The European Union (EU) is leading the way in tackling global methane emissions through its Methane Emissions Regulation (MER). Entering into force in August 2024, the policy’s first implementation milestones are due this year (2025). Through the rigorous implementation of MER, the EU can set a global standard for methane monitoring, reporting and verification (MRV), and drive harmonization, transparency — and ultimately real-world emissions reductions –—across the global oil and gas markets.
MER will eventually create a methane performance or intensity standard for the EU’s oil, gas, and coal. The standard will apply to both domestically sourced and imported fuels. The regulation does not prescribe a particular mechanism for providing evidence of compliance. This evidence must include demonstrating the origin, transportation pathway, and other environmental attributes of imported oil and gas. The burden of providing evidence rests with industry and other stakeholders and Member States and Competent Authorities will determine whether the evidence provided, and mechanisms used, are sufficient.
This report focuses on this initial challenge: determining the origin of the imported fuels, specifically of imported gas. Subsequent pieces of analysis will address other key implementation questions.
The MER’s requirements are phased in over time with increasing reporting requirements focused on the production segment. The table below highlights the milestones applied to gas.
| Compliance Date | Requirement |
|---|---|
| May 5, 2025 | Report to Competent Authorities the location of producer, route of gas, and any monitoring, reporting and verification (MRV) and abatement at production site of imported oil and gas. |
| January 1, 2027 | Demonstrate and report to Competent Authorities that all oil and gas imported (deliveries as of 2027) under contracts since August 2024 is subject to MRV equivalent to that required of domestic operations (MRV standards set forth in Article 12 or OGMP 2.0 L5). |
| August 5, 2028 | Report to Competent Authorities the production segment methane intensity of oil and gas imported (deliveries as of 2028) under contracts executed since August 2024 (with the methane intensity calculation methodology to be determined by the European Commission by August 2027). |
| August 5, 2030 | Report to Competent Authorities that the production segment methane intensity of oil and gas imported under contracts executed from August 2030 is below the maximum threshold set by the Commission (with the methane intensity threshold to be set by August 2029). |
Each of these requirements falls on importers to gather and report information about production segment characteristics of imported gas that, currently, is not routinely communicated across supply chains.
This report reviews the challenge and the proposed solutions to address attributing methane emissions across complex gas supply chains before offering an intermediate, hybrid solution. The hybrid approach aims to balance accuracy and environmental integrity with practicality and minimization of cost, disruption to existing market function, and the need for extraterritorial regulation. While this piece focuses on the natural gas supply chain, similar principles and solutions should apply to crude oil as well.