Gas: new EU regulations put supplies at risk

The EU regulation on reducing methane emissions in the energy sector and its penalty provisions are putting the security of Italy’s gas supply at risk. The debate amongst industry experts is ongoing, and concerns are naturally greater for a country like ours, where gas imports play a significant role.

EU Regulation 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector (natural gas, oil and coal) and amending the previous Regulation which entered into force on 4 August 2024, lays down rules for measuring, quantifying, monitoring, report and verify accurately methane emissions in the Union’s energy sector, as well as for reducing them, including through periodic leak detection and repair surveys, repair obligations, and limits on venting and flaring (venting and flaring practices, respectively).

Who does the regulation impose obligations on? First and foremost, the EU energy sector and, consequently, the operators managing its various areas: the exploration and production of oil and fossil gas; inactive wells; the transmission and distribution of natural gas; underground storage and operations at regasification terminals and LNG facilities. Importers, too, in relation to energy placed on the EU market (imports from non-EU countries), must limit their carbon footprint in fossil fuel-exporting countries.

It should also be noted that the implementation of the Regulation requires a transposition into the existing regulatory framework for the appointment of Competent Authorities, responsible for overseeing the application of the Regulation itself and carrying out inspections, as well as the definition of the rules on penalties – which may amount to up to 20% of the previous year’s annual turnover – to ensure the application of the obligations introduced, which involve not only operators of infrastructure located within the European Union but also importers. Entities required to import from producers who certify their compliance with the provisions of the Regulation for the production of oil, natural gas and coal.

This last point is particularly critical: given that the majority of methane emissions linked to energy consumption in the EU actually occur outside the Union’s territory, the Regulation imposes various obligations on importers. These include periodic reports covering the measurement, reporting, verification and mitigation of methane emissions; and demonstrating that, for certain contracts, the methane intensity must be below the maximum values to be set by the European Commission.