Carrots and Sticks: The EU Methane Regulation and Partnerships

The EU’s Methane Regulation officially entered into force in August 2024, with new rules that will gradually require data transparency and emissions reductions from its trading partners. While these new rules are poised to drive significant emissions reductions in the global energy sector, partner countries may require additional resources and technical assistance to both meet the new obligations and fully capitalize on the benefits of capturing significant quantities of gas. With many key obligations on imported fossil fuels being phased in between 2027 and 2030, the next two years will be a short, but valuable window to develop mutually beneficial partnerships to support trading partners, proactively reduce emissions and meet future milestones, which will require joint efforts to mobilise financing, create new regulations, and develop pathways to market abated gas that would have otherwise been flared, vented or leaked. This discussion will consider the roles that governments, companies, and financial institutions should each play to lay this foundation and ensure both the EU and partner countries reap the benefits of the Methane Regulation.