verification outside of the EU. Though this would represent extra costs, 
as  already  explained,  the  net  benefits  of  abating  methane  emissions  would  adequately 
cover  those  costs. The  issue  is  rather  about  how  to  effectively  ensure  that  detailed  EU 
requirements  on  monitoring,  measuring  and  reporting  of  methane  emissions,  repair  of 
leaks  and  limits  to  venting  and  flaring  along  a  complex  supply  chain  are  properly 
implemented  and  verified  in  countries  beyond  the  EU’s  jurisdictions.  It  is  vastly  more 
complicated  than  verifying  whether  a  product  which  has  been  exported  to  the  EU  has 
been  made  according  to  EU  standards,  and  certified  as  such.  With  further  technology 
improvements,  such  as  increasingly  accurate  satellite  data,  such  verifications  may 
become possible and reliable in the future. 

The additional question is what penalties to issue for non-compliance. Stakeholders that 
are supportive of extending all the requirements on operators based in the EU to non-EU 
operators are unanimous in asking to condition EU market entry  of fossil energy on full 
compliance with the future EU requirements. In practice, this would mean not allowing 
imports  of  oil,  fossil  gas  or  coal  from  countries  that  do  not  comply  with  the  same  or 
comparable  requirements  to  monitor,  measure  and  report  methane  emissions,  repair 
methane leaks or limit venting or flaring of methane that are imposed on EU operators.  

Stakeholders defending such an approach consider that such an approach would be WTO 
compliant  on  the  basis  that  under  WTO  jurisprudence,  the  EU  may  condition  market 
access  upon  compliance  with  certain  measures  so  long  as  well-defined  conditions  are 
met. These conditions are, among others, that the measures are equally applicable to EU 
domestic actors, that they are necessary to achieve the level of protection set out by the 
EU,  that  they  are  not  applied  in  a  discriminatory  manner  and  afford  third  country 

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exporters to the EU the ability to comply with alternative measures that are comparable 
in effectiveness. 

And  indeed,  in  terms  of  WTO  implications,  this  option  would  not:  (i)  envisage  more 
stringent  requirements  for imported  goods;  (ii) result in  a more stringent application of 
the rules for imported compared to domestic goods, in line with WTO rules. By virtue of 
the mandatory aspect of this option, it would be considered a “technical regulation” and 
would  therefore  require  notification  to  the WTO.   There  are  however  two  major  issues 
with the proposal to condition market entry on compliance with regulations on methane 
emissions of fossil energy: 

1.  In the context of the policy options in policy areas 1 and 2 on MRV, LDAR and 
on  venting  and  flaring,  covering  EU  operators  only,  the  intention  is  not  to 
condition market entry upon compliance with EU methane legislation, and none 
of the existing relevant EU regulations which either regulate MRV or mitigation 
of  methane  emissions  (such  as  the  Monitoring  Mechanism  Regulation,  the 
European Pollutant Registry or the  Industrial Emissions Directive) have such an 
approach, so doing it for exports into the EU cannot be envisaged;   

2.  Given  that  coal,  oil  and  fossil  gas  together  make  up  70%  of  the  EU’s  energy 
consumption and given that the EU is dependent on imports for 70% of its hard 
coal  consumption,  97%  of  its  oil  consumption,  and  90%  of  its  fossil  gas 
consumption175, such a  measure  could put EU energy security  at  risk.  Note that 
EU  regulations  that  cover  methane  emissions  in  their  scope  such  as  the  Effort 
Sharing Regulation, the Industrial Emissions Directive or the European Pollutant 
Release  and Transfer Register, do not include exporters of fossil energy in their 
scope.  

Responses from stakeholder consultations and the European Parliament 

Such an option did however receive wide support in the open public consultation: 72% of 
responses consider that EU legislation on methane emissions in the energy sector should 
extend  obligations  to  companies  importing  fossil  energy  into  the  EU/companies 
exporting  fossil  energy  to  the  EU.  In  addition,  65%  of  responses  consider  that  it  is 
feasible to impose the same obligations on MRV, LDAR and venting and flaring equally 
on all actors of the oil and gas value chain for oil and gas consumed in the EU, including 
actors from outside of the EU. 

It is also supported by the European Parliament. In its resolution of 21 October 2021 on 
an EU strategy to reduce methane emissions176, it “calls on the Commission to make all 
fossil fuel imports into the Union conditional on their compliance with EU regulations on 
MRV and LDAR and the rules on venting and flaring, applicable to the entire fossil fuel 
supply chain,  up to  and  including production; believes that a credible system has to  be 
put  in  place  to  ensure  that  imports  are  compliant  with  EU  requirements  and  that  the 
Commission  should  therefore  develop  a  robust  independent  methodology  to  assess  the 

175 On the basis of 2019 Eurostat data. 
176 2021/2006(INI) 

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compliance of imports with EU requirements; stresses that these rules should enter into 
force as soon as possible, while paying due regard to energy security”. 

While  this  option  could  have  the  potential  to  meet  specific  objective  3,  based  on  the 
above, it is considered that its environmental and social benefits are uncertain, as the 
enforcement  and  the  verification  of  emission  reductions  outside  the  EU  would  be 
challenging. Furthermore, beyond the costs of compliance occurring outside the EU, 
this  option  could  entail  security  of  supply  risks  for  the  EU  with  potential  direct 
economic impacts.  

6.3.4  Option 3.2: Transparency measure on   MRV  and  mitigation  of 

methane emissions of fossil fuels consumed in the EU 

Environmental and social impacts 

This option represents an alternative approach to option 3.1. 

Compliance would require proof of the following requirements: 

1.  Equivalent  (comparable  or  more  stringent)  methane  regulations  in  place  in  the 

country of origin supplying the fossil fuels to the EU. 

2.  Until  such  a  time  when  regulatory  equivalence  is  ensured,  proof  that  the  fossil 
energy is being purchased from a company that has signed up to the OGMP for 
oil  and/or  fossil  gas  companies,  and  for  coal,  at  a  later  date,  according  to 
agreement on MRV methodology developed under tertiary EU legislation. 

Information is already being published in different independent publications and updates 
provided  by  methane  regulatory  experts  on  the  energy  sector  methane  regulations  in 
place  across  the  globe177,  and  on  the  basis  of  membership  information  from  OGMP178 
and could facilitate verification of the information in the list.  

Compliance with the requirements of this measure would be relatively simple to assess. It 
would  require  to  establish  a  list  of  all  exporting  countries  of  fossil  energy  to  the  EU 
which would also contain a list of all exporting companies from those countries, and for 
each,  respectively,  indications  of  whether  the  countries  comply  with  point  1,  and 
companies  with  point  2,  above,  would  be  provided  which  would  inform  importers  of 
fossil  energy  to  the  EU  (or  elsewhere  for  that  matter)  who  would  be  free  to  choose 
whether to base their purchasing decision on such a list or not.  

The  second  part  of  this  option  –  the  setting-up  of  a  super  emitter  global  methane 
monitoring  tool  -  represents  an  additional  incentive,  as  it  would  further  encourage  real 
and demonstrable results from implementation of equivalent methane regulations and/or 
effective  mitigation  actions  by  companies  supplying  fossil  energy  to  the  EU.  It  would 

177  The  most  recent  such  publication  which  provides  a  very  detailed  update  on  energy  sector  methane 
regulations across the globe is the IEA’s Driving Down Methane Leaks from the Oil and Gas Industry: A 
Regulatory  Roadmap  and  Toolkit,  January  2021.  https://www.iea.org  /reports/driving-down-methane-
leaks-from-the-oil-and-gas-industry. 
178 http://ogmpartnership.com/partners. 

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achieve that by setting up the first official high emitter global methane monitoring tool, 
analysing and regularly publishing the results from global airborne imagery surveys from 
the  EU’s  Copernicus  satellites,  confirming  the  location  of  large,  intermittent,  methane 
emissions caused by oil, gas or coal plants.  

This option would not duplicate what the IMEO is aiming to do (baseline 3.0), as IMEO 
does not plan to produce a high emitter monitoring tool.  

This option would thus enhance transparency and improve the possibility of wider uptake 
of methane mitigation across the globe. In addition, this option would further incentivise 
international companies to sign up to OGMP or to adopt similar measurement, reporting 
and mitigation measures as per EU legislation. 

In  terms  of  environmental  and  social  impacts,  it  is  considered  that  this  option  has  a 
realistic  chance  of  effectively  leading  to  a  level  of  methane  emissions  abatement,  and 
associated benefits, equivalent to a social/environmental outcome for those countries in 
question (as highlighted in section 6.3.1). 

Economic impacts and administrative burden 

In terms of economic impacts, if it were to successfully incentivise abatement measures 
equivalent to social/environmentally optimal levels of methane emissions  reductions, the 
impacts  would  be  equivalent  to  those  described  in  6.3.1.  at  comparable  level  of 
abatement  costs.  While  the  costs  on  companies  would  be  higher  than  at  commercial 
levels of abatement costs (zero/negative or low costs), it would also result in much higher 
social/environmental benefits. 

Such an option would not incur the additional economic costs which are discussed in the 
case of option 3.1: 

  Market  access  to  the  EU  would  not  be  conditioned  upon  compliance  with 
regulatory equivalence or OGMP membership. It could not therefore result in any 
risks to security of energy supplies. 

 

In  terms  of WTO  implications,  the  transparency  list  would  still  have  to  comply 
with  WTO  rules,  and  in  particular  that  it  would  not  result  in  a  more  stringent 
application of the rules  for imported goods  compared to  EU  goods  and also not 
create  unnecessary  obstacles  to  international  trade.  But  by  virtue  of  the  non-
mandatory  aspect  of  this  option,  it  would  not  require  notification  to  the  WTO, 
unlike option 3.1.  

  By requiring regulatory equivalence, rather than an obligation to comply with EU 
law,  it  does  away  with  all  the  main  enforcement  and  compliance  challenges 
mentioned under option 3.1. 

As regards the costs of verifying the information requirements for the  transparency list, 
we consider that these should be limited within the scope of current available resources 
of the Commission. As regards the costs of setting up the methane monitoring tool, the 
satellite information is already publically available for analysis and there are a number of 
existing  private  or  independently  funded  initiatives  which  are  undertaking  the  analysis 
and  publishing  the  results.  The  costs  of  providing  a  regularly  updated  platform  which 

81 / 148 

 
 
 
would bring together in one place all the results to ensure such monitoring would also be 
limited. 

In  summary,  option  3.2  would  lead  to  achieving  a  socially  and  environmentally 
adequate  outcome  and  the  net  economic  impacts  linked  to  an  environmentally  and 
socially cost effective abatement level is significantly positive. In conclusion, option 3.3 
is deemed to meet objective 3 and is considered the most proportionate option in Policy 
area 3. 

6.3.5  Option  3.3:  Legislative  measure  to  achieve  a  certain  reduction  in 

methane emissions 

In  the  open  public  consultation,  86%  of  responses  are  supportive  of  EU  legislation 
imposing  emission  reduction  requirements  on  companies  exporting  fossil  energy  to  the 
EU. 

In spite of the high support as regards the possibility to impose such a requirement also 
on  companies  exporting  fossil  energy  to  the  EU,  the  same  considerations  apply  (as 
regards  the  effectiveness  of  specific  measures  and  the  uncertainties  of  setting  targets 
while lacking accurate data) as under policy area 2. Before being in a position to consider 
the  possible  added  value  of  such  a  requirement,  accurate,  direct  source-level  methane 
emission  measurements  from  other  parts  of  the  world  which  supply  the  EU  with  fossil 
energy would be necessary. Furthermore, in order to ensure compliance with WTO rules, 
such a requirement would first have to be put in place in the EU. Only then could it be 
considered also for all imports of fossil energy into the EU. 

7.  HOW DO THE OPTIONS COMPARE? 

Building on the assessment of the impacts of the different options in the previous section, 
this  section  compares  the  options  against  the  following  criteria,  using  the  business  as 
usual scenario as the reference: 

-  Effectiveness:  the  extent  to  which  they  would  achieve  the  objectives  set  out  in 
Section  4,  with  the  overall  aim  to  reduce  methane  emissions  linked  to  the 
consumption  of  fossil  energy  in  the  EU.  The  ranking  of  options  is  therefore  in 
terms  of  the  level  of  methane  emissions  abatement,  and  associated  social  and 
environmental benefits, achieved (see tables A.5.3 and A.5.4 for policy area 2 and 
tables A..5 and A.5.6 for policy area 3). In the case of policy area 1, the ranking is 
in terms of the scope of emissions covered by MRV;  

-  Coherence:  provides  an  assessment  of  the  coherence  of  each  option  with  other 
relevant EU policies as well as with the legislative package proposed in July 2021 
delivering the Green Deal, which is to make the EU’s policies fit for reducing net 
greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels;  

-  Efficiency:  provides  a  ranking  of  the  options  according  to  level  of  socio-
economic benefits, including also the consideration of administrative burden (see 
table A.5.3 for policy area 2 and table A.5.6 for policy area 3).  

82 / 148 

 
 
 
 
The  tables  provide  a  summary  of  the  assessment  of  the  policy  options  against  these 
criteria. Each policy option is rated between "---" (very negative), 0 (neutral) and "+++" 
(very positive). NP is applied when no estimation was possible. 

Policy area 1:  Improving measuring and reporting of methane emissions in the EU 

Criteria  
Options ↓ 
Option 1.0: BAU scenario 
Option 1.1: (Legislative measure on measuring 
and reporting of oil and fossil gas companies) 
Option 1.2: (Legislative measure on measuring 
and reporting of oil, fossil gas and coal 
companies) 
Option 1.3: 
(Legislative measure on measuring and reporting 
of direct and indirect emissions) 

Explanations for the table above: 

Effectiveness 

Coherence 

Efficiency 

0 

+ 

++ 

0 

++ 

0 

++ 

+++ 

+++ 

+++ 

- 

NP 

  Option  1.2  will  be  more  effective  than  option  1.1  given  the  higher  scope  of 
emissions, and associated environmental and social benefits, that it entails while 
option 1.3 will have the highest level of effectiveness; 

  Coherence  is  considered  to  be  high  for  all  options  other  than  the  option  which 
includes indirect emissions due to the risk of double regulation. Coherence for the 
option  that  includes  coal  is  considered  to  be  higher  than  for  the  option  that 
includes only oil and gas as excluding methane emissions from the coal sector, a 
major  fossil  source,  would  not  be  in  line  with  the  overall  aim  of  existing  EU 
climate  and  renewable  legislation  as  well  as  the  overall  objectives  of  the 
legislative package proposed in July 2021 delivering the Green Deal, which is to 
make the EU’s policies fit for reducing net greenhouse gas emissions by at least 
55% by 2030, compared to 1990 levels; 

 

In the absence of quantitative data on costs and benefits of MRV, but  assuming 
on the basis of the results of the survey of the oil and gas industry that they are 
unlikely to be significant, and further assuming this to hold true also for coal, we 
consider  that  efficiency  is  likely  to  be    highest  for  option  1.2  given  the 
expectation  that  better  MRV  will  lead  to  better  and  more  targeted  methane 
emissions  abatement,  which  would  allow  greater  socio-economic  benefits  to  be 
achieved under option 2.3a (see next table below as well as table A.5.3).  

  Option 1.3 scores the highest in terms of effectiveness due to the higher level of 
emissions that would be captured by inclusion of indirect emissions but scores a 
negative  in  terms  of  coherence  as  it  would  amount  to  double  regulation.  No 
information is available, qualitative or otherwise, on the costs or benefits of MRV 
of indirect emissions, making it impossible to assess the efficiency of option 1.3. 

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Policy area 2 - Mitigation of methane emissions in the EU 

Criteria  
Options ↓ 
Option 2.0: BAU scenario 
Option 2.1: (Commission guidance on mitigation of 
methane emissions in the oil and fossil gas sectors) 
Option 2.2: (Legislative measure on mitigation of 
methane emissions in the oil and fossil gas sectors) 
Option 2.3a: 
(Legislative measure on mitigation of methane 
emissions in the oil, fossil gas and coal sectors) 
Option 2.3b: 
(Legislative measure on mitigation of methane 
emissions in the oil, fossil gas and coal sectors as well as 
indirect emissions) 
Option 2.4: 
(Legislative measure to achieve a certain reduction in 
methane emissions via a performance requirement) 

Explanations for table above: 

Effectiveness  Coherence 

Efficiency 

0 

- 

+ 

0 

++ 

++ 

0 

+ 

++ 

++ 

+++ 

+++ 

+++ 

++ 

- 

NP 

+++ 

+++ 

  Options  2.1  is  ineffective  as  its  outcome  is  too  uncertain.  Option  2.3a  will  be 
more  effective  than  option  2.2  given  the  higher  scope  of  emissions,  and 
associated  social  and  environmental  benefits,  that  it  entails.  Option  2.3b  scores 
the  highest  in  terms  of  effectiveness  due  to  the  higher  level  of  emissions  that 
would be captured by inclusion of indirect emissions.  

  Coherence with other policy objectives are considered to be high for all options 
other than the option which includes indirect emissions due to the risk of double 
regulation. Coherence for the option that includes coal is considered to be higher 
than for the options that include only oil and gas as excluding methane emissions 
from the coal sector, a major fossil source, would not be in line with the overall 
aim of existing EU climate and renewable legislation as well as the overall aim of 
the legislative package proposed in July 2021 delivering the Green Deal, which is 
to  make  the  EU’s  policies  fit  for  reducing  net  greenhouse  gas  emissions  by  at 
least 55% by 2030, compared to 1990 levels; 

  Efficiency is highest for option 2.3a as setting mandatory measures on mitigation 
of  methane  emissions  in  the  oil,  fossil  gas  and  coal  sectors  would  lead  to  the 
highest socio-economic benefits. Option 2.2 achieves the second highest level of 
socio-economic benefits. (see table A.5.4). Option 2.1 only achieves abatement at 
a  level  of  cost-effectiveness  which  is  optimal  from  a  company  perspective  and 
therefore  achieves  the  lowest  socio-economic  benefits  of  the  three  options.  No 
information  is  available,  qualitative  or  otherwise,  on  the  costs  or  benefits  of 
those 
abatement  of 
characteristics for option 1.3. 

indirect  emissions,  making 

impossible 

to  assess 

it 

  For  reasons  explained  in  the  section  on  the  impacts  of  options,  there  are  no 
differences  shown  here  between  prescriptive  requirements  and  performance 

84 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
requirements for the same scope of emissions, which explains why option 2.4 is 
considered  to  be  equivalent  to  option  2.3a,  even  if  it  isn’t  an  option  that  would 
make sense to implement this point in time 

Policy  area  3  –  Measuring,  reporting  and  mitigating  methane  emissions  linked  to 
EU fossil fuel consumption but occurring outside the EU 

Criteria  
Options ↓ 
Option 3.0: BAU scenario 
Option 3.1: (Legislative measure on measuring, reporting 
and mitigation of fossil energy sector emissions) 
Option 3.2: 
(Non-legislative measure on measuring, reporting and 
mitigation of fossil energy sector emissions) 
Option 3.3: 
(Legislative measure to achieve a certain reduction in 
methane emissions via a performance requirement) 

Effectiveness  Coherence  Efficiency 

0 

+ 

0 

+++ 

0 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

Explanations for table above: 

  Differences  in  effectiveness  are  explained  in  more  detail  in  the  section  on  the 
impacts  of the various options.  In summary, the  preferred option (option  3.2) is 
considered more effective than option 3.1 as it is deemed most likely to succeed 
in reducing the methane emissions linked to fossil energy consumption in the EU 
but occurring outside the EU territory;   

  Coherence with other policy objectives are considered to be equally high for all 
options. This is because all options assessed are considered to be equally coherent 
with  either  existing  EU  climate  or  renewable  energy  legislation  as  well  as  the 
overall aim of the legislative package proposed in July 2021 delivering the Green 
Deal,  which  is  to  make  the  EU’s  policies  fit  for  reducing  net  greenhouse  gas 
emissions by at least 55% by 2030, compared to 1990 levels; 

  As regards a relative assessment of the various options on the basis of efficiency, 
this is not possible given that the estimated costs and benefits under policy area 3 
are  equally  relevant  for  all  options,  and  given  that  there  is  no  distinction  in  the 
targeted scope of emissions between options. Thus, the efficiency of the various 
options are considered to be equivalent; 

8.  PREFERRED OPTION 

The preferred policy option is the combination of the preferred options under each policy 
area. This includes legislative measures prescribing compulsory MRV, leak detection and 
repair  and  rules  on  venting  and  faring  covering  the  oil,  gas  and  coal  sectors,  both  for 
operating  and  closed  mines  (options  1.2  and  2.3),  and  a  transparency  list  plus  a  high 
methane  emitter  monitoring  tool  (option  3.2)  to  increase  transparency  and  thereby 

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provide incentives to reduce methane emissions in relation to fossil energy consumed in 
the EU, including that which is imported from global suppliers. 

