EU mulls easing methane rules for US LNG

The European Union could take action to make it simpler for US LNG imports to meet the bloc’s methane emissions requirements, sources familiar with the matter told Reuters.

Amid US President Donald Trump’s attempts to restructure global trade, Brussels is in the midst of preparing an offer for trade talks with Washington, and the two sides have both indicated that energy could be a focus point.

Trump has repeatedly stated that Europe should be buying more LNG from the US as he embraces a pro-fossil fuels era. Meanwhile, Brussels for its part, has indicated it is open to buying more US LNG with European Commission President Ursula von der Leyen stating in November that Europe should consider purchasing more LNG from the US.

However, the EU’s strict methane emissions rules could complicate plans by Europe to increase imports of US LNG.

In the past, LNG deals between the two partners have fallen apart over failure of US suppliers to meet green credentials. For instance, in 2020 French utility Engie cancelled a deal with NextDecade over concerns around the emissions profile of LNG from its Rio Grande facility in Texas.

Consequently, according to Reuters’ sources, the European Commission is now examining regulatory flexibilities in order to aid US LNG exporters, yet not water down existing legislation.

One way of doing so could be the introduction of technical rules, which would enable US suppliers to be judged to be following “equivalent” methane rules as the EU’s.

Former President Joe Biden attempted to do this before leaving office seeking alignment of EU and US methane rules.

However, this could prove easier said than done, as President Trump has reiterated his plans to rollback Environment Protection Agency (EPA) legislation.

Beginning this year, Brussels requires exporters of oil and gas to Europe to meet compliance standards, which include both monitoring and reporting the associated methane emissions.

And starting in 2027, the bloc’s legislation will make compliance with methane rules equivalent to the EU’s a requirement for international suppliers before they can sign contracts with European purchasers.