The impact of the EU methane strategy on the natural gas market

‘The impact of the EU methane strategy on the natural gas market’ is the second joint webinar organised by the Florence School of Regulation and the Environmental Defense Fund.

The question leading the second online event is how to incentivise the methane emissions reductions from the whole natural gas value chain.

Watch the recording: 

Introduction

The international action on methane emissions features prominently in the EU strategy to reduce methane emissions published on October 14, 2020. Despite the fact that the EU accounts for a small share of global methane emissions, it has a significant leverage as the largest importer of oil and gas to advocate for robust monitoring and mitigation of methane emissions.

In the Strategy EU Commission has prioritised monitoring, reporting and verification of methane emissions, keeping the door open for a possibility to adopt targets or standards, in the absence of significant commitments for the other jurisdictions. A part of the industry already calls for methane-intensity based  production and procurement standards^[1].

The strategy sets as a priority “ensuring that companies apply considerably more accurate measurement and reporting methodologies for methane emissions”, both within and outside the EU. To this objective, the EU Commission is promoting the creation of an international methane emissions observatory with a task to compile and publish a methane-supply index (MSI) demonstrating the emissions arising before natural gas or oil reach the final customer.

Independently from the developments in Europe, this year the Singapore’s biggest buyer of LNG, Pavilion Energy, has asked all LNG sellers to quantify the GHG emissions associated with each LNG cargo produced, transported and imported into Singapore. The environmental considerations led Engie to step back from signing a contract with the US LNG supplier. Energir, the main importer of Quebec also developed its own, corporate performance standard and procurement standard in collaboration with Equitable Origin.

These developments raise many questions, which will be tackled during the joint FSR-EDF webinar:

• Considering that less that 25% of methane emissions in the EU’s gas supply chain occur domestically and 80% of volumes consumed in the EU are sold through long-term contracts with 3^rd country suppliers, is a Methane Supply Index fit for purpose? What should be the starting point and key assumptions around addressing emissions associated with imports?
• Could we expect that in the coming years the natural gas price will reflect environmental footprint?
• How to verify the credibility of GHG intensity declarations submitted by the natural gas importers and how to address likely discrepancies with what is reported in the inventories according to the UNFCCC template?

What level of governance can be most effective in determining the equivalency of regulations adopted in different jurisdictions?

Programme:

Introduction

Poppy Kalesi | EDF

Christopher Jones | FSR

Keynote presentation on methane emissions from natural gas value chain imports in Europe and lessons learned from the Arctic Council’s ACAP Working Group

Stephanie Saunier | Carbon Limits

Keynote presentation on establishing an International Methane Emissions Observatory

Manfredi Caltagirone | UNEP

Panel discussion

Stefano Grassi | European Commission

Jutta Paulus | European Parliament

Nicolás González Casares | European Parliament

Stefan Rolle | Federal Ministry for Economic Affairs and Energy, Germany

Jonathan Stern | Oxford Institute for Energy Studies

Samuel Kotis | Environmental Defense Fund

Toshiyuki Sakamoto |The Institute of Energy Economics, Japan

Georges Tijbosch | MiQ

Conclusions

Poppy Kalesi | EDF

Christopher Jones | FSR

Related sources

Methane Emissions from Natural Gas and LNG Imports: an increasingly urgent issue for the future of gas in Europe

Jonathan Stern,  2020 Oxford Institute for Energy Studies

Have you missed the first webinar?

Addressing methane emissions in the context of energy system integration: what climate value for gas?

Read the highlights