Project description

The “Regulation of the European Parliament and of the Council on methane emissions reduction in the energy sector” was adopted in 2024. As part of Article 27b, it is stated that, three years after the entry into force of the Regulation, the Commission will set a methodology for determining the methane intensity associated with crude oil, natural gas and coal placed on the Union market. Union producers and importers will have to report intensity values determined by following that methodology. By six years after the entry into force of the Regulation, a maximum admissible value for the intensity will be defined, thus excluding production and import of fossil energy with an associated intensity above that threshold. Defining an accurate and actionable methodology for intensity calculations is therefore critical to drive producers within and outside the EU into reducing their methane emissions. Carbon Limits developed two didactic white papers providing a structured approach for determining a methane intensity for oil and gas, and coal respectively, placed on the EU market to inform delegated act discussions. This effort included identifying key questions which will need to be answered to determine the correct methodology, for example, questions on system boundaries, emission allocations, time and frequency aspects, and data availability. For each question, Carbon Limits outlined a clear description of the alternative methodologies and their consequences on the emission intensity calculation, as well as the incentives or bias each option can create. An interactive workshop with CATF to discuss results of this analysis, as well as consultation with additional experts, informed preparation of the final white paper.