Three key questions for EU policymakers considering the sustainability of gas

In response to DG Energy’s invitation that the European gas industry investigate the ways it can contribute to the reduction of methane, a powerful climate pollutant, two prominent trade groups issued a new report to inform policy discussions around the 2020 gas package – also touted as the decarbonisation package – ahead of the 32nd Madrid Forum in Spain this week.

At nearly 150 pages, the Gas Infrastructure Europe (GIE) and Marcogaz report is a substantial review of best practices for reducing oil and gas methane emissions. For all of its heft, however, the report does little to spell out any relevant policy recommendations to improve the industry’s overall efficiency, skirting its responsibility to advise the Commission on methane policy when it is such a pressing sustainability question to answer in the Union Methane Strategy before the end of 2019.

The report comes at a critical time for legislators. Climate change is a key voter issue. A green wave swept recent elections, pushing the environment to the top of the EU political agenda. With climate pressures escalating and Europe’s share of responsibility increasing, now is not the time for light-touch policy reforms. We need to fast track mandatory methane targets for all gas sold, traded, transported, distributed and used in the EU’s gas market to effectively minimise environmental impacts.

The global oil and gas industry is responsible for roughly one-third of human-caused methane emissions. According to last week’s IEA Tracking Clean Energy Progress report, the industry is ‘not on track’ to cut methane emissions by 75% by 2030 demonstrated as feasible in the Sustainable Development Scenario. Public policy is central to drive reductions in greenhouse gases. Many cost-effective technologies already exist to fix methane leaks across Europe’s gas supply chain. It is why it is so disappointing to see the gas industry fail to provide specific policy recommendations that would encourage technology take-up.

Some major European oil and gas producers, including BP and Shell, have announced plans to voluntarily reduce methane emissions. Company commitments relating to the European gas supply chain, however, are limited. Considering that in 2017, the EU consumed 47% of globally traded gas, the responsibility and potential to reduce oil and gas methane emissions industrywide by at least 75% by 2030 is massive.

For the 2020 gas package to propel decarbonisation efforts and support the EU in delivering on its Paris climate goals, it is crucial that the EU’s legislators clarify their expectations of the gas industry to reduce emissions (methane and CO2) before 2030. The paradox of EU energy and climate policy is that it expects radical change from the gas industry after 2030, but has effectively no concrete requirements on sustainability. Acknowledging that gas has both a methane and CO2 footprint and requires concrete emission reductions by 2025 is critical for gas to play a role in the EU’s energy mix.

The upcoming Madrid Forum is an ideal time for the Commission to signal it will raise expectations of industry. Following-up on this week’s conversations, industry and policy-makers should build upon this best practices report and ask three critical questions about the future sustainability of gas in the EU’s energy mix:

1. What is the desired ambitious target for emission reductions to achieve climate and environmental (not just health and safety) objectives?
2. What methane regulations and commitments can the industry accommodate to take its share of responsibility to deliver on the Paris Agreement?
3. How can the 2020 gas package be designed and/or reformed to prioritise sustainability by securing that methane emissions associated with all gas sold and traded in the internal market are minimised to near zero by 2025?