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Impact of EU Methane Import Performance Standard

November 13, 2023 Category: Policy Work Area: Methane

As the European Union (EU) considers the final terms of the Methane Regulation, CATF commissioned Rystad Energy to assess the potential trade, price, and emissions impact of a cross-border Methane Import Performance Standard (MIPS). This report shows that the trade and price implications of a phased-in import standard would be low, while the emissions reductions would be high.

  • Adoption of MIPS could reduce methane emissions associated with oil and gas imports to the EU by at least 1.9 million tons per annum.
  • Price impacts are minimal for natural gas, but could be noticeable for crude oil. However, price impacts for vehicle fuels would be trivial – about a cent per litre of diesel or petrol.
  • Costs to exporters imposted by this policy would average only EUR 0.07/MMBtu for gas and EUR 1.33/barrel for oil.
  • The policy would not present a risk to EU energy security, despite some possible diversion of oil and gas to other markets.

The EU was a co-founder of the Global Methane Pledge in 2021 and pledged to lead the way globally to address methane emission reductions. Implementing a bold EU Methane Regulation with a strong import standard would be one of the EU’s most impactful climate decisions of the decade, offering enormous returns on a small investment.