For  the  reasons  explained  earlier,  it  is  not  recommend  to  propose  an  emission 
reduction/target or standard  at  this stage while  accurate data is  not available. However, 
such  an  instrument  could  be  considered  a  later  date,  when  the  receipt  of  more  detailed 
direct  source-level  methane  emissions  data  -  as  a  result  of  implementing  the  preferred 
option of policy area 1 into EU law - would allow it. The same considerations are valid 
also in relation to fossil energy consumed but not produced in the EU. In this case, the 
requirements  on  which  information  needs  to  be  included  in  the  transparency  list  could 
evolve over time based on additional data becoming available.  

Choice of instrument 

With respect to the choice of instrument, a Regulation appears the most appropriate legal 
instrument for this legislative proposal as it imposes clear and detailed rules that do not 
give room for divergent transposition by Member States. A Regulation ensures that legal 
requirements  are  applicable  at  the  same  time  throughout  the  Union,  therefore  avoiding 
any inefficiencies and regulatory costs/burdens related to an inconsistent implementation 
of methane emission reduction provisions across the EU.  

In  addition,  a  Regulation  is  the  adequate  instrument  to  impose  direct  obligations  on 
economic  operators  and  national  authorities.  This  would  be  required  in  order  to  have 
clear  obligations  to  quantify  report  and  verify  data,  as  well  as  to  employ  measures  to 
mitigate methane emissions, including the phasing out of harmful industry practices such 
as venting and flaring. 

In more detail, with respect to option 1.2 (compulsory MRV rules covering the oil, gas 
and coal  sectors), in  order to  have  consistent and comparable  data, it is  crucial to  have 
harmonised  measurement  and  reporting  requirements.  This  can  be  best  done  via  a 
Regulation, as shown by related EU legal acts179. On this subject, the level of discretion 
left to Member States in a Directive would risk discrepancies and lack of comparability 
of data180.  

to 

179  E.g.  Regulation  (EU)  2015/757  on  the  MRV  of  carbon  dioxide  emissions  from  maritime  transport; 
Regulation  (EC)  166/2006  on  the  European  Pollutant  Release  and  Transfer  Register;  Implementing 
Regulation  (EU)  2020/1208  of  7  August  2020  on  structure,  format,  submission  processes  and  review  of 
information  reported  by  Member  States  pursuant 
the  Governance  Regulation;  Commission 
Implementing  Regulation  (EU)  2018/2066  on  the  monitoring  and  reporting  of  greenhouse  gas  emissions 
pursuant to ETS Directive; Implementing Regulation (EU) 2018/2067 on the verification of data and on the 
accreditation of verifiers pursuant to the ETS Directive.   
180 See, for example, the justification in the Explanatory Memorandum of the European Pollutant Register 
Regulation:  ‘Another  policy  option  for  implementation  would  be  a  Directive.  The  major disadvantage  of 
this  option  is  its  incompatibility  with  the  need  for  comparable  and  therefore  harmonised  data  to  be 
delivered to the European PRTR central database.  Comparability of data is a priority because the UN-
ECE  PRTR  Protocol  sets  forth  a  number  of  technical  options  and  approaches,  which  could  –  if  not 
stringently  harmonised  –  lead  to  totally  different  national  systems  and  the  impossibility  to  collect  and 
disseminate meaningful data on European level. The level of discretion, left open for Member States in a 

86 / 148 

 
 
 
                                                           
 
Furthermore, with respect to option 2.3 (compulsory leak detection and repair and rules 
on venting and flaring covering the oil, gas and coal sectors), a Regulation would be the 
adequate  instrument  to  ensure  that  provisions  target  companies  directly  and  limit  their 
business practices in this respect. 

Moreover, in what concerns option 3.1 (diplomatic action) and option 3.3. (transparency 
list  and  a  super-emitter  monitoring  tool),  in  light  of  the  international  character  of  the 
measures and the need to set out Commission obligations to set up the transparency tools, 
a Regulation is the most suitable instrument.  

Finally,  a  Regulation  allows  to  address  in  a  more  direct  and  conducive  manner  the 
urgency of dealing with methane emissions, in the context of the climate emergency and 
the Union’s climate neutrality target. Most recently, the sixth IPCC Assessment Report181 
underlines the role of methane as one of the main gases responsible for climate change 
The report outlines that methane levels are at an all-time high and well above emission 
levels compatible with limiting warming to 1.5°C. There is thus a need for a sharp and 
rapid  reduction  in  methane  emissions  to  slow  down  global  warming  and  improve  air 
quality. It is important to note that the report concludes that the increase of methane in 
the  atmosphere  is  the  result  of  human  activity  and  that  fossil  fuels  have  been  a  large 
contributor to the growth in methane emissions at least since 2007, alongside agriculture 
(livestock) and wastewater. 

The  choice  of  a  Regulation  ensures  that  the  identified  problems  and  objectives  are 
addressed  in  the  most  effective,  efficient  and  proportionate  way.  It  ensures  a  careful 
balance  between,  on  the  one  hand,  the  regulatory  autonomy  Member  States  have  for 
national corrective actions, setting incentives for technological innovation, or deciding on 
the level of dedicated resources and, on the other hand, the need to address the problems 
concerning methane emissions that have to be tackled centrally. The preferred options do 
not extend beyond what is necessary to solve the identified problems and to achieve the 
objectives set.  

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

EU  climate  and  energy  legislation  provides  for  a  comprehensive  framework  to  track 
progress  towards  EU  targets,  to  which  this  proposal  will  contribute.  The  overarching 
framework  is  provided  by  the  Climate  Law  and  a  detailed  integrated  monitoring  and 
reporting  framework  is  provided  by  the  Regulation  on  the  Governance  of  the  Energy 
Union and Climate Action. Data collected in the context of the Governance Regulation is 

Directive would risk discrepancies and incomparability of data. Moreover, risk of  delays in transposition 
by the MS could frustrate the objective of a speedy conclusion and implementation of the PRTR Protocol.’ 
181  IPCC,  2021:  Summary  for  Policymakers.  In:  Climate  Change  2021:  The  Physical  Science  Basis. 
Contribution  of  Working  Group  I  to  the  Sixth  Assessment  Report  of  the  Intergovernmental  Panel  on 
Climate Change [MassonDelmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Péan, S. Berger, N. Caud, Y. 
Chen,  L.  Goldfarb,  M.I.  Gomis,  M.  Huang,  K.  Leitzell,  E.  Lonnoy,  J.B.R.  Matthews,  T.K.  Maycock,  T. 
Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press. In Press. 

87 / 148 

 
 
 
                                                                                                                                                                            
being  made  publicly  accessible  on  an  e-platform,  including  indicators  for  monitoring 
progress towards Energy Union objectives182. 

As regards monitoring and evaluation of the MRV parts of the legislative proposals, the 
Commission  annually  evaluates  Member  States’  progress  in  reducing  GHG  emissions, 
taking  into  account  progress  in  Union  policies  and  measures  and  information  from 
Member  States.  Member  States  report  their  GHG  emissions  every  year  in  form  of 
greenhouse gas emissions inventories for the previous year in accordance with the 2006 
IPCC guidelines for national GHG inventories. These submissions are subject to quality 
assurance  and  control  that  includes  checks  of  the  transparency,  accuracy,  consistency, 
comparability  and  completeness  of  the  submitted  inventories.  The  IPCC  guidelines 
require  the  inventory  compiler  to  attribute  one  of  the  three  tier  methods  of  UNFCCC 
reporting of emissions for each source category and greenhouse gas. This process enables 
verification of compliance with requirements for source-level reporting. 

Every two years, Member States are obliged to report on national policies and measures 
and  national  systems  of  policies  and  measures  implemented  in  order  to  achieve  their 
targets  under  the  Effort  Sharing  Regulation  and  on  their  emission  projections.  Under 
article 9 of the ESR, the control of Member States’ compliance with their annual targets 
is carried out every 5 years. To ensure that the five yearly compliance check foreseen by 
the Effort Sharing Regulation is based on accurate and verified data, the GHG emissions 
inventories  submitted  by  Member  States  for  the  relevant  years  are  subject  to  a 
comprehensive  Union  review  co-ordinated  by  the  European  Environment  Agency  on 
behalf of the Commission. The provisions contained in the proposal help to improve the 
accuracy  of  methane  emission  monitoring,  which  will  be  reflected  in  the  national 
submissions and the data basis available to assess the target achievement under the ESR. 
The established control mechanisms for the quality of national submissions also allow an 
evaluation  of  the  effectiveness  of  the  provisions  of  this  proposal  in  achieving 
improvements in data quality. 

As concerns monitoring and reporting of emissions by regulated entities, the Agency for 
the  Cooperation  of  Energy  Regulators  (ACER)  has  called  for  access  of  National 
Regulatory Authorities to at least all methane emissions data of entities operating in their 
legal domain of responsibility. Such access by national regulatory allows for scrutiny of 
the implementation of obligations locally.  

Finally, the International Methane Emission Observatory will provide additional scrutiny 
of  submitted  methane  emissions  data,  including  the  possibility  to  cross-reference  them 
with other sources such as satellite imaging. 

As regards monitoring and evaluation of the mitigation parts of the legislative proposals, 
the main responsibility in ensuring application of the provisions will lie with the national 
competent authorities. Additional monitoring mechanisms could be integrated as per the 
Industrial  emissions  Directive,  which  require  periodic  reports  from  Member  States 

182 https://ec.europa.eu/energy/data-analysis/energy-union-indicators/scoreboard_en?redir=1 

88 / 148 

 
 
 
                                                           
established on the basis of the findings of the implementation of Member State systems 
and plans of environmental inspections which requires national competent authorities to 
draw  up  programmes  for  routine  environmental  inspections,  including  the  frequency  of 
site visits for different types of installations. Such inspections should include site visits, 
monitoring  of  emissions  and  checks  of  internal  reports  and  follow-up  documents, 
verification  of  self-monitoring,  checking  of  the  techniques  used  and  adequacy  of  the 
environment management of the installation, undertaken by or on behalf of the competent 
authority to check and promote compliance of installations.  

Methane emissions are increasingly subject to public attention as demonstrated by their 
increased visibility in the 6th IPCC Assessment Report183 and scientific and stakeholder 
campaigns  to  detect  and  quantify  emissions184.  Supported  by  better  satellite  becoming 
available,  such  public  scrutiny  is  a  valuable  resource  in  monitoring  the  impact  of  the 
proposal and identifying shortcomings in implementation.  

In  addition,  annual  sector  fora  organised  by  the  Commission,  e.g.  the  European  Gas 
Regulatory Forum (‘Madrid Forum’) and the Energy Infrastructure Forum (‘Copenhagen 
Forum) provide opportunities for exchange and stocktaking with stakeholders including 
national authorities, energy regulators, industry, and civil society.  

The  Commission  will  monitor  the  implementation  of  the  regulation  by  checking  the 
correct application of the measures by the obligated parties. Furthermore, it is proposed 
that  the  Commission  will  regularly  evaluate  the  measures  included  in  the  regulation  in 
the  form  of  reports  to  be  submitted  to  the  European  Parliament  and  the  Council.  If 
necessary,  the  Commission  will  take  enforcement  action,  including  infringement 
procedures. 

183 IPCC (2021) Sixth Assessment Report - Climate Change 2021: The Physical Science Basis, p.21.  
https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_Full_Report.pdf 
184 See, e.g., recent observations made by the Clean Air Task Force using optical gas imaging cameras that 
identified a number of leaks at sites across multiple Member States, https://cutmethane.eu/, and research 
efforts by EDF on leakage, https://www.edf.org/climate/methane-studies 

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ANNEX 1: PROCEDURAL INFORMATION 

Lead DG, Decide Planning/CWP references 

DG  ENER,  PLAN/2020/7536,  2021  Commission  Work  programme  (under  the 
“European Green Deal” headline ambition and as part of the “Fit for 55” package).  

Organisation and timing 

Under  the  umbrella  of  the  European  Green  Deal  and  as  called  for  by  Regulation  (EU) 
2018/1999 on the Governance of the Energy Union and Climate Action , the Commission 
adopted  an  EU  strategy  to  reduce  methane  emissions    (‘the  Methane  Strategy’)  on  14 
October  20202,  announcing  that  the  Commission  will  propose  legislation  to  reduce 
methane emissions in the energy sector through provisions on measuring, reporting and 
verification (MRV) as well as  leakage detection and repair (LDAR), while considering 
legislation on venting and flaring. 

An  Inter  Service  Steering  Group  was  established  which  involved  the  following  DGs: 
AGRI,  CLIMA,  DEFIS,  DEVCO,  EEAS,  ENV,  GROW,  INTPA,  JRC,  LS,  MOVE, 
NEAR, REGIO, TRADE, SANTE, and the Secretariat General. A total of four meetings 
were held, on Monday 7 December 2020, Thursday 20 May 2021, Wednesday 16 June 
2021 and Friday 12 November 2021. 

Consultation of the Regulatory Scrutiny Board (RSB) 

An  “upstream”  meeting  with  the  RSB  in  advance  of  the  submission  of  the  Impact 
Assessment  took  place  on  26  April  2021, with  DG ENER,  the JRC and the Secretariat 
General represented. 

The Impact Assessment was submitted to the RSB on 23 June 2021. 

The meeting with the RSB to discuss the Impact Assessment took place on 22 July 2021. 

The RSB’s negative opinion was received on 26 July 2021. 

The revised impact assessment was submitted on 20 September 2021. 

The  RSB’s  positive  opinion  with  reservations  on  the  revised  impact  assessment  was 
received on 18 October 2021. 

Evidence, sources and quality 

Much  of  the  analysis  carried  out  in  this  impact  assessment  is  based  on  data  and 
projections from the GAINS model185 underpinning also the Climate Target Plan (CTP) 
Impact Assessment186, impact estimates by the United Nations Environment Program and 
the  Climate  and  Clean  Air  Coalition,  as  well  as  emissions  and  abatement  costs  data 
compiled by the International Energy Agency (IEA). 

In  addition,  the  following  material  from  Commission  Services  fed  into  this  impact 
assessment: 

185 Greenhouse gas and Air Pollution Information and Simulation Model, see Annex 3 
186 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020SC0176  

90 / 148 

 
 
 
                                                           
  Environmental  and  Sustainability  Assessment  of  Current  and  Prospective  Status 
of Coal Mine Methane Production and Use in the European Union (JRC, 2015)187 
  EU energy statistical pocketbook and country datasheets (European Commission, 

June 2021)188 

All sources are referenced in footnotes throughout the document.  

RSB first opinion of 26 July 2021 

RSB comments what to improve: 

How they were addressed 

(1) The narrative of the report needs to be 
improved starting with the problem 
definition.  

Even with the missing data, the report 
should be more explicit about the problem, 
its scale and what exactly would be 
addressed and could realistically be 
achieved by this specific initiative.  

The discussion should incorporate the 
specific economic and safety features of 
methane.  

The report should present more clearly, 
with figures and projections, where 
available, the relative importance of EU 
energy related methane emissions as 
compared to EU methane emissions from 
other sectors.  

The problem description should clarify 
what market failures the initiative would 
address and why and where there is a need 
for harmonisation of legislation.  

It should present more clearly how the 
situation differs across Member States and 
justify the need for EU action accordingly.  

In line with the opinion of the Board, the 
narrative has been reworked to become 
more explicit upfront about the problem 
and its context (Section 2.1). The problem 
description was also expanded and now 
includes the relevant market failures to be 
addressed (see particularly Sections 2.2.2 
and 2.2.3) and provides a clear and 
comprehensive overview of relevant 
legislation highlighting the scope for 
intervention and harmonisation (see Table 
2). 

The problem drivers have been restructured 
and clarified to enable the reader to more 
easily identify the possible contribution of 
this initiative in resolving them (Section 
2.2), along with a clarified baseline 
(Section 5.1).  

The specific economic and safety features 
of methane have been integrated into the 
discussion (in particular Section 2.2.2.). To 
address the important comment from the 
Board, a description of the relevance of 
energy related methane emissions has been 
added to Section 2.1 and more details 
provided on current relative emissions 
across sectors. The available information 
on differences across Member States was 
clarified (particularly in Sections 2.2.2.1 
and 2.2.2.2). Based on available examples 
of national legislation, the report highlights  

187 https://publications.jrc.ec.europa.eu/repository/handle/JRC100875  
188 https://ec.europa.eu/energy/data-analysis/energy-statistical-pocketbook_en  

91 / 148 

 
 
 
 
                                                           
divergences and inconsistencies with the 
risk of an uneven playing field within the 
internal market. It also highlights that 
existing national legislation will be 
insufficient to tackle the problem. Time 
constraints prevent the examination and 
elaboration of a comprehensive overview 
of each Member States’ national 
legislation. 

A new overview has been added in Section 
2.2.2 to address the identified need to 
provide a clear representation of 
interlinkages with EU acquis. Such an 
overview now situates the methane 
initiative within the broader context of 
other relevant EU instruments and 
identifying their shortcomings in 
addressing the identified problems 
adequately (either due to lack of scope, 
specific rules, or incentives). The same 
overview includes also international 
commitments and voluntary initiatives. The 
clarified partial overview of national 
legislation highlights already that national 
action is not sufficiently addressing the 
issue and differences across Member States 
risk creating regulatory uncertainty and 
barriers for companies. 

The baseline section was redrafted and 
cross-references to the problem definition 
were added in order to better explain the 
expected regulatory environment in the 
absence of this initiative, including the role 
of voluntary initiatives, and to avoid 
duplication of text. Further details on the 
anticipated development and effects of a 
fossil fuel phase-out and changes in 
imports are reflected in Section 2.3.   

Relevant data on expected future methane 
emissions and explanations about their 
origins in the energy sector were added in 
Section 2.3.1.  

Section 2.3.3 now provides projections for 

(2) The report should take full account of 
coherence with EU rules (in particular but 
not limited to the Effort Sharing 
Regulation and the Industrial Emissions 
Directive), national legislation, 
international commitments and voluntary 
industry initiatives that all affect the same 
emissions. The report should explain the 
scope of this initiative compared to those 
other initiatives and be clearer about the 
rationale for this proposal, how it fits with 
other initiatives, and exactly which gaps it 
fills. 

(3) The report should provide a more 
developed and better explained baseline. It 
needs to fully reflect the result of the phase 
out of fossil fuels and account for existing 
and upcoming EU legislation, voluntary 
industry initiatives and the initiatives at 
global level specific for methane 
monitoring and mitigation.  

