KEY POINTS
- U.S. LNG producers say their fragmented supply chain makes emissions tracking across shipments difficult.
- The European Commission may adjust methane rules to help U.S. LNG exporters comply with EU requirements.
- Trump’s rollback of methane regulations could complicate efforts to recognize U.S. rules as equivalent.
The European Union is looking at ways to make it easier for U.S. gas exports to comply with its methane rules. Three sources familiar with the matter told Reuters the bloc is trying to avoid a trade war with Donald Trump.
The European Commission is preparing a trade offer to help avoid Trump’s proposed tariffs on European Union products. Both the European Union and the United States have indicated that energy may form part of a broader trade deal.
Trump has repeatedly said the EU should buy more American oil and gas to lower its trade surplus.
European Commission President Ursula von der Leyen said the bloc could increase U.S. LNG purchases in the coming years.
The EU aims to stop importing Russian gas entirely by the year 2027, replacing it with other sources. As part of energy-related options under discussion, the EU may use flexibility in applying its methane emissions rules.
These changes could help U.S. LNG exporters comply with EU law and continue delivering gas to the European market. The sources said technical tweaks may let U.S. companies meet “equivalent” standards and automatically qualify under EU rules.
They did not say how this equivalence could be implemented or measured in practical regulatory terms.
U.S. policy changes could hinder methane law compromise
The plan may be complicated by Trump’s proposal to eliminate methane reporting rules for American gas producers. If reporting rules are scrapped, the EU may struggle to justify granting U.S. exporters automatic compliance under its laws.
According to Reuters, an European Commission spokesperson declined to confirm if methane flexibility is being considered to benefit American LNG exporters. “The Commission has an ongoing dialogue with industry on all relevant matters related to our legislation,” the spokesperson said.
Methane is the second-largest contributor to climate change, behind carbon dioxide, and is more potent over short timescales. From this year, EU law requires oil and gas importers to track and report their associated methane emissions
LNG exporters face compliance hurdles from fragmented U.S. gas supply
The EU methane law could favour U.S. LNG over supplies from countries with higher methane intensity, like Algeria and Russia.
However, American exporters say their industry structure prevents them from meeting EU standards along the full supply chain. Each LNG shipment may include gas from different fields, making it difficult to track exact methane emissions per load.
By 2027, the EU will require all new gas contracts to meet methane rules equal to its standards. The European Commission recently held an online meeting with U.S. LNG exporters to discuss industry concerns about the new law.
The United States became the EU’s largest LNG supplier after Russia’s invasion of Ukraine disrupted long-term energy flows in 2022. In 2023, U.S. LNG accounted for 45 percent of the EU’s LNG imports and 16.5 percent of all gas imports.
