MiQ, the independent not-for-profit global leader in methane emissions certification, reflects on the industry associations’ June 11th Joint Statement on the EU Methane Regulation (EUMR) importer requirements.
The EU Methane Regulation presents both complexity and opportunity, and its implementation raises important practical and legal questions for importers, producers, auditors, and authorities. But these challenges should not obscure the Regulation’s core purpose: creating greater transparency on methane emissions, enabling trusted information for importers and governments, and accelerating action to reduce methane emissions globally, all of which are industry goals.
We need pragmatism on ensuring implementation works in practice. This means identifying where further clarity is needed, while at the same time also recognising the independent verification processes and certification pathways that already exist and can support compliance. In publicly supporting certification as a compliance pathway, along with a national book-and-claim framework, the Council and the Commission demonstrated their pragmatic approach to the EUMR.
Most of the issues raised in the industry associations’ Joint Statement should be addressed once the European Commission publishes the envisaged ‘Recommendations on model clauses’, including guiding criteria on acceptable certification schemes. This will allow EU importers to use producer-level methane emission performance certificates as a method to comply.
The claim made in the Joint Statement that ‘the verification element remains a critical bottleneck’ does not fully reflect the services offered already today by globally operating verification organizations, nor the existing certification activities under the MiQ MRV certification scheme:
- MiQ operates a comprehensive MRV standard, including Monitoring and Reporting components and supported by a Verification (Audit) protocol, which enables auditors to verify at a reasonable assurance level. In other words, a verification protocol is not ‘missing’ – it exists and is currently operational.
- MiQ-recognized expert auditors have conducted more than 100 audits based on the MiQ Verification/Audit Protocol. This protocol has EUMR equivalent terms and therefore can be recognised by authorities.
- Around 300 Bcm/a of gas production are certified by expert and MiQ-recognised auditors, and crude production is now being certified.
- Many of these auditors offer their services globally, have experience in oil and gas operations, and can be contracted directly by producers seeking verification. Contracting with an auditor, verifying production operations against the MiQ standard, and becoming certified can take place in less than a year.
- The EUMR does not require the accreditation of auditors in the EU for the verification of emissions performance of non-EU operations. Again, such auditors need to be accredited only at equivalent terms where they operate.
- EU importers can purchase MiQ certificates by clearing on the CBL Xpansiv exchange or transacting bilaterally with producers
Provided that certification is formally recognized as a compliance method, secondary legislation such as the detailed method to calculate methane intensity is not needed to be in place today for EU importers to start reporting that imported volumes have been produced at EUMR equivalent MRV terms. Methane intensity thresholds will only become relevant for contracts concluded as of 2030 and EU importers can expect that certified natural gas and crude oil production meeting such thresholds will be available.
For natural gas and crude oil imports from the US (irrespective of the contracting date and period), EU importers can register with MiQ today and use – subject to final recognition by the relevant authorities – the MiQ CIRIS statements for compliance reporting and to fulfil their EUMR Annex IX requirements. For imports from other regions, importers and producers can contract with auditors to independently verify the producer’s methane performance against the MiQ MRV standard and have MiQ issue certificates. These actions can be taken today.
Is it time for the entire industry to roll up its sleeves and work on a ‘Plan B’?
Engage today on compliance solutions, request verifiers for proposals and test compliance methods with authorities.
The oil and gas sector has a long history of successfully addressing challenges in the most challenging environments on the planet. The EUMR is a hurdle that can be cleared today. Let’s work on that together.