The report should clarify why methane 
emissions remain high in 2050, even when 
the use of fossil fuels should be largely 
eliminated.  

It should assess the evolution of EU 
imports of fossil fuels and its effect on the 
EU’s influence on third countries. 

92 / 148 

 
 
 
(4) The description of options should 
become more complete.  

The structure of the options should reflect 
the policy choices to be made.  

It should allow to distinguish the effects of 
key measures, such as venting and flaring, 
and leak detection and repair. 

(5) The report should present a consistent 
narrative as regards imports from third 
countries and the options considered to 
mitigate methane emissions outside the 
EU.  

It should be clearer about the incentives or 
lack thereof for third countries and 
economic actors to reduce methane 
emissions.  

The report should better explain why it 
considers that the environmental and social 
impacts of all options considered for the 
international dimension of the initiative 
would be the same. It should justify better 
the impacts expected from the label for 
fossil energy imports. 

the evolution of EU fossil fuel imports and 
discusses the relevance of EU measures in 
the upcoming decades and beyond.  

The description of options has been revised 
throughout Section 6. Further details have 
been added to provide a better overview.  

The assessment of impacts has been 
expanded and restructured to better reflect 
the environmental, social, and economic 
effects of options as well as the 
administrative burden they may imply.  
Specific considerations for the policy 
proposal on leak detection and repair as 
well as for venting and flaring have been 
integrated in Section 6.2.4. 

The report was revised throughout to 
address the relevant comment from the 
Board and clarify the importance and 
future role of imports from third countries 
(see Section 2.3.3), as well as the relevance 
of emissions specifically linked to EU 
consumption of fossil fuels but occurring 
outside of EU borders and the options to 
address them. The market failure 
surrounding those emissions, incentives for 
economic operators, and options to address 
them have been clarified (see Section 2.2.3 
and Section 6.3). The underlying problems 
and related lack of incentives are the same 
for actors within and outside the EU (now 
clarified in the problem definition in 
Section 2.1). However, the EU’s options to 
act (to regulate, enforce and verify) are 
different and this was reflected in the 
options. 

The discussion on the environmental and 
social impacts of the policy options in the 
international dimension (Section 6.3.1) was 
expanded. It now better reflects that all 
options seek to achieve the same goal in 
terms of scope and methane emission 
mitigation by external partners through 
different means. Hence, the estimates of 

93 / 148 

 
 
 
economic and social impacts are equally 
valid across them as they are based on 
assumed identical outcomes. The choice of 
a preferred option is thus dependent on 
considerations of likely success in 
implementation, verification, and 
enforceability.  

Annex 4 was expanded to include 
comprehensive information on the 
methodologies, assumptions, and, where 
relevant, limitations and uncertainties 
about the different modelling results that 
have been used in the impact assessment. 

How they are addressed in the IA  

Additional clarifications and evidence were 
added  in  section  2.2.2,  explaining  that 
operators  have  different  approaches  to 
assessing safety risk, especially in the case 
of  inexistent  or  non-prescriptive  national 
regulations, and that safety risk needs to be 
properly  considered in  any measures to  be 
adopted  with  the  aim  to  further  reduce 
methane emissions in the energy sector, not 
only  to  ensure  a  homogenous  approach 
among  operators  but  also  to  ensure  that 
such  measures  do  not  lead  to  unintended 
to  safety. 
consequences  with 
Additional text was also inserted in section 
5.2, making it clear that exceptions such as 
safety  reasons  are  included  in  the  options 
being assessed.  

regards 

in 

added 

text  was 

Additional 
the 
introduction making it clear that the current 
context as regards information on methane 
emissions  in  the  energy  sector  globally  is 
one  of  insufficiently  precise  data  in  terms 
of  the  origin  as  well  as  magnitude  and 

(6) The report needs to provide information 
on the methodologies used or referred to. It 
should clearly set out the modelling 
assumptions, limitations and uncertainties.  

It should also provide an indication of the 
robustness and credibility of the underlying 
methodologies. 

RSB second opinion of 18 october 2021 

RSB 2nd opinion comments on what to 
improve: 

(1) The report should describe in detail the 
intentional  and 
origin  and  causes  of 
unintentional releases of methane and how 
these  can  be  avoided  without  jeopardising 
efficient industrial processes and safety.  

It  should  clearly  identify  the  scale  of  the 
problem originating from the EU compared 
to  the  global  total  and  break  this  down  by 
sector to give an accurate and unambiguous 
overview  which  can 
the 
options and their selection.  

inform 

then 

It  should  discuss,  with  concrete  evidence 
than  assertion,  what  prevents 
rather 
third 
companies,  Member  States  and 
countries 
from  mitigating  methane 
emissions. The suggested problem driver of 
‘lack  of  awareness  and  information’  needs 
to  be  backed  up  by  solid  evidence,  given 
that much of the emissions can be avoided 
at relatively low cost. 

94 / 148 

 
 
 
 
nature of these emissions, and as a result, a 
key  objective  of  any  targeted  action  to 
further  reduce  methane  emissions  and  to 
assess  the  effectiveness  of  such  actions  is  
to  start  by  improving  the  quality  of  data 
and information on the sources of methane 
emissions 

Additional  text  was  included  in  section 
2.2.2  explaining  why,  even  if  economic 
considerations  are  a  key  factor  in  the 
decisions  taken  by  operators  to  abate  their 
methane  emissions,  there  may  be  reasons 
why 
the 
they  do  not  undertake  all 
abatement  that  is  cost  effective  from  their 
perspective,  even 
that 
if 
information.    Additional  text  was  also 
added  in  that  section  highlighting  the 
results  from  section  6,  which  demonstrate 
that  large  amounts  of  additional  methane 
emission abatement (on top of the baseline) 
are  possible  in  the  sectors  included  in  the 
scope  of  this  report,  a  significant  share  of 
which  can  be  achieved  at  negative  to  zero 
net costs. 

they  have 

(2)  The  report  should  justify  the  need  for 
additional  EU  action  taking  into  account 
the  existing  requirements  stemming  from 
EU  legislation,  international  agreements 
binding  Member  States  and 
industry 
voluntary commitments.  

It  should  identify  which  gap  the  proposal 
will  fill  and  where  precisely  it  will  act, 
being  explicit  on  which  emissions  and 
reporting  obligations  are  already  covered 
by other measures.  

It  should  be  fully  coherent  with  other 
legislation  which  covers  these  emissions 
such  as,  but  not  limited  to,  the  Effort 
Industrial 
Sharing  Regulation, 
Emissions Directive and national measures.  

the 

framework 

the  binding  national 

Additional  text  was  included  in  section 
that  while  methane 
2.2.2  explaining 
emissions  are  included  in  the  scope  of  the 
union  greenhouse  gas reduction targets  for 
2030 set out in the European Climate Law  
emission 
and 
reduction  targets  under  Regulation  (EU) 
2018/842, there is currently no Union level 
legal 
specific 
measures  for  the  reduction  of  methane 
emissions  occurring  at 
level  of 
upstream oil and fossil gas exploration and 
fossil  gas  gathering  and 
production, 
processing, 
distribution, 
transmission, 
underground  storage  and  liquid  fossil  gas 
(LNG)  terminals,  operating  underground 
and 
closed 
coalmines, 
and 
abandoned underground coal mines.  

setting  out 

surface 

the 

In the case of the Effort Sharing Regulation 

As regards existing legislation, in particular 

95 / 148 

 
 
 
  
 
it  should  assess  how  setting  binding 
requirements  on  methane  reduction  would 
limit  the  freedom  of  choice  given  to 
Member  States  to  decide  on  the  areas  in 
which  to  deliver  their  GHG  emissions 
linked to their national energy mixes. 

to 

the  Effort  Sharing  Regulation,  additional 
text  was  also  included  in  section  2.2.2 
that  further  action  will  be 
explaining 
complementary 
the  ESR  and  will 
facilitate achieving the targets set out under 
the  ESR,  and  listing  how  that  will  be  the 
case. Further clarifications were also added 
to make it clear that the scope of emissions 
assessed in the report are outside the scope 
of  the  current  IED  and  that  the  review  of 
the IED will take into account the scope of 
emissions covered in this proposal. 

(3) The report should analyse how methane 
emissions would evolve without additional 
intervention.  It  should 
the 
planned phasing out of fossil fuels and the 
existing 
level, 
internationally  and  on  a  voluntary  basis. 
This  should  be  reflected  in  a  quantified 
baseline. 

incorporate 

initiatives 

EU 

at 

clarifications  were 

added 
Additional 
throughout section 6 clarifying the amount 
of  methane  emissions  that  are  possible  to 
abate in the sectors included in the scope of 
this  report  over  and  above  the  baseline 
scenario.  Furthermore, 
2.3.2 
explaining  why  methane  emissions  will 
still  be  relevant  in  a  decarbonised  future 
was 
with 
information  from  the  projections  from  the 
impact  assessment  of  the  2030  Climate 
Target Plan. 

significantly 

expanded 

section 

Additional details on the policy options and 
the specific measures which they contain as 
well  as  justifications  for  those  policy 
options, were added to section 5.2. 

Section  6  was  also  revised,  including 
clearer  and  more  detailed  explanations  as 
well  as  more  in-depth  analysis  of  the 
specific  abatement  measures  available  in 
the  various  sub-sectors  included  in  the 
scope  of 
the 
associated  costs  and  benefits  of  those 
measures. 

this  report  as  well  as 

in 
(4)  The  report  should  be  precise 
presenting  options  instead  of  addressing 
full  sectors  at  once.  The  options  should 
reflect  the  main  sources  of  EU  energy 
sector methane emissions starting from the 
largest (coal) to the smallest (oil).  

The  options  should  contain  measures  that 
are  specific,  targeted  and  proportionate.  It 
should provide in-depth analysis of specific 
measures  to  avoid  methane  emissions, 
their  feasibility  and  possible 
describe 
uptake and assess their costs and benefits.  

It  should  describe  which  part  of  the  full 
abatement  potential  will  be  tackled  by  the 
measures proposed. It should justify why in 
some  options  the  coal  sector  is  left  out 
while it accounts for the largest part of the 

96 / 148 

 
 
 
 
 
emissions. 

(5) The report should assess the feasibility 
of  options  to  avoid  methane  emissions  in 
third countries together with the impact on 
security  of  supply  and  possible  price 
increases for EU consumers.  

It  should  further  explain  why  it  considers 
that  the  environmental  and  social  impacts 
of  all  (voluntary  and  mandatory)  options 
considered  for  the  international  dimension 
of the initiative would be the same, even if 
their  likely  success  in  implementation, 
verification,  and  enforceability  would  be 
different. 

Additional  text  was  provided  in  sections 
6.2  and  6.3  on  the  likely  impacts  of  the 
measures  assessed  in  the  report  on  energy 
prices. Additional text was also included in 
section 6.3, principally under option 3.2, on 
the  feasibility  of  such  an  option, 
in 
particular  in  terms  of  the  difficulties  of 
verifying compliance with the requirements 
on  the  measures  included  in  this  report  in 
third countries. 

in 

clarifications  were 

also 
Additional 
provided in section 6.3.1 on the usefulness 
of  IEA  estimations  used  in  policy  area  3 
(assessing  options  on  measuring,  reporting 
and mitigating methane emissions linked to 
EU  fossil  fuel  consumption  but  occurring 
outside  the  EU)  which  are  not  specifically 
linked  to  EU  consumption,  as  they  cover 
all  oil  and  fossil  gas  related  methane 
emissions  occurring 
the  sample  of 
countries  included  in  the  analysis.  This 
included  explaining  that  they  cannot  be 
used 
to  make  quantitative  distinctions 
between  one  proposed  option  or  the  other, 
and  that  they  therefore  primarily  serve  to 
highlight  the  magnitude  of  the  methane 
emissions  estimated  to  originate  from  key 
exporters  of  fossil  energy  to  the  EU  in 
emissions 
to  methane 
comparison 
occurring in  these same  sectors in  the EU, 
as well as to highlight – in the same way as 
was  done  using  GAINS  projections  in 
policy area 2 – the share of those methane 
emissions  that  can  be  abated  at  different 
levels of abatement costs.  

Thus,  rather  than  distinguish  the  different 
policy  options  assessed  under  this  policy 
area by attempting to estimate and attribute 
reduction 
level  of  emission 
different 
abatement 
the  assessment  of 
to  each, 
impacts  of  options  under  this  policy  area 
focuses  instead  on  qualitatively  evaluating 

97 / 148 

 
 
 
in  methane  emissions 

whether  the  options  could  realistically  be 
implemented  in  order  to  incentivise  such 
reductions 
in 
exporting countries in the EU via the use of 
cost-effective  measures  as  highlighted  by 
the  associated 
the 
benefits,  and 
fulfil  specific 
objective 3. 

IEA,  and  achieve 
therefore 

(6)  The  report  should  include  the  required 
standard  annex  on  the  estimated  costs  and 
benefits of the preferred option. 

This annex was included in annex 5. 

98 / 148 

 
 
 
 
 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION  

Stakeholder events for the EU methane strategy 

As  part  of  the  development  of  the  EU  strategy  to  reduce  methane  emissions,  the 
Commission held three stakeholder meetings, the results of which also further informed 
this impact assessment: 

  A  stakeholder  meeting  on  a  strategic  plan  to  reduce  methane  emissions  in  the 

energy sector, on Friday 20 March 2020. 

  A  stakeholder  meeting  on  integrating  methane  measurement,  reporting  and 
verification and abatement into EU policies: Case studies and best practices in the 
agriculture, energy, and waste sectors, on 9 June 2020.  

  A stakeholder meeting on reducing methane emissions: opportunities and barriers 

in waste and agriculture through biogas production, on 17 July 2020.  

In addition, the Representation of the European Commission in Berlin held a workshop 
dedicated  to  “stocktaking  methane  emissions  as  a  requirement  for  a  sustainable  and 
successful energy transition” on 10 January 2020.   

Stakeholder workshops 

From  15  to  17  March  2021,  DG  ENER  held  three  online  workshops  on  a  proposal  on 
reducing  methane  emissions  in  the  energy  sector.  Each  workshop  was  dedicated  to  a 
specific theme. In total 760 registrations for the three workshops were received, of which 
111 for the workshop on measurement and mitigation of methane emissions in the coal 
sector, 284 for the workshop on venting and flaring of methane in the oil and gas sectors, 
and 356 for the workshop on leak detection and repair189.  

The three workshops hosted 17 external speakers from academia/research organisations, 
companies/business  organisations,  business  associations,  NGOs,  and  public  authorities. 
Each workshop was coordinated by an official from DG ENER, introducing the topic and 
moderating the open discussions following the speakers’ presentations.  

Open Public Consultation 

The open public consultation on legislation to measure and mitigate methane emissions 
in the energy sector took place between 05 February and 01 May 2020. The questionnaire 
contained multiple-choice and open questions to  collect  detailed views  and suggestions 
from  stakeholders  and  citizens  on  the  full  range  of  issues  covered  by  the  initiative. 
Stakeholders were also invited to submit (additional) comments via email. 

Participants 

The open public consultation received 131 responses, of those 126 were submitted by at 
least partial completion of the online questionnaire and five additional contributions were 

189  Note  that  actual  participation  numbers  could  not  be  ascertained  with  the  online  tool  used  for  the 
workshops due to fluctuations in attendance during the event. 

99 / 148 

 
 
 
                                                           
received in form of email submissions. Figure A.2.1 shows the distribution of responses 
by category of participant.  

3% 3% 1%

5%

8%

17%

21%

42%

Companies/business organsiations

Business associations

EU citizens

NGOs

Public authorities

Academic/reseach institutions

Others

Non-EU citizen

Figure A.2.1 Distribution of responses by category of participant 

In terms of geographical coverage, 27 submissions were received from France, of which 
18 identical or very similar from citizens, followed by Belgium (21), Germany (13), Italy 
(9), and Austria (8). Seven answers were received each from the Netherlands, Poland and 
Spain,  four  from  Czechia,  three  from  Denmark,  two  each  from  Slovakia  and  Slovenia, 
and  one  from  Hungary,  Ireland  and  Latvia,  respectively.  A  significant  number  of 
responses  also  came  from  outside  the  EU,  with  the  United  States  leading  with  seven, 
followed  by  the  United  Kingdom  and  Norway  with  three  responses,  respectively,  and 
Japan and Switzerland with one response each. 

The 18 identical or very similar responses (14% of the total respondents) received from 
citizens in France are identified separately in the analysis. 

Note that many participants did not answer all questions contained in the questionnaire. 
To  allow  meaningful  interpretation,  the  analysis  is  based  on  the  responses  received  to 
each  question  and  not  the  total  number  of  respondents.  In  the  following  analysis,  a 
response is  considered the  majority view if it represents  more than 50% of participants 
who provided an answer to the relevant question. Where an option did not receive more 
than 50% but has the highest percentage of responses, it is referred to as the most popular 
or  most  selected/chosen  answer.  Similarly,  if  a  response  receives  the  least  amount  of 
support, it is considered the least popular or least selected/chosen. 

Key outcomes of the open public consultation 

As concerns the types of instruments to address methane emissions in the energy sector, 
there is strong support by stakeholders for prescriptive  requirements to establish a robust 

100 / 148 

 
 
 
 
 
measurement  and  reporting  scheme.  Specifically  for  measurement,  reporting  and 
verification  (MRV)  of  emissions,  a  majority  of  responses  support  basing  relevant 
proposals for the oil and gas sectors on the methodology of the OGMP. 

In terms of sectoral, emissions, and supply chain coverage, the majority of responses:  

  support the inclusion of coal in MRV and mitigation measures. Some respondents 
also indicated a preference for extending the scope of the proposals to end-users.  

  support legislation covering all oil and gas entering the EU market.  

However,  less  than  half  of  responses  were  in  support  of  including  indirect  emissions 
from a select list of sectors, namely industry, power generation, transport, residential or 
others, respectively. 

As  concerns  legislating  on  leakage  detection  and  repair,  the  majority  view  prefers 
flexibility  for  the  choice  of  device  used  for  detecting  leaks  and  the  methods  used  to 
quantify emissions, whereas it supports the inclusion of survey frequency.  

The  majority  of  responses  thinks  it  is  feasible  to  eliminate  routine  venting  and  flaring 
associated with energy produced and consumed in the EU, with views about the possible 
time-frame  ranging  from  immediate  (9%)  to  five  years  or  more  (71%).  The  majority 
agreed  that  a  common  set  of  definitions  and  parameters  for  venting  and  flaring  are 
necessary.  A majority of stakeholders defined the production part of the value chain  as 
the most relevant for venting and flaring in the oil, gas and coal (only for venting) sector. 

A  majority  of  respondents  considered  that  the  overall  benefits  of  putting  in  place 
legislative  measures  to  ensure  robust  and  effective  MRV  and  mitigation  of  methane 
emissions outweigh the costs to the industry. 

In terms of legislating mitigation of emissions from the coal sector, coverage of coalmine 
methane by EU regulation is supported by the majority view, as is addressing abandoned 
mine methane ownership rights. 

Detailed responses to the questions 

Section I: Types of instruments 

Most  jurisdictions  with  methane-specific  oil  and  natural  gas  regulations  have  relied 
heavily on prescriptive requirements (such as MRV, LDAR or restrictions on flaring or 
venting) to achieve emissions reductions. An alternative approach to regulating methane 
emissions in the energy sector is via performance-based requirements, which establish a 
mandatory performance standard on regulated entities (such as targets set at the level of 
individual companies for a specific piece of equipment or facility, or a flaring efficiency 
standard) but do not dictate how the target must be achieved.  

