The EU Methane Regulation has the potential to revolutionize the global energy market, but what would it actually do?

Here’s how the regulation boosts European competitiveness, energy security, and cuts pollution.

What is the EU Methane Regulation?

Global energy markets currently lack quality data on the origins and emissions of fossil fuels, making it difficult for buyers to differentiate between high-emitting and low-emitting energy producers.

The EU Methane Regulation addresses this market failure by harnessing the EU’s considerable buying power to require producers to report this data, thereby creating greater market transparency.

The reporting system will be built gradually over several phases to ensure data credibility, and, over time, incentivize producers to reduce their methane emissions intensity – translating climate performance into commercial value.

Myth: The EU Methane Regulation will cause energy prices to skyrocket.

Fact: The EU Methane Regulation will have a minimal impact on oil and gas prices for EU consumers.

There will be minimal impact on oil and gas prices for EU consumers as new costs (blue line) are low and can be absorbed into profit margins.

Higher costs for exporters usually don’t translate into higher costs for importers and consumers, because most exporters are ”price takers” and not “price makers.”

Exaggerated price impact predictions are a result of artificially modeled scarcity from trade bans that don’t exist. Geopolitical volatility and similar risks will remain the dominant drivers of short-term price shocks.

Incremental costs to gas exporters to the EU resulting from the implementation of the methane import standard

Source: CATF and Rystad Energy. “ Impact of an EU methane import performance standard: Impact Assessment Report.” 2023.

Myth: The EU Methane Regulation threatens energy security.

Fact: With the EU Methane Regulation, no supplies are cut off and gas markets are headed towards over supply.

The Methane Regulation doesn’t restrict fuels from entering the EU – it imposes proportionate penalties. The market is transitioning towards a less volatile phase as new LNG supply continues to be available. LNG supply will outpace demand growth in the late 2020s and early 2030s. Supply additions can reduce baseline market tightness over time, putting downward pressure on prices, but it does not eliminate volatility: geopolitical disruptions and related risks continue to dominate short-term pricing even when capacity is expanding.

Global liquefaction capacity by regions and by production start year

Global LNG demand and production by life cycle (billion cubic meter)

Source: Rystad Energy research and analysis, Global Gas & LNG Market Analysis Dashboard. Prepared for CATF in 2025.

Myth: The EU Methane Regulation harms industry.

Fact: The EU Methane Regulation makes industry more competitive and levels the playing field.

As markets are over-supplied and increasingly flexible, methane performance data makes makes low-emitting producers more competitive.

As prices converge around the world, environmental performance will become a critical factor that puts them first in line on premium markets.

The rules require producers abroad to meet the same standards in the EU, leveling the playing field around the world.

Source: Rystad Energy research and analysis, Global Gas & LNG Market Analysis Dashboard. Prepared for CATF in 2025.

Myth: The EU Methane Regulation will push exporters away from Europe.

Fact: Exporters won’t walk away from customers paying some of the highest prices.

We’re increasingly headed towards a buyers’ market where exporters compete for premium markets. Given low intensities and lack of efficient alternatives, few suppliers would pay higher costs to re-route export cargoes.

Trade flow analysis of top crude exporters to the EU

Trade flow analysis of top gas exporters to the EU

Source: CATF and Rystad Energy. “Impact of an EU methane import performance standard: Impact Assessment Report.” 2023.

Resources

The Impact of EU Methane Import Performance Standard

This report shows that a phased methane import performance standard could be implemented as early as 2027, and would reduce emissions associated with oil and gas imports by at least 1.9 million tons per year. The report shows that the standard would have minimal price impacts for natural gas, and not pose any risk to EU energy security.

Read report

Media Memo: The EU Methane Regulation in the Context of Energy Security and Competitiveness

This note provides context for journalists reviewing claims that the EU Methane Regulation could significantly disrupt energy supply or competitiveness. A growing body of analysis indicates that many of these concerns rely on assumptions that do not reflect how the regulation is structured or how energy markets function in practice. Evidence instead shows the regulation improves transparency and performance while supporting Europe’s vital decarbonisation pathway and maintaining stable supply incentives in addition to pursuing the already ongoing buildout of renewable energy.

Read the Memo

Proposed Certification Criteria for Implementation of the EU Methane Emissions Regulation

As implementation of the EU Methane Regulation begins, strong certification criteria ensures competent authorities can prevent misreporting and ensure the Regulation achieves its climate and market objectives. In this brief, CATF provides a set of criteria that can be used to evaluate whether the environmental attributes reported by importers meet the EU Methane Regulation requirements and are grounded in credible evidence.

Read the Brief

Methane Intensity for Oil and Gas Production

This report reviews the various formulae that have been used to calculate methane emissions intensity, with extensive discussion of the advantages and disadvantages of the various approaches.