Market Chatter: EU Considers Exemptions to Methane Emission Penalties for Oil and Gas Firms
The European Commission has reportedly drafted plans to allow oil and gas companies to avoid penalties for breaching the EU's methane emissions laws, according to a draft document seen by Reuters.This move comes following pressure from industry as well as the US government, which wanted American oil and gas companies exempted from the rules.According to the draft document, countries within the bloc will have discretion over application of penalties for breaching the rules, during an energy supply crisis, such as the current global one."Sanctioning should be delayed until the situation is stable and resumed if the infringement persists and the risk to the security of supply is no longer present," the document said.The document also reportedly gives governments discretion to waive sanctions even outside formal crisis periods if enforcement is deemed harmful to energy security.According to the EU's methane law, starting 2027, even imported gas will be subject to verification and compliance with EU's rules, with penalties for non-compliance reaching as high as 20% of a company's annual turnover.The rule was contested by the US, the bloc's biggest supplier of liquified natural gas and an increasingly important energy partner in the wake of Russia's invasion of Ukraine.The European Commission did not immediately respond to' request for a comment on this story.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)