A majority of responses (65%) expressed support for prescriptive measures on measuring 
and  mitigation  requirements  to  establish  a  robust  data  foundation  before  considering 
performance-based requirements in a second step. The vast majority of responses (94%) 
considered that company or facility-wide performance-based requirements need a robust 

101 / 148 

 
 
 
 
 
 
measurement and reporting regime and an accurate baseline understanding of the level of 
emissions to avoid underreporting and valid assessment of company performance. Many 
companies,  business  organisations  and  business  associations  raised  the  point  that  the 
development  of  an  effective  measurement  and  reporting  scheme  is  a  necessary 
precondition;  however,  some  companies  stressed  the  importance  of  flexibility  in  the 
implementation  of  requirements.  Respondents  also  expressed  preferences  for  a 
technology-neutral  approach,  sufficient 
time,  and  differentiation 
according to the characteristics of the individual segments of the value chain. A majority 
of  responding  NGOs  highlighted  that  prescriptive,  ambitious  and  performance-based 
approaches  are  needed  to  achieve  meaningful  methane  emissions  reductions,  and  that 
MRV  requirements  should  not  lead  to  or  justify  a  further  postponement  of  mitigation 
measures. 

implementation 

The  citizen  responses  expressed  a  preference  for  a  price  on  methane  emissions  as  the 
most effective  and efficient  measure to  regulate  methane emissions. Responding public 
administrations  were  either  in  favour  of  performance-based  requirements  or  sector-
specific approaches.  

In  conclusion,  a  vast  majority  of  stakeholders’  responses  support  strong  prescriptive 
requirements to establish a robust measurement and reporting scheme. 

Section II: Identifying models for an EU regulation on methane emissions in the 
energy sector 

A majority of responses (78%) are supportive of basing a legislative proposal on MRV 
for  oil  and/or  gas  on  the  methodology  of  the  OGMP.  The  majority  of  companies  or 
business organisations indicated the OGMP 2.0 to be a good starting point. In contrast, a 
minority  of  companies/business  organisation  and  a  majority  of  business  associations 
identified  the  OGMP  2.0  methodology  as  inappropriate  by  focusing  on  upstream 
emissions, failing to address  super emitters and  being  inappropriate for the coal  sector. 
Some respondents also do not consider the OGMP 2.0 initiative fit-for-purpose at certain 
levels of the value chain such as at the DSO level and for the coal sector. The Margogaz 
methodology,  national  MRV  frameworks  (Norway,  Germany)  and  the  EN  15446 
standard for fugitive emissions were indicated as good examples to consider. A number 
of respondents, including the responses from academia, argued that the regulation should 
be flexible and adaptive. Among citizen responses, there is a preference for excluding the 
biogas  sector  from  such  a  methodology.  Some  public  authorities  underlined  that  the 
definitions in the OGMP 2.0 are not clear and that the OGMP 2.0 framework should be 
fully consistent and compatible with current methodologies agreed internationally under 
the umbrella of UN greenhouse inventories. A majority of NGOs expressed reservations 
against  the  OGMP  2.0  framework,  but  stated  that  if  it  were  to  be  used  as  basis  an 
extension  of  its  scope  would  be  necessary  to  drive  a  scalable  action.  The  majority  of 
NGOs  also  expressed  the  view  that  the  Commission  should  focus  on  mandatory 
frameworks rather than voluntary programs.  

To conclude, a majority of responses support MRV proposals for oil and gas to be based 
on the methodology of the OGMP. 

102 / 148 

 
 
 
 
Section III: Sectoral, emissions and supply chain coverage and/or scope 

The  majority  of  responses  are  supportive  of  the  inclusion  of  coal  in  the  Commission’s 
policy proposals on MRV (96%) and mitigation (95%). Respondents are split within all 
categories of stakeholders between setting specific MRV requirements for the coal sector 
and  maintaining  a  level  playing  field  among  all  energy  carriers  to  avoid  unintended 
incentives. However, they all agreed that methane emissions from coal mining operations 
are significant and justify mitigation.  

Most  stakeholders’  responses  (56%)  are  supportive  of  extending  the  coverage  of  the 
scope  of  the  policy  proposals  on  methane  to  end-users.  For  companies/business 
organisations,  methane  leaks  should  be  accounted  for  the  entire  value-chain  but  can  be 
considered  in  future  implementations  and  not  immediately.  The  majority  of  business 
associations  argued  that  the  administrative  burdens  for  individual  customers  would 
outweigh the benefits from covering end-use. NGOs predominantly consider that the full 
supply chain needs to be documented to get the full picture of methane emissions. Public 
authorities also expressed concern about the inclusion of the end-use sector, arguing that 
this will most likely lead to duplicating emissions in different measurement systems. 

A majority of stakeholders’ responses (92%) are supportive of EU legislation on methane 
emissions  in  the  energy  sector  covering  all  oil  and  gas  entering  the  EU  market. 
Companies/business  organisations  and  business  associations  raised  the  point  that 
companies  that  have  immediate  business  relations  with  the  EU  should  be  part  of  the 
obligations because most emissions happen outside the EU. However, some respondents 
from this category criticised the feasibility of such measures. All NGOs agreed to such 
measures arguing that the largest share of methane emissions is occurring in the upstream 
segment.  Public  authorities,  academia/research  institutions  and  citizens  argued  such 
measures would benefit the level playing field for European fossil energy producers. Less 
than half of responses to the OPC were in support to include indirect emissions from any 
one  of  a  list  of  categories  provided  in  the  OPC  (industry,  power  generation,  transport, 
residential or other). 

Different  conclusions  can  be  drawn  on  sectoral,  emissions  and  supply  chain  coverage 
and/or scope, starting with the support for the inclusion of coal in MRV and mitigation. 
In addition, a majority of respondents called the Commission to extend the coverage of 
the scope of the proposals to end-users. Finally, a majority of respondents consider that 
the legislation should cover all oil and gas entering the EU market. 

Section IV: Legislating on leakage detection and repair 

Fugitive  (unintentional)  leaks  represent  one  of  the  main  sources  of  methane  emissions 
from the gas and oil sectors. It is widely considered that the main mitigation strategy for 
reducing emissions from fugitive methane leaks from pressurized equipment used in the 
oil and gas industry is a leakage detection and repair (LDAR) program.  

Regarding the instruments for leak detection, most responses (58%) think EU regulation 
should  not  prescribe  the  type  of  device  used.  Companies/business  organisations  favour 

103 / 148 

 
 
 
 
 
outcome-based strategies, with legislation allowing flexibility for operators to choose the 
most effective and most efficient solutions to perform LDAR, based on the context, type 
of facilities and local constraints. Business associations argued that a limitation to certain 
devices  might  hamper  quickly  evolving  and  new  innovative  methods  and  thus  inhibit 
competition.  Technical  suggestions  from  amongst  others  academia/research  institutions 
included  the  stipulation  of  minimum  sensitivity  thresholds  for  the  devices  used.  The 
group of French citizens indicated that norm EN15446 already lists the kind of methods 
that  may  be  used  for  LDAR.  NGOs  were  in  favour  of  requiring  instrument-based 
inspections at defined frequencies. For public authorities, the legislation should mention 
minimum device requirements to ensure a level playing field.  

Most  responses  considered  that  the  frequency  of  LDAR  campaigns  should  be  fixed 
(64%).  Furthermore,  they  indicated  that  the  leak  detection  device/approach  used, 
environmental concerns, the leak size, the results of previous LDAR campaigns, safety, 
and  the  environmental  risk  evaluation  are  highly  important  parameters  to  take  into 
account  and  set  into  legislation.  The  accessibility/ease  of  repair  as  well  as  the  cost-
effectiveness  of  the  campaign  were  perceived  as  less  important  by  the  majority  of 
respondents.  

On  the  quantification  of  fugitive  leaks,  most  responses  (55%)  are  supportive  of  not 
determining  the  methods  to  be  used.  Companies  are  in  favour  of  the  EU  setting  the 
standard for detection and measurement as long as it remains flexible with regard to the 
exact methods used and open to new technological developments. Business associations 
expressed  the  view  that  methods  to  quantify  fugitive  emissions  from  leaks  should  be 
defined  by  industry  standards  and  that  legislation  could  recommend  but  not  determine 
them. The French citizens again stressed the relevance of norm EN15446. Some NGOs 
pointed  out  that  quantification  should  not  be  the  main  component  of  LDAR  surveys, 
while  others  stated  that  models  are  a  good  baseline  if  supplemented  by  measurements. 
Public authorities consider the quantification of leaks as challenging and not necessarily 
giving an accurate picture of emissions on site.  

On  repairs,  a  majority  of  stakeholders’  responses  (76%)  considered  that  EU  legislation 
should  determine  the  time  taken  for  leaks  to  be  fixed  after  detection  according  to  a 
classification  of  the  severity  of  the  leaks.  Company  respondents  mentioned  that  it  is 
important that EU legislation takes into account existing contributions, and determines a 
set  of  criteria  for  prioritizing  leaks  for  the  repair  together  with  the  industry.  Business 
associations specified that this point should be covered by national legislations, however, 
a maximum time by which each type of leak should be repaired could be implemented as 
well as guidelines/thresholds. The French citizen respondents stressed the need to focus 
first on the biggest leaks. All NGOs agreed that leaks should be required to be repaired 
immediately,  with  clear  prioritisation  of  larger  leaks.  All  public  authorities  agreed  that 
repairs of leaks should not be postponed but undertaken immediately.  

The main conclusion that can be drawn on the instruments used for leak detection is that 
a majority of respondents did  not want  to  include the type of device used for detecting 
leaks  and  the  methods  used  to  quantify  fugitive  leaks  but  supported  inclusion  of  the 
frequency in legislation as well as strict repair requirements. 

104 / 148 

 
 
 
 
 
 Section V: Legislating on venting and flaring 

(61%),  while  a  minority  considered 

When  it  comes  to  the  feasibility  of  eliminating  routine  venting  and  flaring  associated 
with  energy  produced  and  consumed  in  the  EU,  most  respondents  considered  that  it  is 
feasible 
(29%). 
Companies/business organisations are of the view that routine flaring and venting can be 
reduced significantly but cannot be eliminated completely in the midstream sector due to 
safety reasons. Most business associations argued that elimination of venting and flaring 
may be feasible in the gas sector, but not in the oil sector where it may be reduced but is 
unlikely  to  be  eliminated  entirely.  NGOs  and  public  authorities  asked  for  a  specific 
definition of ‘routine’.  

feasible 

it  not 

to  be 

Most  responses  (41%)  considered  that  it  would  take  more  than  5  years  to  phase  out 
routine venting and flaring. The main reasons for extended phase-out periods respondents 
named are the completion of extensive reduction programs, additional investment needs, 
technical and logistic reasons, and safety.  Some respondents also argued for alignment 
with the World Bank Zero Routine Flaring by 2030 initiative. 

On  definitions,  the  majority  of  responses  (98%)  are  supportive  of  a  common  set  of 
definitions  and  parameters  for  venting  and  flaring.  Companies/business  organisations 
were  in  favour  of  adopting  definitions  of  “routine”,  “non-routine”,  and  “emergency 
circumstances”  to  provide  a  level  playing  field  and  avoid  misunderstandings.  Business 
associations argued that some countries are already regulating those practices. These two 
stakeholder  categories  insisted  on  the  necessity  to  consider  MARCOGAZ  technical 
recommendations  when  elaborating  the  definitions.  Academia/research  institutions 
mentioned  that  this  would  decrease  uncertainty  and  help  to  compare  countries  between 
each other. NGOs raised the point that these terms are not necessarily applicable to the 
coal  sector.  They  also  argued  that  only  acceptable  instances  for  venting  and  flaring 
should occur, such as for safety, testing or the safe disposal of harmful gases, for which 
evidence would need to be provided. 

A  majority  of  stakeholders’  responses  considered  that  the  production  part  of  the  value 
chain  as  the  most  relevant  for  venting  in  the  oil  (80%)  and  gas  (84%)  sectors. 
Companies/business organisations and business  associations agreed that  routine venting 
would be the type of activity that results in the greatest level of emissions, but called for 
cost-benefit analyses and sector specific consideration of the potential cost effectiveness 
of  emission  reductions  by  type  of  emitter.  For  the  coal  sector,  the  relevance  of  safety 
reasons for venting was  highlighted. Academia/research institutions specified that some 
of the reasons for venting are not well known, especially for LNG and at the distribution 
level. NGOs mentioned that primary causes of venting include the deliberate release of 
gas for disposal, the release of gas by design through pneumatic devices and equipment, 
and emergency releases. 

A majority of respondents considered that the production part of the value chain as the 
most relevant for flaring in the oil (85%) and gas (98%) sector.  

To conclude on venting and flaring, a majority of stakeholders’ responses estimated that 
it is feasible to eliminate routine venting and flaring associated with energy produced and 

105 / 148 

 
 
 
consumed in the EU, but with diverging views on possible time frames. A common set of 
definitions and parameters for venting and flaring are considered necessary. 

Section VI: Mitigation costs and benefits 

A  majority  of  the  respondents  (84%)  views  the  overall  benefits  –  including  economic, 
social,  environmental  and  other  relevant  benefits  –  of  putting  in  place  legislative 
measures  to  ensure  robust  and  effective  measurement,  reporting  and  mitigation  of 
methane  emissions  in  the  energy  sector  to  generally  outweigh  the  cost  to  industry. 
Companies/business organisations highlighted the importance of legislative measures to 
mitigate emissions in the value chain; however, incentives should be aligned with global 
objectives. For business associations, a coordinated approach is important, as there may 
be additional costs in some areas that are not in relation to the cost savings, especially for 
DSOs/TSOs.  Academic/research  institutions  pointed  out  that  additional  environmental 
benefits could be achieved by putting in place legislative measures that cover all oil and 
gas entering the EU market. Citizens raised the fact that careful considerations should be 
given  to  the  impacts  of  such  legislative  measures  on  LNG  market  development  in 
emerging economies. NGOs indicated that the reduction of methane emissions is one of 
the  most  cost-effective  strategies  to  rapidly  reduce  the  rate  of  global  warming  and  that 
owners  of  the  methane  emitted  may  save  money  by  mitigating  their  emissions.  Public 
authorities  mentioned  that  proportionality  and  cost-effectiveness  should  be  taken  into 
account.  

In  conclusion,  a  majority  of  respondents  acknowledged  that  the  overall  benefits  of 
putting  in  place  legislative  measures  to  ensure  robust  and  effective  MRV  of  methane 
emissions outweigh the costs to industry. 

Section VII: Legislating mitigation of emissions from biogas/biomethane 

Most  stakeholders’  responses  (67%)  are  supportive  of  EU  regulation  obliging 
biogas/biomethane producers to reduce their fugitive methane emissions and the majority 
(64%)  also  agreed  that  separate  mitigation  measures  should  be  developed  in  the 
upcoming  regulation  on  methane  in  the  energy  sector  complementing  the  Renewable 
Energy Directive II. Some companies/business associations raised the point that to allow 
biomethane  to  fulfil  its  potential  as  a  decarbonized  energy  source,  it  will  be  important 
that  methane  emissions  from  its  value  chain  are  measured,  reported  and  verified  to  the 
same standard as for the oil and gas sector. Other respondents  from  this same category 
are  of  the  view  that  emissions  from  biogas/biomethane  plants  are  negligible  when 
compared  to  the  entire  gas  value  chain,  and  should  not  be  penalised  as  it  has  a  role  to 
play  as  renewable  energy.  Business  associations  stressed  a  necessity  to  avoid  the 
penalisation  of  the  biofuel  sector  with  added  regulation  to  fasten  its  uptake,  and  also 
claim that it emits less methane than other conventional activities. For academia/research 
institutions,  only  big  bioenergy  plants  should  be  subject  to  such  obligations.  Citizens 
argued  that  all  methane  emissions  should  be  treated  equally,  and  the  French  citizens 
highlighted  that  voluntary  initiatives  from  this  sector  can  help  to  limit  methane 
emissions.  For  NGOs,  this  obligation  should  take  into  account  the  full  supply  chain  of 

106 / 148 

 
 
 
 
 
biogas/biomethane,  including  leaks  beyond  the  processing  stage  to  reduce  fugitive 
methane  emissions.  Public  authorities  agreed  with  legislating  mitigation  of  emissions 
from biogas/biomethane as these plants’ methane emissions represent a relevant share of 
emissions. 

Section VIII: Legislating mitigation of emissions from coal 

A  majority  of  respondents  (76%)  consider  that  the  EU  regulation  to  reduce  methane 
emissions in the energy sector should cover coalmine methane and NGOs mentioned that 
it  would  incentivise  the  move  away  from  coal.  While  some  companies  are  of  the  view 
that  coal  must  be  addressed  as  a  major  emission  source  to  achieve  the  EU’s 
environmental targets, others insisted that the specificities of the mining sector should be 
taken  into  account.  Some  business  associations  mentioned  that  coalmine  methane  is  a 
significant  source  of  methane  emissions  and  thus  should  be  regulated,  while  others 
pointed  out  that  some  Member  States  are  already  measuring  and  reporting  fugitive 
methane emissions in the coal sector using higher tier methods.  

On coalmine methane mitigation, safety requirements for ventilation appear to be one of 
the  most  important  considerations  (75%  of  answers).  On  abandoned  mine  methane 
mitigation,  a  majority  of  respondents  (80%)  considered  that  AMM  ownership  rights 
should  be  addressed  in  EU  legislation  and  most  respondents  (74%)  agreed  that  EU 
methane  legislation  should  set  an  obligation  on  mine  operators  to  install  recovery 
systems for future gas recovery after abandonment/closure.  

Different  conclusions  can  be  drawn  on  legislating  mitigation  of  emissions  from  coal. 
While  stakeholders  think  EU  regulation  should  cover  coalmine  methane,  safety 
requirements  for  ventilation  and  the  constraints  they  imply  are  considered  highly 
important.  Abandoned  mine  methane  ownership  rights  should  be  addressed  in  EU 
legislation according to a majority of responses. 

Section IX: Synergies with other sectors 

Companies and business organisations underlined that MRV and LDAR measures from 
the  energy  sector  should  be  assessed  for  transferability  to  the  agriculture  and  waste 
sector. Some business  associations mentioned that  the production of biogas/biomethane 
from agriculture and waste sectors can contribute to the reduction of methane emissions 
as agriculture is the biggest emitter. Some respondents from this category also mention 
that the inclusion or extension of MRV legislation to landfills or waste treatment plants 
should be considered. NGOs specified that the upcoming methane obligations on MRV, 
LDAR, and BRVF should apply equally to co-products and components of oil and fossil 
gas that co-contribute to methane emissions at oil and fossil gas sites and facilities. 

Consultation on costs of implementing MRV regulation based on OGMP 

Following the Open Public Consultation, an additional questionnaire was transmitted to 
OGMP member companies via the main oil and gas associations (IOGP, Eurogas, GIE-
Marcogaz-EntsoG),  with  detailed  questions  on  the  costs  and  administrative  burden  of 
implementing the requirements on MRV in line with OGMP (including also reporting to 

107 / 148 

 
 
 
 
 
relevant national Member State authorities before the information is passed on to UNEP 
to  allow  the  International  Methane  Emissions  Observatory  (IMEO)  to  perform  its 
analysis on the reported information) on 28 May with a request for responses by 11 June 
2021. 

In  total,  the  questionnaire  received  responses  from  6  association  and  30  individual 
companies from  different  parts of the supply chain  (see figure A.2.2) and with  a broad 
geographical coverage (see figure A.2.3).  

