Oil and gas industry urge EU to pause methane emissions law

By Kate Abnett

BRUSSELS, March 9 (Reuters) - Oil and gas companies urged the European Union on Monday to pause its methane emissions law, warning it could disrupt Europe's fuel imports when tougher provisions kick in next year.

The call from industry comes after the U.S. government demanded the EU exempt U.S. oil and gas from the rules. Brussels has since offered companies more flexible compliance options but declined to roll back the policy, a central pillar of its climate strategy.

An industry-backed study by Wood Mackenzie, published on Monday, said up to 43% of EU gas imports and 87% of EU crude oil imports could struggle to meet the EU rules from 2027, exposing importers to heavy fines and risking supply gaps if producers are deterred from shipping fuel to Europe.

IOGP and fuel manufacturing group FuelsEurope called on Brussels to pause and amend the law.

"The EU cannot afford a self-made regulatory supply shock, even more so in the current geopolitical context," said Francois-Regis Mouton de Lostalot, managing director of IOGP Europe, whose members include ExxonMobil, Chevron, BP and TotalEnergies.

Oil and gas prices have surged this month in response to the U.S. and Israeli war on Iran, adding short-term pressure on governments already navigating Europe's phase-out of Russian energy imports. Most EU oil and gas now comes from Norway and the U.S.

The EU methane law requires that, from January 2027, imported gas must comply with monitoring and verification rules equivalent to Europe's, or meet a voluntary industry standard known as "Oil and Gas Methane Partnership 2.0 level 5". The aforementioned companies are all part of the OGMP initiative.

Climate groups disputed the study's findings. The Environmental Defense Fund said its own analysis indicated that, following methane-reduction commitments by many oil and gas majors, the global volume of OGMP 2.0 level 5-compliant gas in 2027 would be more than double EU demand, including supplies from Norway and the U.S.

A European Commission spokesperson did not immediately respond to a request for comment.