Type of respondent

Association; 6

United 
Kingdom; 2

Respondents' country

TSO; 17

DSO; 4

Storage; 
4

Spain; 3

Slovakia; 2

Portugal; 1

Poland; 1

Norway; 1

North 
Macedonia; 
1
Netherlands; 
1
Morocco; 1

Italy; 3

Austria; 1

Belgium; 3

Czechia; 1

Denmark; 1

France; 3

Germany; 7

Supplier; 3

Producer; 2

Ireland; 1

Hungary; 1

Greece; 2

Figure A.2.2 Type of respondents 

Figure A.2.3 Geographical coverage 

Of the 30 responding companies, 22 have signed up to the OGMP 2.0 framework, 3 have 
not yet signed up but intend to do so, 4 have not signed up and have no (current) plans to 
do so, and 1 did not respond to the relevant question.  

Qualifying  the  anticipated  additional  costs  and  administrative  burden  of  implementing 
the requirements on methane measurement, reporting and verification in line with OGMP 
(including  also  reporting  to  the  relevant  national  Member  State  national  authorities 
before the information is passed on to UNEP and the IMEO for final verification), 64% 
of  respondents  consider  them  to  be  significant  (Figure  A.2.4  and  A.2.5)190,  while  36% 
consider them not to be significant (qualifying them as either ‘negligible’, as representing 
‘no  additional  cost’  or  as  ‘not  negligible  but  not  significant’°  Note  that  one  of  the  two 
main  industry  associations  that  responded,  the  International  Oil  and  Gas  Association, 
considers  both  additional  costs  and  additional  administrative  burden  of  signing  up  to 
OGMP to be neither negligible nor significant. The distribution across the different types 

190 Note that one association and one company each chose two answers to this question, which were both 
included in the total. 

108 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
of respondents (figure A.2.6) further highlights a clear dichotomy of views on the issue 
of the size of extra costs/administrative burden among industry.  

30

25

20

15

10

5

0

25

20

15

10

5

0

Negligible
additional
cost

No
additional
cost

Significant
additional
cost

Not
negligible
but not
significant
additional
cost

Negligible
additional
administrative
burden

No additional
administrative
burden

Significant
additional
administrative
burden

Not negligible
but not
significant
additional
administrative
burden

Figure A.2.4 Anticipated additional cost 

Figure A.2.5 Anticipated additional administrative burden 

This  could  be explained by the fact  that  only  five respondents  express  having actually  
estimated  how  much  signing  up  to  the  OGMP  would  add  to  their  regulatory 
implementation  costs,  so  much  of  what  the  industry  is  expressing  in  response  to  this 
survey appears to be based on perception rather than real experience  

Requests in the survey for estimates on the additional costs and administrative burden of 
signing up to OGMP garnered very few responses from only 3 of the 36 respondents and 
none  of  the  information  provided  actually  fully  answered  the  question,  thereby 
preventing  an  assessment  of  the  ‘extra’  cost  or  burden  for  those  companies.  The 
responses  received  point  towards  higher  costs  in  the  initial  phases  with  changes  to 
measurement, setup of IT systems, and reporting structures, but smaller costs after initial 
implementation.  Continuing development of requirements (e.g. for Level 5) was given as 
a  key  reason  for  uncertainties  surrounding  costs.  Associations  consider  that  companies 
will be facing different starting points and varying costs and administrative burdens are 
to be expected across Europe.  

Nevertheless, 10 out of 36 respondents consider that the overall benefits of MRV in line 
with OGMP outweigh the proportionate extra cost and administrative burden. Among the 

109 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 responses IOGP, the International Oil and Gas Association, considers that the benefits 
of implementing MRV requirements in line with OGMP will reinforce public confidence 
in the sustainability of the EU’s gas system. Several other respondents also offer such an 
explanation, or something close to it, such as that MRV requirements in line with OGMP 
will contribute to methane emissions mitigation and will therefore  contribute to the EU’s 
climate-neutrality objective, which is key for the gas industry. 

Figure A.2.6 Anticipated additional costs by type of respondent 
Figure A.2.6 Anticipated additional costs by type of respondent 
Figure A.2.6 Anticipated additional costs by type of respondent 
Figure A.2.6 Anticipated additional costs by type of respondent 
Figure A.2.6 Anticipated additional costs by type of respondent 

In  addition,  a  number  of  the  responses  which  do  not  consider  that  the  benefits  will 
outweigh  the  costs  make  it  clear  that  they  have  answered  the  question  purely  from  a 
company’s standpoint, yet provide the additional explanation that the benefits of OGMP 
requirements for MRV accrue to society. 

Lastly,  several  responses  from  regulated  companies  consider  that  benefits  will  not 
outweigh the  costs on the basis that  in  the current  framework, the increased economic 
costs derived from the implementation of MRV enhanced techniques are not recognised 
by national regulatory authorities. 

Respondents  were  asked  about  the  importance  of  different  benefits  of  signing  up  to 
OGMP  in  terms  of  i)  visibility  of  corporate  environmental  responsibility,  ii)  Economic 
benefits  from  MRV  contributing  to  better  emission  mitigation  and  recovery  of  sellable 

110 / 148 

 
 
 
 
 
gas,  and  iii)  Benefits  in  terms  of  increased  capacity/knowledge  of  methane  emissions 
management  gained  from  working  with  peers  and  learning  from  one  another.  While 
visibility  and  capacity  building  are  predominantly  seen  as  important  or  very  important, 
economic benefits are primarily seen as not at all or not very important (Figure A.2.7). 

30

25

20

15

10

5

0

Visibility

Economic

Capacity

Not at all
important

Not very
important

Neutral

Important

Very
important

No answer

Figure A.2.7 Importance of different benefits of signing up to the OGMP 
Figure A.2.7 Importance of different benefits of signing up to the OGMP 
Figure A.2.7 Importance of different benefits of signing up to the OGMP 
Figure A.2.7 Importance of different benefits of signing up to the OGMP 

The most cited other benefit of signing up to OGMP is improvement of the reliability and 
the  transparency  of  industry  data  along  with  establishment  of  common  standards  in 
measurement/calculation  and  reporting  of  methane  emissions.  Additional  benefits 
provided include economic benefits arising from the implementation of MRV measures 
for super emitters; benefits linked to public confidence; the mitigation of venting hazards 
as  well  as  other  safety  benefits;  and  the  effect  it  may  have  on  companies’  license  to 
operate on long-term basis. 

111 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 3: LIST OF ACTIONS IN THE METHANE STRATEGY 

Cross-sectoral actions  

1. The Commission will support improvements in measurement and reporting of 
methane  emissions  by  companies  across  all  relevant  sectors,  including  through 
sector-specific initiatives.  

2. The Commission will support the establishment of an independent international 
methane  emissions  observatory  anchored  in  the  United  Nations  framework,  in 
cooperation  with  international  partners.  The  observatory  would  be  tasked  with 
collecting, 
reconciling,  verifying  and  publishing  anthropogenic  methane 
emissions data at a global level.  

3.  The  Commission  will  strengthen  satellite-based  detection  and  monitoring  of 
methane emissions through the EU’s Copernicus programme, with a view to  

contribute  to  an  EU-coordinated  capability  for  detecting  and  monitoring  global 
super-emitters.  

4. In order to deliver on the increased climate ambition of the 2030 climate target 
plan  impact  assessment,  the  Commission  will  review  relevant  EU  climate  and 
environmental legislation to  more  effectively  address  methane-related  emissions 
notably  the  Industrial  Emissions  Directive  and  the  European  Pollutant  Release 
and Transfer Register.  

5.  The  Commission  will  provide  targeted  support  to  accelerate  the  development 
of  the  market  for  biogas  from  sustainable  sources  such  as  manure  or  organic 
waste  and  residues  via  upcoming  policy  initiatives.  This  will  include  the  future 
gas  market  regulatory  framework  and  the  upcoming  revision  of  the  Renewable 
Energy  Directive.  The  Commission  will  propose  a  pilot  project  to  support  rural 
areas  and  farming  communities  in  building  biogas  projects  and  accessing  funds 
for biogas production from agricultural waste.  

Actions in the energy sector  

6. The Commission will deliver legislative proposals in 2021 on:  

•  Compulsory  measurement,  reporting,  and  verification  (MRV)  for  all 
energy-related  methane  emissions,  building  on  the  Oil  and  Gas  Methane 
Partnership (OGMP 2.0) methodology.  

• Obligation to improve leak detection and repair (LDAR) of leaks on all 
fossil gas infrastructure, as well as any other infrastructure that produces, 
transports or uses fossil gas, including as a feedstock.  

7.  The  Commission  will  consider  legislation  on  eliminating  routine  venting  and 
flaring  in  the  energy  sector  covering  the  full  supply  chain,  up  to  the  point  of 
production.  

112 / 148 

 
 
 
 
8.  The  Commission  will  work  to  extend  the  OGMP  framework  to  more 
companies in the gas and oil upstream, midstream and downstream as well as to 
the coal sector and closed as well as abandoned sites.  

9.  The  Commission  will  promote  remedial  work  under  the  initiative  for  Coal 
Regions in Transition. Best-practice recommendations and/or enabling legislation 
will be brought forward if necessary.  

Actions in the agricultural sector  

10.  In  the  first  half  of  2021,  the  Commission  will  support  setting  up  an  expert 
group  to  analyse  life-cycle  methane  emissions  metrics.  This  group  will  look  at 
livestock,  manure  and  feed  management,  feed  characteristics,  new  technologies 
and  practices  and  other  issues.  It  will  also  work  in  setting  up  a  life  cycle 
methodology on the overall emissions for livestocks.  

11.  By  the  end  of  2021,  the  Commission  –  in  cooperation  with  sectoral  experts 
and Member States – will develop an inventory of best practices and available  

technologies  to  explore  and  promote  the  wider  uptake  of  innovative  mitigating 
actions.  These  actions  will  have  a  special  focus  on  methane  from  enteric 
fermentation.  

12. To encourage carbon-balance calculations at farm level, the Commission will 
by 2022 provide a digital  carbon navigator template and  guidelines on  common 
pathways  for  the  quantitative  calculation  of  greenhouse  gas  emissions  and 
removals.  

13. The Commission will promote the uptake of mitigation technologies through 
the wider deployment of ‘carbon farming’ in Member States and their Common 
Agricultural Policy Strategic Plans, as from 2021.  

14.  In  the  Horizon  Europe  strategic  plan  2021-2024,  the  Commission  will 
consider proposing targeted research on the different factors that effectively lead 
to  methane  emission  reductions,  focusing  on  technology  and  nature  based 
solutions as well as on the factors leading to dietary shift.  

Actions in the waste and wastewater sector  

15.  The  Commission  will  continue  to  tackle  unlawful  practices  and  provide 
technical  assistance  to  Member  States  and  regions.  This  assistance  will  address 
issues  such  as  sub-standard  landfills.  The  Commission  will  also  help  Member 
States  and  regions  to  stabilise  biodegradable  waste  prior  to  disposal  and  its 
increasing use for the production of climate-neutral, circular bio-based materials 
and chemicals, and divert this waste to biogas production.  

16. In the review of the Landfill Directive in 2024, the Commission will consider 
further  action  to  improve  the  management  of  landfill  gas,  minimise  its  harmful 
climate effects, and harness any of its potential energy gains.  

113 / 148 

 
 
 
 
 
17.  In  the  Strategic  Plan  2021-2024  of  Horizon  Europe,  the  Commission  will 
consider proposing targeted research on waste to biomethane technologies.  

International actions  

18. The EU will step-up its contribution to the work of international fora, such as 
through the Climate and Clean Air Coalition (CCAC), the Arctic Council and the 
Association of Southeast Asian Nations (ASEAN).  

19. As part of the EU’s diplomatic and external relations action, the Commission 
will  address  methane  emission  reductions  in  all  relevant  sectors  with  partner 
countries  and  promote  global  coordination  of  efforts  to  address  energy-sector 
methane emissions.  

20.  The  Commission  will  seek  increased  transparency  in  the  energy  sector  by 
working  with  international  partners  to  develop  a  Methane  Supply  Index  in  the 
foreseen international methane emissions observatory.  

21. The Commission will consider methane emission reduction targets, standards 
or  other  incentives  for  fossil  energy  consumed  and  imported  in  the  EU  in  the 
absence of significant commitments from international partners.  

22.  The  Commission  will  support  the  establishment  of  a  detection-and-alert 
process  for  methane  super-emitters  using  EU  satellite  capability,  and  share  this 
information internationally through the foreseen international methane emissions 
observatory.  

23.  The  Commission  will  support  cooperation  with  international  partners, 
including  the  Global  Methane  Initiative,  the  World  Bank’s  Global  Gas  Flaring 
Reduction initiative, and the World Bank’s initiative on Zero Routine Flaring by 
2030, as well as the International Energy Agency.  

24. The Commission will contribute to a series of key international events in the 
build up to the UN General Assembly in New York in September 2021, with the 
objective of securing a UN based pathway on coordinated actions at international 
level to reduce methane emissions.  

114 / 148 

 
 
 
 
 
 
 
ANNEX 4: ANALYTICAL METHODS 

GAINS model 

The GAINS (Greenhouse gas and Air Pollution Information and Simulation) model is an 
integrated  assessment  model  of  air  pollutant  and  greenhouse  gas  emissions  and  their 
interactions.  GAINS  brings  together  data  on  economic  development,  the  structure, 
control  potential  and  costs  of  emission  sources  and  the  formation  and  dispersion  of 
pollutants in the atmosphere.  

In addition to the projection and mitigation of greenhouse gas emissions at detailed sub-
sectorial  level,  GAINS  assesses  air  pollution  impacts  on  human  health  from  fine 
particulate  matter  and  ground-level  ozone,  vegetation  damage  caused  by  ground-level 
ozone,  the  acidification  of  terrestrial  and  aquatic  ecosystems  and  excess  nitrogen 
deposition of soils.  

Model  uses  include  the  projection  of  non-CO2  GHG  emissions  and  air  pollutant 
emissions  for  EU  Reference  scenario  and  policy  scenarios,  calibrated  to  UNFCCC 
emission data as historical data source. This allows for an assessment, per Member State, 
of  the  (technical)  options  and  emission  potential  for  non-CO2  emissions.  Health  and 
environmental co-benefits  of climate and energy  policies such as  energy  efficiency can 
also be assessed.  

The  GAINS  model  is  accessible  for  expert  users  through  a  model  interface191  and  has 
been  developed  and  is  maintained  by  the  International  Institute  of  Applied  Systems 
Analysis192.  The  underlying  algorithms  are  described  in  publicly  available  literature. 
GAINS  and  its  predecessor  RAINS  have  been  peer  reviewed  multiple  times,  in  2004, 
2009 and 2011.  

Sources for data inputs 

The GAINS model assesses emissions to air for given externally produced activity data 
scenarios. For Europe, GAINS uses macroeconomic and energy sector scenarios from the 
PRIMES model, for agricultural sector activity data GAINS adopts historical data from 
EUROSTAT and aligns these with future projections from the CAPRI model. Projections 
for  waste  generation,  organic  content  of  wastewater  and  consumption  of  F-gases  are 
projected in GAINS in consistency with macroeconomic and population scenarios from 
PRIMES.  For  global  scenarios,  GAINS  uses  macroeconomic  and  energy  sector 
projections from IEA World Energy Outlook scenarios and agricultural sector projections 
from FAO. All other input data to GAINS, i.e., sector- and technology- specific emission 
factors  and  cost  parameters,  are 
the 
taken  from 
documentation. 

literature  and  referenced 

in 

Uncertainty in the GAINS model 

191 Source: http://gains.iiasa.ac.at/models/ 
192 Source: http://www.iiasa.ac.at/ 

115 / 148 

 
 
 
                                                           
Several of the data sources come with uncertainties. The exact treatment of these 
uncertainties is described in detail in the publicly available document on GAINS model 
methodology 
(https://ec.europa.eu/clima/sites/default/files/strategies/analysis/models/docs/non_co2_m
ethodology_report_en.pdf). In general, GAINS estimates emissions by multiplying 
detailed activity data with an emission factor and, where applicable, the application of 
mitigation options that change the emission factors. For instance, GAINS might calculate 
methane emissions from coal mining as the product of coal mining activity, the emission 
factor associated with coal mining, and the application (or lack thereof) of mitigation 
options such as pre-mining degasification. Uncertainty exists in all three of these factors: 

  Activity  data:  activity  data  are  projected  into  the  future  taking  into  account 
current economic activity and policies, as well as projections from other parts of 
the EU modelling suite (e.g., agricultural activity data from CAPRI). Projections 
are what if-statement and not necessarily forecasts. Instead, the baseline used can 
be seen as a best  guess  to  represent  reality. However, changes to activity levels 
(e.g.,  through  unforeseen  factors  such  as  a  pandemic)  are  always  possible  in 
reality and not captured by the modelling. 

  Emission  factors:  GAINS  follows  IPCC  methodology  for  emission  factors  as 
closely  as  possible.  Where  available,  GAINS  improves  on  existing  emission 
factors  by  taking  into  account  country-specific  information  to  further  increase 
precision. This includes regular technical exchanges with member states. 

  Mitigation options: GAINS regularly follows developments in both academic and 
policy literature to incorporate the most recent estimates for the cost, availability 
and mitigation potential of different mitigation options. Uncertainty in this regard 
comes  mainly  from  uncertainty  about  future  technological  developments. 
Abatement  potential  in  the  near  term  (e.g.,  in  2030),  is  relatively  less  uncertain 
than abatement potential in the longer term (e.g., in 2050). 

UNEP/CCAC Global Methane Assessment, May 2021  

The CCAC/UNEP Global Methane Assessment193 was peer-reviewed by experts from 
the scientific community as well as multiple governments, and then by the UNEP 
publishing board prior to publication (review rounds Oct 2020; Dec, 2020; Apr 2021). 

Modeling  was  carried  out  by  five  state-of-the-art  composition-climate  models  that 
researchers  who  participated  in  the  assessment  used:  the  CESM2(WACCM6)  model194 

193 UNEP & CCAC (2021) Global Methane Assessment. https://www.ccacoalition.org/en/resources/global-
methane-assessment-full-report 
194 Danabasoglu, G., et al., 2020. The community earth system model version 2 (CESM2). Journal of 
Advances in Modeling Earth Systems, 12(2), 
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2019MS001916.  
Gettelman, Aet al.. (2019). The Whole Atmosphere Community Climate Model Version 6 (WACCM6). J. 
Geophys. Res. https://doi.org/10.1029/2019JD030943  

116 / 148 

 
 
 
 
                                                           
developed  at  the  National  Center  for  Atmospheric  Research  (NCAR)  in  Boulder, 
Colorado,  US;  the  GFDL  AM4.1/ESM4.1  model195  developed  by  NOAA  in  Princeton, 
New  Jersey,  US;  the  Goddard  Institute  of  Space  Studies  (GISS)  E2.1/E2.1-G  model196 
developed by the NASA in New York, New York, US; the MIROC-CHASER model197 
developed  jointly  by  the  Atmosphere  and  Ocean  Research  Institute,  the  University  of 
Tokyo, Kashiwa, the National Institute for Environmental Studies (NIES), Tsukuba, the 
Japan  Agency  for  Marine-Earth  Science  and  Technology,  Yokohama,  and  Nagoya 
University,  Nagoya,  Japan;  and  the  UKESM1  model198  developed  jointly  by  the  Met 
Office, Exeter, UK,  and  the United Kingdom’s academic  community. All these models 
are  ‘world-class’  and  are  key  participants  in  the  Coupled  Model  Intercomparison 
Project’s  6th  phase  (CMIP6)  in  support  of  the  IPCC’s  AR6.  The  AR6  summarizes  the 
uncertainties and assumptions within climate models, and multiple models were used in 
the GMA precisely in order to better characterize uncertainties. 

Analyses of mitigation opportunities was carried out by Integrated Assessment Models. 
The GMA analysis is particularly interested in scenarios consistent with the 1.5°C target 
as assessed in the 2018 IPCC Special Report on Global Warming of 1.5°C199. Here those 
scenarios classified by IPCC as either having at least a 50 per cent likelihood of keeping 
temperatures  below  1.5°C  throughout  the  21st  century  and  those  with  a  median 
temperature below 1.5°C in 2100 but with a 50–66 per cent change of overshooting that 
value during the century, typically by no more than 0.1°C, are considered. Many, but not 
all, of these scenarios were generated within the SSP framework.  

195  Horowitz  et  al.  (2020)  The  GFDL  Global  Atmospheric  Chemistry-Climate  Model  AM4.1:  Model 
Description  and  Simulation  Characteristics.  Journal  of  Advances  in  Modeling  Earth  Systems,  12(10). 
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2019MS002032.  
Dunne  et  al.  (2020)  The  GFDL  Earth  System  Model  Version  4.1  (GFDL-ESM  4.1):  Overall  Coupled 
Model  Description  and  Simulation  Characteristics.  Journal  of  Advances  in  Modeling  Earth  Systems, 
12(11). https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2019MS002015  
196  Kelley  et  al.  (2020)  GISS-E2.1:  Configurations  and  Climatology.  Journal  of  Advances  in  Modeling 
Earth Systems, 12(8). https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2019MS002025  
197  Sekiya  et  al.,  (2018)  Global  high-resolution  simulations  of  tropospheric  nitrogen  dioxide  using 
CHASER V4.0, Geosci. Model Dev., 11, 959–988, https://doi.org/10.5194/gmd-11-959-2018 ;  
Watanabe  et  al.  (2011)  MIROC-ESM  2010:  model  description  and  basic  results  of  CMIP5-20c3m 
experiments. Geosci. Model Dev., 4, 845–872, https://doi.org/10.5194/gmd-4-845-2011;  
Sudo et al. (2002) CHASER: A global chemical model of the troposphere 1. Model description. Journal of 
Geophysical 
7-20, 
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2001JD001113  
198  Archibald  et  al.  (2019)  Description  and  evaluation  of  the  UKCA  stratosphere–troposphere  chemistry 
scheme (StratTrop vn 1.0) implemented in UKESM1. Geosci. Model Dev., 13, 1223–1266, 
https://doi.org/10.5194/gmd-13-1223-2020  
Sellar  et  al.  (2019)  UKESM1:  Description  and  Evaluation  of  the  U.K.  Earth  System  Model.  Journal  of 
11(12). 
Advances 
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2019MS001739  
199 IPCC 2018;  
Rogelj  et  al.  (2018)  Scenarios  towards  limiting  global  mean  temperature  increase  below  1.5  °C.  Nature 
Climate Change, 8, pages 325–332, https://www.nature.com/articles/s41558-018-0091-3 

Atmospheres, 

107(D17), 

Research: 

Modeling 

7-1-ACH 

Systems, 

Earth 

ACH 

in 

117 / 148 

 
 
 
                                                           
Additional analyses of mitigation potentials at the sectoral level were analyzed by several 
teams,  including  IIASA200  (Höglund-Isaksson  2020),  US  EPA  (2019),  the  International 
Energy  Agency201  (IEA;  2020)  and  in  a  literature  review  by  Harmsen  et  al.  (2019)202. 
These  analyses  are  similar  in  their  aims  but  differ  in  coverage  and  methodology.  In 
particular, the IEA analysis includes only the oil and gas subsector and analyses present-
day abatement potentials associated with targeted control measures203. 

Impact  analyses  are  similarly  based  on  peer-reviewed  publications,  and  characterize 
uncertainties  associated  with  the  underlying  exposure-response  functions  (e.g.  for 
mortality, labour impacts, etc.) and those associated with understanding the response of 
the physical system to emissions changes (by examining the variation across the physical 
models, assuming that range provides an indication of uncertainty in physical responses 
as  independently  developed  models  were  utilized).  A  primary  limitation  of  the  impact 
analyses is that impacts that likely exist but for which exposure-response functions have 
not been published in the peer-reviewed literature were omitted. 

For  further  details  on  methods  and  results  descriptions,  please  see  the  UNEP/CCAC 
(2021) Global Methane Assessment documentation. 

IEA Methane Tracker  

The  IEA’s  approach  is  described  in  the  IEA  World  Energy  Model  Documentation 
(WEO-2020)204. It’s estimation of “methane emissions from global oil and gas operations 
relies  on  generating  country-specific  and  production  type-specific  emission  intensities 
that are applied to production and consumption data on a country-by-country basis. [The] 
starting point is to generate emission intensities for upstream and downstream oil and gas 
in the United States. […] The 2017 US Greenhouse Gas Inventory is used for this along 
with  a  range  of  other  data  sources,  including  [an  IEA]  survey  of  companies  and 
countries. The hydrocarbon-, segment-and  production-specific emission  intensities  are  
then  further  segregated  into  fugitive,  vented  and incomplete flaring emissions to give 
a total of 19 separate emission intensities.” (p.63) 

The  marginal  abatement  cost  curves  for  methane  emissions  in  the  oil  and  gas  sector 
presented  in  the  Methane  Tracker205,  and  underlying  the  analysis  used  in  this  Impact 

200 Höglund-Isaksson, L., Gómez-Sanabria, A., Klimont, Z., Rafaj, P. and Schöpp, W., 2020. Technical 
potentials and costs for reducing global anthropogenic methane emissions in the 2050 timeframe–results 
from the GAINS model. Environmental Research Communications, 2(2), 
https://iopscience.iop.org/article/10.1088/2515-7620/ab7457. 
201 IEA Methane Tracker (2020) https://www.iea.org/reports/methane-tracker-2020 
202 Harmsen, J.H.M., van Vuuren, D.P., Nayak, D.R., Hof, A.F., Höglund-Isaksson, L., Lucas, P.L., 
Nielsen, J.B., Smith, P. and Stehfest, E., 2019. Long-term marginal abatement cost curves of non-CO2 
greenhouse gases. Environmental Science & Policy, 99, pp.136-149. 
https://www.sciencedirect.com/science/article/pii/S146290111830889X  
203 IEA Methane Tracker (2020) https://www.iea.org/reports/methane-tracker-2020  
204 https://iea.blob.core.windows.net/assets/dd88335f-91ab-4dbd-8de7-
d2dc4fee90e0/WEM_Documentation_WEO2020.pdf  
205 IEA Methane Tracker (2021) https://www.iea.org/reports/methane-tracker-2021  

118 / 148 

 
 
 
                                                           
Assessment, are constructed by starting with these 19 possible emissions sources. These 
are  then  separated  into  86  equipment-specific  emissions  sources  (e.g.  high  bleed 
pneumatic devices) based on proportions  from  the United States, although a number of 
country-specific modifications are made. 

Abatement options (e.g. install vapour recovery units) are next assessed for each of the 
86  sources  and  the  costs  and  savings  of  these  included  in  the  marginal  abatement  cost 
curves.  Unfortunately,  specific  costs  and  applicability  factors  for  the  individual 
abatement  options  cannot  be  provided,  as  they  are  based  on  proprietary  information 
gathered  by  ICF  (although  some  data  has  made  available  publicly206).  Costs  are  again 
based upon information from the United States, with modifications again for labour costs 
and capital costs across different countries. The marginal abatement cost curves also take 
into  account  the  fact  that  many  of  the  abatement  options  would  save  natural  gas  that 
could subsequently be sold, which is why there are a number of “negative cost” options 
available. 

For this revenue calculation, the IEA use well-head prices in each country, which for the 
current data in the Methane Tracker is based on natural  gas import prices in the WEO-
2020.  Prices  assume  that  there  are  no  domestic  consumption  subsidies,  but  some 
allowances for operational expenses are made so that the price at the well-head is slightly 
lower than the regional gas price. 

The relevant  well-head  price for  gas  exporting countries is  taken as the import price in 
their  largest  export  market  net-backed  to  the  emissions  source.  For  example,  in  Russia 
the export price is taken as the import price in Europe. Export taxes are then subtracted 
along with a further $0.5/MBtu to cover the cost of transport by pipeline. 

In  the  marginal  abatement  cost  curve,  the  costs  and  revenue  for  each  technology  or 
abatement measure are converted into net present value using a discount rate of 10% and 
divided by the volume of emissions saved to give the cost in dollars per million British 
thermal units (MBtu).  

The  IEA  has  been  working  to  incorporate  new  studies  and  regional  information  from 
relevant  stakeholders  in  these  estimates,  including  satellite-data  on  large  leaks,  but  a 
considerable  level  of  uncertainty  remains  due  to  the  overall  lack  of  measured  data  on 
methane leaks and the scant information available for a number of countries. However, 
IEA estimates do fall in a similar range as other key references in this subject, including 
the Global Methane Assessment207. 

206 ICF (2016a), Economic Analysis of Methane Emission Reduction Potential from Natural Gas Systems. 
Fairfax, VA, United States: ICF  
ICF (2016b), Summary of Methane Emission Reduction Opportunities Across North American Oil and 
Natural Gas Industries. Fairfax, VA, United States: ICF. 
207 UNEP & CCAC (2021) Global Methane Assessment. https://www.ccacoalition.org/en/resources/global-
methane-assessment-full-report  

119 / 148 

 
 
 
                                                           
ANNEX 5: WHO IS AFFECTED AND HOW? 

Policy Area 2 

As indicated in the section on impacts of the policy options, these projections for coal and for oil and gas are taken from GAINS modelling results 
for  the  impact  assessments  for  the  Fit-for-55  package.  The  thresholds  for  ‘low  costs’  and  ‘less  than  costs  equivalent  to  sum  of  social  and 
environmental  costs’  are  taken  from  the  Climate  and  Clean  Air  Coalition/United  Nations  Environment  Programme  May  2021  report  ‘Global 
Methane Assessment: Benefits and Costs of Mitigating Methane Emissions’. 

Table  A.5.1.  GAINS  projections  of  EU  27  coal  sector  baseline  methane  emission  reductions  and  additional  emission  reductions  available  at 
different levels of abatement costs 

Total projected baseline 
emissions (kt CH4)  

Total projected baseline 
reductions in methane 
emissions (KT CH4) 
from 2020 

Total projected reductions 
in methane emissions (KT 
CH4) 
on top of the baseline 
available at all costs 

Total projected reductions in 
methane emissions (KT CH4) 
on top of the baseline available 
at zero costs 

Total projected reductions in 
methane emissions (KT CH4) on 
top of the baseline available at less 
than low costs 

Year 
Coal mining 
Abandoned coal 
mines 

Total 

2030 
255 

112 

367 

2040 
37 

89 

126 

2050 
32 

74 

106 

2030 

2040 

2050 

593 

833 

852 

2030 
147 

101 

247 

2040 
26 

82 
107 

2050 
23 

69 

92 

2030 
5 

101 
106 

2040 
0 

82 
82 

2050 
4 

69 
72 

2030 
117 

101 
218 

2040 
20 

82 
102 

2050 
23 

69 
92 

Total projected reductions in 
methane emissions (KT CH4) 
on top of the baseline available 
at less than social and 
environmental costs of 
methane 
2040 
26 

2030 
146 

2050 
23 

101 
247 

82 
107 

69 
92 

Source: GAINS modelling results for the impact assessments for the Fit-for-55 package 

Note 1: low cost is greater than zero and less than 2018 US$ 600 per tonne of methane = 509 Euros per tonne of methane (at average exchange rate for the year 2018 of 0.8475 euro/US dollar), or greater than zero and less than 
US$ 21.4 per tonne of CO2 equiv. = 18.1 Euros per tonne of CO2 equiv. in line with CCAC/UNEP 'Global Methane Assessment', May 2021 

Social and environmental costs of methane emissions is equivalent to 2018 US$4,300 per tonne of methane or 3,644 Euros per tonne of methane or 130 euros per tonne of CO2 equiv. [Based on estimations of social benefits from 
CCAC/UNEP 'Global Methane assessment', May 2021 

 
 
 
       
  
  
  
  
  
  
 
 
 
 
Table  A.5.2.  GAINS  projections  of  EU  27  oil  and  fossil  gas  baseline  methane  emissions  and additional  emission  reductions  available  at  different 
levels of abatement costs 

Source: GAINS modelling results for the impact assessments for the Fit-for-55 package 

Note : low cost is greater than zero and less than 2018 US$ 600 per tonne of methane = 509 Euros per tonne of methane (at average exchange rate for the year 2018 of 0.8475 euro/US dollar), or greater than zero and less than 
US$ 21.4 per tonne of CO2 equiv. = 18.1 Euros per tonne of CO2 equiv. in line with CCAC/UNEP 'Global Methane Assessment', May 2021 

Social and environmental costs of methane emissions abatement is equivalent to 2018 US$4,300 per tonne of methane or 3,644 Euros per tonne of methane or 130 euros per tonne of CO2 equiv. [Based on estimations of social 
benefits from CCAC/UNEP 'Global Methane assessment', May 2021 

121 / 148 

Year203020402050203020402050203020402050203020402050203020402050203020402050Gas transmission2151521733810180213150172118891051188910511889105Gas distribution243146137115212221240145136126828312682831268283Oil and gas production25511444-281131832171003849323411890342149938Total713412355125426483670394345292203222361261222458270225Total projected baseline emissions (kt CH4) Total projected reductions in methane emissions (KT CH4) on top of the baseline available at zero costsTotal projected reductions in methane emissions (KT CH4) on top of the baseline available at less than low costsTotal projected reductions in methane emissions (KT CH4) on top of the baseline available at less than social and environmental costs of methaneTotal projected baseline reductions in methane emissions (KT CH4)from 2020Total projected reductions in methane emissions (KT CH4)on top of the baseline available at all costs 
 
 
 
 
Table A.5.3: comparison of the share of projected GAINS methane emission reductions over and above the baseline level that can abated at different 
levels of abatement costs 

Options  

Year 

Coal emissions 

Oil and gas 
emissions 

Oil, gas and coal emissions 

Share of EU energy sector  
emissions covered* 

Total projected reductions in methane 
emissions (KT CH4) on top of the 
baseline available at all costs** 

Share of total projected reductions in 
methane emissions  that can be abated 
at zero costs** 

Share of total projected emissions that 
can be abated 
at less than low costs*** 

Share of total projected emissions that 
can be abated 
at less than sum of social benefits**** 

2019 

2030 

2040 

2050 

2030 

2040 

2050 

2030 

2040 

2050 

2030 

2040 

2050 

32% 

247 

107 

92 

43% 

76% 

79% 

88% 

95% 

100% 

100% 

100% 

100% 

33% 

670 

394 

345 

44% 

52% 

64% 

54% 

66% 

64% 

68% 

68% 

65% 

65% 

918 

502 

437 

43% 

57% 

67% 

63% 

72% 

72% 

77% 

75% 

73% 

All of these figures represent emission abatement which is available on top of the baseline (business as usual) scenario at different levels of costs effectiveness 

* On the basis of 2019 GHG inventories data 

122 / 148 

 
 
 
** GAINS modelling results for the impact assessments for the Fit-for-55 package 

*** 'Low cost' is greater than zero and less than 2018 US$ 600 per tonne of methane, equivalent to 509 Euros per tonne of methane (at average exchange rate for the year 2018 of 
0.8475 euro/US dollar), or greater than zero and less than US$ 21 per tonne of CO2 equiv., equivalent to 18.1 Euros per tonne of CO2 equiv. [Based on estimation of low costs from 
CCAC/UNEP 'Global Methane Assessment', May 2021]. Though cots effective, measures above 10 euros per tonne of oil equivalent  considered eqivalent to high ambition methane 
mitigation. 

**** Social and environmental  benefits of methane emissions   abatement amount to 2018 US$ 4,300 per tonne of methane, equivalent to 3,644 Euros per tonne of methane or 130 
Euros 
equiv.  
[Based on estimation of social benefits from CCAC/UNEP 'Global Methane Assessment', May 2021] 

tonne 

CO2 

per 

of 

There  are  other  projections  that  arrive  at  very  similar  conclusions  as  these  GAINS  model  projections  in  terms  of  the  types  of  cost-effective  methane 
abatement  measures  available  in  the  oil  and  gas  sectors.  For  instance,  the  Climate  Clean  Air  Coalition/United  Nations  Environment  Programme  May 
2021 report ‘Global Methane Assessment: Benefits and Costs of Mitigating Methane Emissions’ states that 60% of targeted measures in the oil and gas 
sectors have low mitigation costs (of less than 18.1 euros per ton of CO2 equivalent) and 50% have negative costs, and that these include upstream and 
downstream leak detection and repair, recovery and utilization of vented gas and installation of flares. 

123 / 148 

 
 
 
 
Table A.5.4: Summary of costs and benefits for the options in policy area 2 in 2030 

Options  

Level of abatement costs 

2.1 (oil and gas) 

Negative and zero 
costs 

2.2 (oil and gas) 
Social and 
environmental 
cost 

2.3a (oil, gas and 
coal) 

Social and 
environmental cost 

2.3a (coal only) 
Social and 
environmental 
cost 

2.4 (oil, gas and 
coal) 

Social and 
environmental cost 

Total  methane emissions 
abatement in 2030 (kt 
methane)*  
Total costs (million Euros) of 
measures to companies in 2030* 
Total social and environmental 
benefits of abatement (million 
Euros) to society in 2030** 

Net socio-economic benefits 
(Million Euros) in 2030 
Annual premature deaths  
due to ozone prevented*** in 
2030 
Annual asthma-related accident 
and emergency  
department visits avoided*** in 
2030 

Annual hospitalizations  
avoided*** in 2030 
Annual losses of wheat, soybean, 
maize and rice due to ozone 
exposure (in tons) avoided*** in 
2030 

Annual hours of work loss due 
to extreme heat avoided (million 
hours)*** in 2030 

Notes:  

292 

0 

1064 

1064 

418 

458 

93 

1669 

1576 

655 

706 

127 

2573 

2446 

1010 

1168 

1832 

2824 

26 

41 

64 

247 

34 

900 

866 

353 

988 

22 

706 

127 

2573 

2446 

1010 

2824 

64 

42340 

66410 

102370 

35815 

102370 

117 

183 

282 

99 

282 

124 / 148 

 
 
All of these figures on costs and benefits are on top of the baseline (business as usual) scenario 

*Source:  GAINS  modelling  results  for  the  impact  assessments  for  the  Fit-for-55  package  and  social  benefits  based  on  estimations  from  CCAC/UNEP  'Global  Methane 
Assessment', May 2021 Social benefits of abating methane amount to 2018 US$ 4,300 per tonne of methane, equivalent to 3,644 Euros per tonne of methane or 130 Euros per 
tonne of CO2 equiv. 
** Social and environmental benefits of methane abatement amount to 2018 US$ 4,300 per tonne of methane, equivalent to 3,644 Euros per tonne of methane or 130 Euros per 
tonne of CO2 equiv. [Based on estimation of social benefits from CCAC/UNEP 'Global Methane Assessment', May 2021] 

*** Based on estimation of social benefits from CCAC/UNEP 'Global Methane Assessment', May 20 

125 / 148 

 
 
 
 
Policy Area 3 

Tables A.5.5 and A.5.6 below show key results of estimations from the International Energy Agency208 of methane emission reductions that could be 
achieved in a sample of key exporting countries to the EU under various different abatement cost  considerations. They also show  the size of the 
overall and net social and environmental benefits that are implied by the abatement of methane emissions in those countries compared to if policy 
action was focussed only on the EU. The same basis for the estimations of benefits is used for those countries as for the EU (using UNEP/CCAC 
assessments).   

They cover estimations for fossil gas and oil, as estimations for coal were not available. The results are not shown per country: they represent the 
sum of estimations of all energy sector methane emission reductions achievable in the following top (in volume terms) exporting countries of oil and 
fossil gas to the EU:  

o  Oil: Russia, Saudi Arabia, US, Iraq, Norway;  
o  Fossil gas: Russia, Norway, Algeria, Qatar, Nigeria, US.  

Table  A.5.5.  Comparison  of  the  share  of  estimations  of  methane  emission  reductions  that  can  abated  at  different  levels  of  abatement  costs  for  a 
selection of top oil and fossil gas exporting countries to the EU* 

Options 

Option 3.1 to option 
3.3 

Total projected reductions  
in methane emissions (KT 
CH4)** 

Share of reductions that 
can be abated 
at negative or zero costs 
Share of reductions that 
can be abated 

25,771 

33% 

98% 

208 IEA Methane Tracker 2020 (https://www.iea.org/reports/methane-tracker-2020) 

126 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
at costs less or equal to low 
costs*** 

Share of reductions that 
can be abated 
at costs less than sum of 
social and environmental 
costs**** 

99% 

Source: 

IEA  Methane 

Notes:   
* This includes the following countries: (oil) Russia, Saudi Arabia, US, 
Iraq, Norway; (fossil gas) Russia, Norway, Algeria, Qatar, Nigeria, US.  
** 
(https://www.iea.org/reports/methane-tracker-2020)  
***  'Low cost' is greater than zero and less than 2018 US$ 600 per tonne of  methane, equivalent to 509 
Euros  per  tonne  of  methane  (at  average  exchange  rate  for  the  year  2018  of  0.8475  euro/US  dollar),  or 
greater than zero and less than US$ 21 per tonne of CO2 equiv., equivalent to 18.2 Euros per tonne of CO2 
equiv. [Based on estimation of low costs from CCAC/UNEP 'Global Methane Assessment', May 2021] 
****  Social  and  environmental  costs  of  methane  amount  to  2018  US$  4,300  per  tonne  of  methane, 
equivalent to 3,644 Euros per tonne of methane or 130 Euros per tonne of CO2 equiv. [Based on estimation 
of social benefits from CCAC/UNEP 'Global Methane Assessment', May 2021] 

Tracker 

2020 

127 / 148 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A.5.6. Summary of costs and benefits for the options in policy area 3 for a 
selection of top oil and fossil gas exporting countries to the EU* 

Options 

3.1 to 3.3 

Total projected reductions  
in methane emissions by 2030 (KT 
methane) achievable at costs less than 
sum of social and environmental costs** 

Total costs (million US$) of measures 
available at  cost less than social and 
environmental costs*** 

Total social benefits (Million US$) of 
measures available at cost less than 
social and environmental costs*** 

25,513 

2,607 

110,225 

Net social benefits (Million US$) 

107,618 

Annual premature deaths  
due to ozone prevented**** 

Annual asthma-related accident and 
emergency  
department visits avoided**** 

36,656 

102,535 

128 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual hospitalizations  
avoided**** 

Annual losses of wheat, soybean, maize 
and rice due to ozone exposure (in tons) 
avoided**** 

Annual hours of work loss due to 
extreme heat avoided (million 
hours)**** 

2,307 

3,716,883 

10,253 

Notes: 
* This includes the following countries: (oil) Russia, Saudi Arabia, US, Iraq, Norway; (fossil gas) Russia, Norway, Algeria, Qatar, Nigeria, US  
** Source: IEA Methane Tracker 2020 
*** Social and environmental benefits of abating methane amount to 2018 US$ 4,300 per tonne of methane, equivalent to 3,644 Euros per tonne of methane or 130 Euros per tonne of 
CO2 equiv. [Based on estimation of social benefits from CCAC/UNEP 'Global Methane Assessment', May 2021] 
**** Based on estimations of social and environmental benefits from CCAC/UNEP 'Global Methane Assessment', May 2021 

The numbers  in  tables A.5.5 and A.5.6 are  derived from  estimations  from  the  IEA Methane Tracker 2020 (https://www.iea.org/reports/methane-
tracker-2020), but the basis for the calculations of the shares of emissions at less or equal to low costs and at  less than costs equivalent to sum of 
social benefits are the estimations taken from the Climate Clean Air/United Nations Environment Programme May 2021 report ‘Global Methane 
Assessment: Benefits and Costs of Mitigating Methane Emissions’. 

The CCAC/UNEP report also highlighted relevant findings related to costs of measures from analysis of a number of global projections of methane 
emissions reductions which support the IEA projections, as follows: 

  There  are  readily  available  targeted  measures  that  can  reduce  2030 global methane emissions by 30 per cent, around 120 Mt/yr. Nearly 
half of these technologies are available to the fossil fuel sector in which it is relatively easy to reduce methane at the point of emission and 
along production/transmission lines. 

129 / 148 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Roughly 60 per cent, around 75 Mt/yr, of available targeted measures have low mitigation costs (Less than US$ 600 per tonne of methane 
reduced, which would correspond to ~US$ 21 per tonne of carbon dioxide equivalent if converted using the IPCC AR5 GWP100 value of 
28) and just over 50 per cent of those have negative costs – the measures pay for themselves quickly by saving money. Low-cost abatement 
potentials range from 60–80 per cent of the total for oil and gas and from 55–98 per cent for coal. The greatest potential for negative cost 
abatement is in the oil and gas subsector where captured methane adds to revenue instead of being released to the atmosphere. 

  Readily available targeted measures could reduce emissions from the oil and gas sector by 29–57 Mt/yr and from the coal sector by 12–25 

Mt/yr. Targeted measures in the oil, gas and coal measures include: 

o  Upstream and downstream leak detection and repair. 

o  Recovery  and  utilization  of  vented  gas:  capture  of  associated  gas  from  oil  wells;  blowdown  capture;  recovery  and  utilization  of 

vented gas with vapor recovery units and well plungers; Installation of flares. 

o  Coal  mine  methane  management:  pre-mining  degasification  and  recovery  and  oxidation  of  ventilation  air  methane;  flooding 

abandoned coal mines. 

  The largest mitigation potential from oil and gas is in  the  Middle  East,  North  America  and  Russia. 

Additional findings supportive of both IEA and UNEP/CCAC findings on the low cost of methane mitigation measures in the enegy sector is also 
available from another recent study (Ocko et al: Acting rapidly to deploy readily available methane mitigation measures by sector can immediately 
slow global warming, 25 January 2021), which highlights the following: 

  For oil and  gas  emissions,  we  supplement  IEA  (2017)  no cost abatement potential of 45% below present-day emissions with oil and gas 
company commitments of limiting upstream natural gas leaks to 0.2% of total production levels. This yields an increase in the abatement 
potential from 50% below 2030 levels to 77%.   

  For oil and gas, we supplement the  IEA  (2017)  abatement  potential  of  75%  below current levels with voluntary company  commitments 

of capping upstream leakage. This results in an 83% below 2030 level abatement  potential rather than 77% without industry targets. 

  Prominent methane mitigation measures in the oil and gas sectors that are specified in at least one assessment of marginal abatement cost 
curves and maximum technical abatement potentials include: upstream leak detection and replacement∗, replacing pumps∗, replacing with 
instrument  air  systems∗,  vapour  recovery  units∗,  blowdown  capture∗,  replace  with  electric  motor,  early  replace  ment  of  devices,  replace 

130 / 148 

 
 
compressor seal or rod, install flares, install plunger, downstream leak detection and replacement (∗ indicates sometimes can be at no net 
cost); 

  Prominent methane mitigation measures in the coal sector that are specified in at least one assessment of marginal abatement cost curves and 
maximum  technical  abatement  potentials  include:  pre-mining  degasification∗,  coal  drying∗,  flooding  abandoned  mines∗,  ventilation  air 
methane with improved ventilation, open flaring ((∗ indicates sometimes can be at no net cost). 

Overview of costs of the preferred option 

Policy area 1: 
Improving measuring 
and reporting of 
methane emissions in 
the EU 

Type of costs 

Businesses 

Administrations 

Citizens/consumers 

Costs of abatement  

No  quantified 
costs  of 
to 
implementing  MRV 
companies  were  available 
but  a  survey  of  the  oil  and 
gas  industry  revealed  that 
be 
these  would 
significant 

not 

Costs of verifying 
compliance and 
enforcement  

N/A 

N/A= not applicable 

N/A 

N/A 

enforcement 

No  quantified  costs  of 
verifying  compliance  and 
were 
of 
available  but  competent 
authorities  in  the  EU  are 
checking 
already 
with 
compliance 
regulations  requiring  MRV 
of  methane  emissions  (ex: 
E-PRTR)  from  sub-sectors 
not covered in the scope of 
this  report  and  are  also 
reporting 
and  verifying 
methane  emissions  in  the 
of  EU  GHG 
context 

131 / 148 

 
 
 
 
 
 
 
 
Policy area 2: 
Mitigation of methane 
emissions in the EU 

Impacts on energy prices 

N/A 

N/A 

inventories,  so  the  extra 
costs  are  unlikely  to  be 
significant. 

Costs of abatement  

127 million Euros  

N/A 

Costs of verifying 
compliance and 
enforcement  

N/A 

enforcement 

No  quantified  costs  of 
verifying  compliance  and 
of 
were 
available  but  the  level  of 
quantitative  benefits  are  so 
significant compared to the 
the  abatement 
costs  of 
measures 
to  companies, 
that the difference between 
the two is expected to more 
than  adequately  cover  for 
all such costs. 

Impacts on energy prices 

N/A 

N/A 

prices 

No  quantified  impacts  on 
of 
energy 
implementing  MRV  were 
available  but  given 
the 
limited  impacts  expected  on 
company  costs,  these  would 
not be significant. 

N/A 

N/A 

No quantified impacts of the 
costs of abatement measures 
on 
energy  prices  were 
available but the costs of the 
(127  million 
measures 
insignificant 
Euros) 
relative  to  the  overall  costs 
to the EU of purchasing oil, 
fossil  (184  billion  Euros  in 

are 

132 / 148 

 
 
 
 
 
 
Costs of abatement  

Policy area 3: 
Measuring, reporting 
and mitigation of 
methane emissions 
linked to EU fossil fuel 
consumption but 
occurring outside the 
EU 

No  quantified  costs  were 
available  of  the  measures  to 
abate  methane  emissions 
occurring  abroad  but  linked 
to EU consumption of  fossil 
energy.  Estimations  of  the 
total  costs  of  all  abatement 
measures across a sample of 
the  largest  oil  and  fossil  gas 
exporting  countries  were 
used  instead  as  proxy.  At 
social/environmental 
optimal  level  of  abatement, 
they amount to 2,216 million 
Euros. 

Costs of verifying 
compliance and 
enforcement  

N/A 

2020/287  billlion  Euros  in 
2019) gas and coal such that 
they would be negligible. 

N/A 

N/A 

enforcement 

No  quantified  costs  of 
verifying  compliance  and 
were 
of 
available  but  the  level  of 
quantitative  benefits  across 
a  sample  of  the  largest  oil 
and  fossil  gas  exporting 
countries  to  the  EU  are  so 
significant compared to the 
the  abatement 
costs  of 
measures 
to  companies, 
that the difference between 
the two is expected to more 
than  adequately  cover  for 

133 / 148 

 
 
 
 
 
Impacts on energy prices 

all such costs. 

fossil 
to 

No  quantified  impacts  of 
abatement  measures 
on 
energy prices were available 
but  the  level  of  costs  across 
a  sample  of  the  largest  oil 
and 
exporting 
countries 
the  EU  are 
small  (2,607  million  Euros) 
relative  to  the  costs  to  the 
EU  of  purchasing  oil,  fossil 
gas  and  coal  (184  billion 
Euros  in  2020/287  billlion 
Euros  in  2019)  that  they 
would 
be 
significant. 

unlikely 

134 / 148 

 
 
 
 
 
 
Benefits of options 

For  policy  areas  2  and  3,  the  estimation  of  the  benefits  included  in  the  section  on  impacts  of  the  policy  options  are  based  on  the  estimations 
contained in the Climate Clean Air/United Nations Environment Programme May 2021 report ‘Global Methane Assessment: Benefits and Costs of 
Mitigating Methane Emissions’, as follows: 

  The global monetised benefits for all market and non-market impacts are approximately US$ 4,300 per tonne of methane reduced (Monetary 
values are in 2018 US$), which amounts to 3,644 Euros per tonne of methane or 130 euros per tonne of CO2 equiv. Every million tonne (Mt) of 
methane reduced: 

o  prevents approximately 1 430 annual premature deaths due to ozone globally. Of those, 740 would have died from respiratory disease 

and 690 from cardiovascular disease.  

o  avoids approximately 4,000 asthma-related accident and emergency department visits and 90 hospitalizations per year.  

o  avoids losses of 145,000 tonnes of wheat, soybeans, maize and rice ozone exposure every year. This is roughly equivalent to increased 
global  yields  of 55 000 tonnes of wheat,  17 000 tonnes of soybeans, 42  000 tonnes of maize, and 31 000 tonnes of rice annually for 
every million tonnes of methane reduced.  

o  avoids the annual loss of roughly 400 million hours of work, approximately 180 000 years, globally due to extreme heat.  

Overview of benefits of the preferred options 

Type of benefit 

Amount (if possible, otherwise qualitative statement) 

Policy area 1 

Social and environmental 
impacts  

Economic impacts 

Policy area 2 

Social and environmental 

No quantified benefits of implementing MRV for oil, fossil gas and coal were available but 
other  than  contributing  to  improving  the  quality  of  methane  emissions  data,  better  MRV 
allows  for  more  targeted  action  to  reduce  methane  emissions,  which  will  ultimately 
contribute to greater reductions in such emissions, with all the associated environmental and 
social benefits. 

No quantified benefits of implementing MRV for oil, fossil gas and coal were available but 
other  than  contributing  to  improving  the  quality  of  methane  emissions  data,  better  MRV 
allows  for  more  targeted  action  to  reduce  methane  emissions,  a  large  share  of  which  is 
achievable at high net socio-economic benefits to society (see policy area 2). 

Additional  methane  emission  reductions  (on  top  of  baseline  emission  reductions)  of, 
respectively, 706, 377 and 317 kilotonnes of methane respectively in 2030, 2040 and 2050.  

 
 
 
 
impacts  

Economic impacts 

Policy area 3 

Social and environmental 
impacts 

Economic impacts 

The environmental and social benefits associated with 706 kilotonnes of methane emission 
reductions  include:  1,010  annual  premature  deaths  due  to  ozone  prevented,  2,824  annual 
asthma-related  accident  and  emergency  department  visits  avoided,  64  annual 
hospitalizations avoided, 102,370 tonnes of annual losses of wheat, soybean, maize and rice 
due to ozone exposure avoided, 282 million hours per year of work loss due to extreme heat 
avoided. 

The  total  social  and  environmental  benefits  of  avoiding  706  kilotonnes  of  methane 
emissions  is  2,573  Million  Euros.  Taking  into  account  total  costs  of  measures  of  127 
million euros, the net socio-economic benefits therefore amount to 2,446 million Euros. 

No  estimations  were  available  of  the  amount  of  methane  emissions  occurring  abroad  but 
linked to EU consumption of fossil energy which could be abated at different costs levels. 
Estimations of methane emissions abatement across a sample of the largest oil and fossil gas 
exporting  countries  were  used  instead  as  proxy.  At  social/environmental  optimal  level  of 
abatement,  they  amount  to  25,513  kilotonnes  of  methane.  The  environmental  and  social 
benefits ssociated with that level of abatement include 36,656 annual premature deaths due 
to  ozone  prevented,  102,535  annual  asthma-related  accident  and  emergency  department 
visits  avoided,  2,307  annual  hospitalizations  avoided,  3,716,883  tons  of  annual  losses  of 
wheat,  soybean,  maize  and  rice  due  to  ozone  exposure  avoided;  10,253  million  hours  per 
year of work loss due to extreme heat avoided. 

No  estimations  were  available  of  the  net  socio-economic  benefits  of  the  abatement  of 
methane  emissions  occurring  abroad  but  linked  to  EU  consumption  of  fossil  energy. 
Estimations of methane emissions abatement across a sample of the largest oil and fossil gas 
exporting  countries  were  used  instead  as  proxy.  At  social/environmental  optimal  level  of 
abatement, the net socio-economic benefits amount to 91,475 million Euros. 

136 / 148 

 
 
 
 
ANNEX 6: NOTE ON LINKAGES 

All  “Fit  for  55”  initiatives,  including  this  one  build  on  the  CTP  and  its  underpinning 
impact assessment, but they also expand CTP analysis looking more in detail of actions 
in different sectors and creation of necessary enabling conditions. The CTP showed, on 
the  basis  of  scenarios,  that  achievement  of  increased  climate  target  of  at  least  55%  net 
GHG emissions reduction in 2030 is feasible and enables a smoother trajectory to climate 
neutrality in 2050. It also highlights the need to step-up reductions in methane emissions. 
The  different  initiatives  under  the  “Fit  for  55”  umbrella  have  a  number  of  relevant 
interlinkages with methane emission measurement and mitigation. 

1.  EFFORT SHARING REGULATION 

Under  the  current  Effort  Sharing  Regulation  (ESR),  EU  Member  States  have  binding 
annual greenhouse gas emission targets for 2021-2030 for those sectors of the economy 
that fall outside the scope of the EU Emissions Trading System (EU ETS). These sectors, 
including  transport,  buildings,  agriculture,  non-ETS  industry  and  waste,  account  for 
almost  60%  of  total  domestic  EU  emissions.  The  ESR  covers  carbon  dioxide  (CO2), 
methane  (CH4),  nitrous  oxide  (N2O),  hydrofluorocarbons  (HFCs),  perfluorocarbons 
(PFCs), nitrogen trifluoride (NF3) and sulphur hexafluoride (SF6).  

The  Regulation  recognises  the  different  capacities  of  Member  States  to  take  action  by 
differentiating  targets  according  to  gross  domestic  product  (GDP)  per  capita  across 
Member  States.  This  ensures  fairness  because  higher  income  Member  States  take  on 
more  ambitious  targets  than  lower  income  Member  States.  However,  an  approach  for 
higher income Member States based solely on relative GDP per capita would mean that 
some  would  have  relatively  high  costs  for  reaching  their  targets.  To  address  this,  the 
targets are adjusted to reflect cost-effectiveness for those Member States with an above 
average GDP per capita. The resulting 2030 targets range from 0% to -40% compared to 
2005 levels.  

On  14  July  2021,  the  European  Commission  adopted  a  series  of  legislative  proposals 
setting out how it intends to achieve climate neutrality in the EU by 2050, including the 
intermediate target of an at least 55% net reduction in greenhouse gas emissions by 2030. 
The  package  proposes  to  revise  several  pieces  of  EU  climate  legislation,  including  the 
ESR.  The  proposal  for  the  revision  of  the  ESR  maintains  the  current  scope,  and  hence 
non-distinct inclusion, of methane as well as existing flexibilities under the current Effort 
Sharing  Decision  (e.g.  banking,  borrowing  and  buying  and  selling  between  Member 
States)  and  provides  two  new  flexibilities  to  allow  for  a  fair  and  cost-efficient 
achievement of the targets.  

This  initiative  is  complimentary  to  the  ESR  as  it  introduces  specific  measures  for  the 
mitigation of methane emissions which will contribute to Member States fulfilling their 
targets.  In  addition,  specific  mitigation  measures  can  not  only  trigger  cost  effective 
mitigation potential in the specific sectors covered by the ESR, they can also contribute 
to the trading potential in the ESR between Member States. 

2.  INDUSTRIAL EMISSIONS DIRECTIVE 

The Industrial Emissions Directive or IED is the main EU instrument regulating pollutant 
emissions  from  industrial  installations.  It  aims  to  achieve  a  high  level  of  protection  of 
human  health  and  the  environment  taken  as  a  whole  by  reducing  harmful  industrial 

 
 
 
 
 
emissions  across  the  EU,  in  particular  through  better  application  of  Best  Available 
Techniques  (BAT).  Around  50,000  installations  undertaking  the  industrial  activities 
listed in Annex I of the IED are required to operate in accordance with a permit (granted 
by  the  authorities  in  the  Member  States).  This  permit  should  contain  conditions  set  in 
accordance with  the principles and provisions of the  IED. The  IED is  based on several 
pillars, in particular an integrated approach, use of best available techniques, flexibility, 
inspections and public participation. 

The  IED  is  currently  undergoing  review  to  enhance  the  legal  framework  or  find 
alternative  approaches  to  improve  its  performance.  The  options  being  assessed  include 
the  coverage  of  additional  sectors,  improvements  to  implementation,  improvements  to 
the  Best  Available  Techniques  Reference  Document  (BREF)  process,  and  access  to 
information, participation in decision making and access to justice, as well as the further 
exploration  of  its  possible  contribution  to  circular    economy  objectives  and  interaction 
with the decarbonisation of industry.  

Methane  is  included  in  the  IED  through  its  requirement  for  installations  undertaking 
certain industrial activities to operate in accordance with a permit and conditions which 
include emission limit values based on best available techniques. However, the scope of 
the  IED  excludes  all  fossil  gas  upstream  mid  and  downstream  (LNG,  underground  gas 
storage, transmission, distribution) as well as coal mining/extraction. 

This  initiative  is  hence  complementary  to  the  IED  by  addressing  methane  emissions 
along the entire fossil energy supply chain.  

3.  HYDROGEN  AND  DECARBONISATION  OF  GAS  MARKETS  PACKAGE 

A fully functioning and interconnected internal energy market is crucial for maintaining 
security  of  energy  supply,  increasing  competitiveness  and  ensuring  that  all  consumers 
can  purchase  energy  at  affordable  prices.  Europe's  cross-border  gas  networks  operate 
according to rules that regulate who can use them and under what conditions. The Green 
Deal, the Energy System Integration Strategy and the Hydrogen Strategy all include as a 
key  action  the  review  of  the  legislative  framework  for  competitive  decarbonised  gas 
markets. 

For the decarbonisation of the gas system, important considerations relate to (i) setting-
up a hydrogen market; and (ii) decarbonising the existing natural gas grid in the context 
of the wider energy system decarbonisation.  

In  line  with  the  Hydrogen  Strategy,  a  dedicated  network  of  cross-border  hydrogen 
pipelines is expected to emerge over time, partially from repurposed gas pipelines. The 
emergence of such a network will also affect methane emissions, as repurposed pipelines 
will no longer be subject to methane leakage.  

As  regards  decarbonisation  of  the  existing  grid,  the  deployment  of  biomethane  (and 
synthetic  methane)  is  currently  below  its  potential.  The  current  gas  market  rules  are 
focusing  on  fossil  methane,  imported  via  high-capacity  pipelines  with  underlying  long-
term contracts that backed the construction of these pipelines. There is a need for a level 
playing field for renewable and low carbon gases, ensuring that the tradability and access 
of  renewable  and  low  carbon  gases  to  markets  is  not  limited  compared  to  fossil  gas, 
affecting  the  business  case  of  renewable  and  low  carbon  gases  producers  and  the  costs 

139 / 148 

 
 
 
 
for  achieving  the  EU’s  climate  objectives.  Also  technical  questions  like  the  effects  of 
bio-methane  and  hydrogen  on  gas  quality  and  integrated  network  planning  need  to  be 
addressed.  

Fragmented regulation on methane emissions may pose an additional problem for a fully 
functioning  and  integrated  internal  energy  market  if  it  affects  the  level-playing  field 
between operators and companies across borders. 

4.  RENEWABLE ENERGY DIRECTIVE 

The Renewable Energy Directive II (REDII) is the main EU instrument dealing with the 
promotion of energy from renewable sources. It was adopted in 2018 and has to be fully 
implemented by Member States on 1 July 2021. A targeted review is underway to ensure 
the implementation of the Climate Target plan and other key Commission initiatives such 
as the Energy System Integration Strategy and the Biodiversity Strategy, while ensuring 
coherence with the other initiatives under the “Fit for 55” package.   

In its current  form,  the REDII  establishes  an EU-level  binding renewable energy target 
for 2030 of at least 32 % to be collectively delivered by Member States on the basis of 
voluntary national contributions,  calculated according to an indicative formula included 
in the Governance Regulation. The national (binding) 2020 targets set in REDI also act 
as  a  minimum  share  of  renewables  (“baseline”)  that  Member  States  are  obliged  to 
maintain  after  2020.  REDII  also  sets  an  indicative  target  to  increase  renewables  in  the 
heating  and cooling sector, includes a sectorial  binding target  for transport, strengthens 
the  EU  sustainability  framework  for  bioenergy,  and  includes  a  number  of  enabling 
measures aiming to increase the renewable energy shares in the EU. 

To count towards the targets established by REDII, biogas and biomethane need to fulfil 
a range of sustainability criteria. The REDII contains default GHG savings values which 
already  include  estimations  of  methane  losses.  These  default  values  can  be  used  by 
producers in their reporting of GHG savings of their production to demonstrate that they 
meet RED sustainability requirements and indirectly provide incentives for the reduction 
of methane emissions.  

As  they  are  already  addressed  by  the  REDII,  biogas  and  biomethane  production  is  not 
explicitly dealt with in this initiative.  

5.  TEN-E 

The  Regulation  on  trans-European  energy  networks  (TEN-E)  lays  down  rules  for  the 
timely development and interoperability of trans-European energy networks to ensure the 
functioning of the internal energy market and security of supply in the Union, to promote 
energy efficiency and energy saving and the development of new and renewable forms of 
energy, and to promote the interconnection of energy networks. The TEN-E is a policy 
that is focused on linking the energy infrastructure – electricity, natural and biogas, oil, 
CO2 – of EU countries. The TEN-E Regulation puts in place a framework for Member 
States  and  relevant  stakeholders  to  work  together  in  a  regional  setting  to  identify  and 
implement  projects  of  common  interest  to  connect  energy  networks,  connect  regions 
currently  isolated  from  European  energy  markets,  strengthen  existing  cross-border 
interconnections,  and help integrate renewable energy. As such, the TEN-E is  a central 

140 / 148 

 
 
 
 
 
 
instrument in the development of an internal energy market and necessary to achieve the 
European Green Deal objectives. 

In December 2020, the Commission presented a legislative proposal to revise the TEN-E 
Regulation7 in order to better support the modernisation of Europe's cross-border energy 
infrastructure and achieve the objectives of the European Green Deal. Europe's progress 
towards a climate neutral economy powered by clean energy requires new infrastructure 
adapted  to  new  technologies.  The  TEN-E  policy  supports  this  transformation  through 
projects  of  common  interest  (PCIs),  which  must  contribute  to  the  achievement  of  the 
EU's  emission  reduction  targets  for  2030  and  climate  neutrality  by  2050.  The  revised 
Regulation  will  continue  to  ensure  that  new  projects  respond  to  market  integration, 
competitiveness and security of supply objectives. 

Among others, the Commission's proposal includes: 

  an  obligation  for  all  projects  to  meet  mandatory  sustainability  criteria  and  to 

follow the ‘do no harm' principle as set out in the Green Deal; 

  an update of the infrastructure categories eligible for support through the TEN-E 

policy, ending support for oil and natural gas infrastructure; 

  a  new  focus  on  hydrogen  infrastructure  including  transport  and  certain  types  of 

electrolysers; 

  new provisions on smart grid investments for integrating clean gases (like biogas 

and renewable hydrogen) into the existing networks; 

  new  provisions  on  support  for  projects  connecting  the  EU  with  third  countries 
(Projects  of  Mutual  Interest  or  PMIs)  that  demonstrate  their  mutual  benefit  and 
contribution  to  the  Union's  overall  energy  and  climate  objectives  in  terms  of 
security of supply and decarbonisation; 

  a  revised  governance  framework  to  enhance  the  infrastructure  planning  process 
and  ensure  it  is  aligned  with  our  climate  goals  and  energy  system  integration 
principles,  through  increased  stakeholder  involvement  throughout  the  process,  a 
reinforced  role  of  the  EU  Agency  for  the  Cooperation  of  Energy  Regulators 
(ACER) and improved oversight by the Commission; 

Projects to reduce methane leakages are excluded from the scope of the TEN-E revisions, 
as they would be unlikely to demonstrate cross-border impact. Methane leakage projects 
consist of retrofits and repairs of different elements of a gas network. They often do not 
involve  capital  investments  but  rather  network  management  and  repair  methods  (more 
related to operational expenses). Such investments are therefore per definition related to 
one country’s network and aim at improving the efficiency of the network operation and 
emission savings but do not aim at increasing cross-border capacity. Therefore, projects   
specifically aiming at methane leakage reductions do not really fit the intervention logic 
of the TEN-E Regulation nor under the concept of projects of common interest of a trans-
European importance. 

6.  EUROPEAN  POLLUTANT  RELEASE  AND  TRANSFER  REGISTER  (E-

PRTR) 

141 / 148 

 
 
 
 
 
The  European  Pollutant  Release  and  Transfer  Register  (E-PRTR)209  is  a  Europe-wide 
register that provides key environmental data from industrial facilities in European Union 
Member States and in Iceland, Liechtenstein, Norway, Serbia and Switzerland. 

The register contains information on releases of pollutants to air, water and land, as well 
as  off-site  transfers  of  pollutants  present  in  waste-water  and  waste  as  reported  by 
industrial facilities to their national authorities. The register covers 91 pollutants as listed 
in Annex II of Regulation (EC) No 166/2006, including greenhouse gases, heavy metals, 
pesticides, and chlorinated organic substances. Releases are required to be reported when 
they  exceed  a  certain  threshold  and  originate  from  one  of  the  65  activities210.  The 
majority  of  these  activities  are  also  regulated  under  the  IED  and  include  facilities  in 
energy production. 

Methane emission reporting is included for those facilities. With its focus on individual 
industrial facilities above a certain size threshold, the E-PRTR is not comprehensive for 
the energy sector, and this initiative covers those parts of the fossil energy supply chain 
not included in it. 

209 Established by Regulation (EC) No 166/2006 on the establishment of a European Pollutant Release and 
Transfer Register 
210 Listed in Annex I of Regulation (EC) No 166/2006 

142 / 148 

 
 
 
 
 
                                                           
ANNEX 7: METHANE EMISSIONS DATA FROM GREENHOUSE GAS INVENTORIES 

Table A.7.1. Methane emissions for the energy sector in Kt, disaggregated by emission category source, as reported to UNFCC in April 2021 by EEA on behalf of the EU 
https://unfccc.int/ghg-inventories-annex-i-parties/2021 

 Category 

Sub-category (i) 

Sub-category (ii) 

Sub-category 
(iii) 

1990 

1995 

2000 

2005 

2010 

2015 

2016 

2017 

2018 

2019 

Incomplete fuel 
combustion 

Energy Industries 

Public electricity and 
heat production 

Petroleum refining 

Manufacture of solid 
fuels and other energy 
industries 

Of which chemicals 

Of which other, incl. 
plastics 

Manufacturing 
industries and 
construction 

Transport 

Commercial/instit-
utional 

Residential 

Agriculture/ 
forestry/fishing 

Other 

1299 

1108 

947 

932 

1059 

972 

979 

998 

984 

974 

49 

28 

4 

17 

63 

41 

4 

18 

71 

50 

4 

17 

89 

72 

4 

13 

125 

154 

159 

162 

167 

173 

105 

135 

140 

142 

145 

150 

4 

16 

3 

16 

3 

16 

3 

17 

3 

19 

3 

20 

52 

57 

69 

90 

76 

80 

78 

86 

91 

93 

6 

18 

271 

77 

796 

42 

12 

8 

20 

215 

34 

688 

49 

11 

25 

160 

30 

576 

40 

15 

37 

113 

29 

566 

42 

10 

31 

74 

37 

659 

86 

13 

26 

55 

27 

574 

80 

12 

27 

54 

28 

578 

80 

15 

28 

54 

29 

580 

85 

17 

29 

53 

31 

557 

85 

18 

29 

54 

30 

536 

88 

2 

1 

3 

2 

2 

2 

2 

0 

0 

Direct emissions  

6553 

5425 

4183 

3501 

2833 

2505 

2387 

2367 

2260 

2069 

 
 
 
  
 
 
 
 
 
  
 
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 Category 

Sub-category (i) 

Sub-category (ii) 

Sub-category 
(iii) 

1990 

1995 

2000 

2005 

2010 

2015 

2016 

2017 

2018 

2019 

 Solid fuels 

3900 

3115 

2608 

2031 

1534 

1382 

1273 

1255 

1170 

1002 

Underground coal 
mining 

3607 

2855 

2373 

1792 

1308 

1168 

1081 

1050 

975 

828 

Mining 
activities 

Post-mining 
activities 

Abandoned 
underground 
mines 

Mining 
activities 

Post-mining 
activities 

Surface coal mining 

Solid fuel 
transformation & other 

2858 

2075 

1492 

1079 

820 

753 

678 

658 

594 

460 

506 

391 

275 

232 

177 

149 

138 

126 

120 

113 

243 

389 

606 

481 

311 

266 

265 

266 

261 

255 

277 

263 

14 

16 

247 

235 

12 

13 

224 

213 

11 

11 

227 

216 

11 

12 

216 

205 

11 

10 

205 

194 

11 

9 

184 

174 

10 

8 

197 

186 

11 

8 

187 

177 

10 

8 

166 

157 

9 

8 

Oil and natural gas  

2653 

2310 

1575 

1470 

1299 

1123 

1114 

1112 

1090 

1067 

 Oil 

272 

243 

 Exploration 

20 

18 

71 

3 

65 

2 

53 

2 

48 

2 

44 

2 

44 

2 

45 

2 

44 

2 

Production and 
Upgrading 

225 

203 

44 

43 

34 

32 

29 

29 

30 

29 

Transport 

7 

7 

Refining / 
Storage 

20 

15 

10 

14 

9 

6 

13 

11 

5 

9 

 Natural gas 

2077 

1786 

1281 

1195 

1061 

894 

Exploration 

4 

3 

1 

1 

1 

1 

9 

9 

9 

890 

2 

888 

2 

861 

2 

4 

9 

847 

2 

144 / 148 

 
 
 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
 
  
 
 
  
 
 
 
  
 
 
  
 
 
 
 
 
  
 
 
  
 
 
  
 
 Category 

Sub-category (i) 

Sub-category (ii) 

Sub-category 
(iii) 
Gas production 

408 

1990 

1995 

2000 

2005 

2010 

2015 

2016 

2017 

2018 

2019 

287 

56 

256 

75 

29 

63 

24 

53 

21 

46 

19 

42 

18 

43 

17 

40 

17 

39 

16 

248 

258 

250 

206 

209 

205 

196 

191 

Gas processing 

55 

Gas 
transmission 
and storage 

269 

Venting 

 Flaring 

 Other 

Gas distribution 

1079 

1020 

Other 

Oil 

Gas 

Combined 

Oil  

Gas 

Combined 

262 

242 

121 

65 

56 

50 

39 

6 

5 

12 

0 

164 

216 

108 

52 

56 

53 

40 

8 

5 

12 

1 

804 

124 

143 

81 

42 

20 

66 

53 

9 

4 

14 

4 

721 

128 

122 

75 

32 

15 

70 

59 

8 

3 

16 

11 

634 

102 

109 

60 

34 

15 

58 

48 

8 

2 

18 

23 

535 

530 

530 

516 

510 

87 

91 

56 

23 

12 

68 

60 

7 

1 

22 

61 

89 

84 

53 

20 

11 

72 

64 

7 

1 

24 

66 

91 

85 

56 

18 

11 

71 

63 

7 

1 

24 

70 

90 

85 

59 

18 

8 

73 

65 

7 

1 

26 

72 

89 

80 

57 

15 

8 

71 

61 

9 

1 

25 

75 

7848 

6534 

5131 

4439 

3912 

3534 

3433 

3437 

3316 

3116 

Biogas plants 

TOTAL (Energy) 

Figure A.7.1. Methane emissions for the energy sector in Kt, per Member States, as reported to UNFCC in April 2021 for 2019  

145 / 148 

 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GHG inventory 2019 data (2021 submission to UNFCCC)
CH4 fugitive emission from energy

800

700

600

500

t
k
4
H
C

400

300

200

100

0

Other emissions(1.B.2.d)

Venting and Flaring (1.B.2.c)

Natural gas (1.B.2.b)

Oil (1.B.2.a)

Solid fuels (1.B.1)

146 / 148 

 
 
 
 
 
ANNEX 8: DISCARDED OPTION 

Option covering biogas/biomethane 

inventory  data  suggest 

Though  national 
that  direct  methane  emissions  from 
biogas/biomethane  are  small  –  only  1.9%  of  EU  energy-related  methane  emissions  – 
there  have  been  demands  from  stakeholders  to  include  biogas/biomethane  in  these 
proposals, on the basis from some that actual emissions from such plants could amount to 
much more than what this data suggests (which, for most EU Member States, is delivered 
on  the  basis  of  UNFCCC  tier  1  estimations  only).  It  is  therefore  considered  by  many 
stakeholders  that  measuring,  reporting  and  mitigating  of  methane  emissions  from 
biogas/biomethane  plants  should  be  undertaken.  In  responses  to  the  Open  Public 
Consultation,  67%  of  responses  were  supportive  of  EU 
regulation  obliging 
biogas/biomethane producers to reduce their fugitive methane emissions. 

After some consideration however, we came to the conclusion that this would amount to 
double  regulation,  as  the  Renewable  Energy  Directive  (RED)  contains  default  GHG 
savings  values  which  already  include  estimations  of  methane  losses  covering  the  full 
supply  chain  up  to  the  point  of  injection  into  the  distribution  network.  These  default 
values can be used by producers in their reporting of GHG savings of their production to 
demonstrate that they meet RED sustainability requirements.  

We however considered that the RED could be strengthened in a number of ways. Values 
of methane losses should be reviewed and updated with the latest estimations of methane 
losses  occurring  in  biogas/biomethane  plants,  as  the  existing  estimations  were  done  in 
2017. These values should  be set  at  conservative levels  (meaning, at  higher levels  than 
estimations suggest, in line with common practice in the RED for default values, in order 
to incentivise delivery of actual values) and should then be included explicitly in annex 
VI  of  the  RED  alongside  the  other,  global,  default  values.  In  order  to  incentivise 
producers to  conduct  leakage detection, repair  and reporting of actual  measurements of 
methane losses to demonstrate better performance, a methodology for measuring actual 
values tailored to biogas/biomethane plants should also be developed, and could then be 
included via existing provisions to modify annex VI of the Directive. This proposal was 
included in the questionnaire of the OPC and was supported by respondents: 

  68%  of  responses  in  support  of  the  proposal  to  regulate  such  emissions  in  the 
RED  by  explicitly  including  default  values  for  processing  methane  leakages  at 
conservative  levels  to  incentivise  mitigation  and  the  delivery  of  lower  actual 
values. 

  65% of responses in support to develop a methodology to estimate actual values 
of  methane  losses  in  biogas/biomethane  plants,  and  to  be  included  as  part  of 
sustainability compliance in the RED. 

The  technical  work  required  is  already  the  subject  of  an  Administrative  Arrangement 
with the JRC, with the aim to deliver proposals during the course of 2022. 

Note that for methane losses from biomethane or any other renewable gasses occurring 
from  the  point  of  injection  into  the  distribution  network,  these  will  be  fully  within  the 
scope of these proposals as the obligation on transporters or distributors of methane will 
not distinguish between the various sources of methane.