I. Overview
The European Union Methane Regulation (EUMR), passed in 2024, could be one of the most globally impactful climate policies. It introduces phased methane transparency requirements for all natural gas, crude oil, and coal imported into the EU, ultimately allowing only imports below a specified methane intensity threshold.
MiQ, as a not-for-profit with a mission of addressing methane emissions, strongly supports the EUMR and offers a pragmatic implementation solution through the dual elements of its MRV certification standard and the Certificate Inter-Regional Import System (CIRIS).
CIRIS builds on MiQ’s certification framework to offer a transparent, verifiable, and low-cost compliance solution that supports the EUMR’s emission reduction objectives while minimizing market disruption. CIRIS was trialed in 2024 and has received significant feedback from industry and other stakeholders. CIRIS can also facilitate any future EUMR iterations, such as supply chain emission tracking or tracing requirements, as they develop.
II. EUMR Objectives and Requirements1
The EUMR imposes complex requirements on importers of natural gas or crude oil entering the European Union market. Importers must provide information regarding:
- Producer level information (Annex IX; Article 27) – Compliance deadline: May 2025;
- MRV requirements (Article 28) – Compliance deadline: January 2027;
- Methane intensity (Article 29) – Compliance deadline: August 2028.
The EUMR’s central challenge is that it lacks operational guidance for the MRV and tracking elements of the regulation. A distinguishing element of the EUMR is that it only requires producer-level emissions information – currently, it does not require or call for supply chain emissions information.
III. Challenges to EUMR Implementation
In addition to the EUMR lacking detail as to how importers can comply with its central MRV requirements (including Articles 27, 28, and 29), the gas transmission system, itself, presents challenges. The nature of complex natural gas systems, like that in the United States, makes directly tracing back to the production site, in many cases, very difficult.
Global natural gas and LNG supply chains are complex. Natural gas is physically transported, stored, and shipped in commingled form in integrated infrastructure systems. It is often commercially transacted multiple times – including via exchanges, confidential bilateral contracts and/or virtual trading hubs – before it is imported into the EU. In many cases, an importer cannot trace gas volumes – physically or through contracts – back up the supply chain to the gas origin (or, more likely, origins).
IV. Criteria for EUMR Compliance Solutions
Any gas tracing compliance solution for the EUMR must be pragmatic and workable. It must achieve the emissions reduction goals of the EUMR, while being structured whereby it can be actually implemented.
An EUMR compliance solution should therefore include the following elements:
- Achieve the methane emission reduction goals of the EUMR;
- Map to and comply with the EUMR’s language and requirements;
- Have minimal impacts on European LNG, gas, or crude prices;
- Have no effect on European energy security;
- Have no effect on current crude, natural gas and LNG trading practices (i.e., how gas is bought and sold).
- The compliance solution must be transparent, open-source or regulated, and independent of control by operators or technology companies.
V. MiQ Compliance Solution – CIRIS
CIRIS delivers producer MRV information to EU importers.
CIRIS is a system for LNG and crude oil importers to facilitate the transfer of environmental attribute certificates and MRV information between geographic regions. CIRIS is an EUMR compliance solution that is structured on top of MiQ’s operational certification framework; that generates incentives to drive down producer-level emissions; and which results in minimal transaction costs. CIRIS has been updated and extensively reviewed by the industry during the first quarter of 2025 and can be operational today.
To develop a credible and low-cost global tracking system for certified gas and crude, MiQ relied upon best practices from related commodity markets with environmental attributes such as renewable electricity, biogas and sulphur content in heating oil and diesel.
Decoupling a product’s environmental (e.g., renewable energy, sulphur) attributes from the product itself through certification schemes is done in many markets, such as renewable energy or biogas. For example, where a large power consumer such as a data center claims to consume 100 percent renewable power in a complex and connected grid, this is generally possible only if that consumer buys certificates which prove that a correlating amount of renewable power has been produced. Thereby, it is irrelevant whether the consumer is directly connected to renewable power sources.
It will be obvious for most readers that gas or crude systems are equally complex and commingled within certain regions such as the US, EU, or Nigeria, where tracking of molecules is impossible, tracing of contracts or nominations is in its infancy, and where contracts are generally confidential.
Define commingled regions for gas and crude
CIRIS formally groups the commingled or legislatively uniform geographies into regions. These include currently the United States, Canada, UK, Nigeria, and the European Union, amongst others. Upon production of certified gas or crude, the certificates are tagged with the region where the natural gas production facility is located and where the gas was produced.
Trading within a region
Within a region, CIRIS allows both coupled (bundled) or decoupled (unbundled) transactions of methane certificates and the physical gas. Again, this is a similar approach to the renewable electricity markets whereby renewable electricity certificates (RECs) can be traded separately, or together with the electric power (PPA). As of today, many certified gas transactions have been announced publicly inside the US region. Gas buyers are thus incentivizing the production of verified low methane gas.
Exporting to a separate Region: Inter-Regional Mass Balancing
However, to allow the export of low methane certified gas to be imported into another region (e.g. US to EU), CIRIS requires a stringent approach based upon the principles of mass balancing and chain of custody. Gas or crude exports can be tracked internationally at low cost and friction, without interrupting trade patterns between exporting regions such as the US, Nigeria, and importing regions, such as the EU or Japan.
CIRIS requires that the export of methane performance certificates from one certificate region to another can only take place if the transfers are consistent with a set of inter-regional mass balancing rules. These include ensuring there is a correlation between the volume of gas exported and the numbers of certificates, and that certificates with an issuance date prior to six months cannot be used. Physical movement of the LNG also needs to be matched with the certificates to avoid double counting. This is a central condition for export.
A request for moving certificates and correlated volumes of LNG or crude from one region to another must be accompanied by supporting documentation demonstrating proof of transport. This documentation will provide a chain of custody that shows proof of ports of embarkation and arrival. Importers of LNG or crude shipments would provide a Bill of Lading or Import Statement to demonstrate this.
Proof of Custody and the role of the Digital Registry
Upon this proof of chain of custody, MiQ certificates are updated and digitally transferred between the two certificate accounting regions. The certificate region receiving the gas or crude oil – e.g., the European Union – will be credited with a corresponding number of certificates, while the region from which the gas or crude oil was exported – the United States – will be debited accordingly. This process enables the use and subsequent retirement of certificates in the new certificate accounting region. This is managed in MiQ’s digital registry – to track custody and prevent the risk of multiple certificate usage or double counting of attributes.
Future-proofing and Interoperability of Registries
CIRIS has been developed to allow for upgrading as technologies, markets, and policy frameworks develop.
If tracking or tracing systems become more cost-effective and are more widely implemented, the CIRIS system will be updated upon market feedback. It will need to incorporate the extra layer of regional tracking/tracing information before allowing the import of certificates into a different region. Interoperability and API access is embedded today – therefore enabling a thriving ecosystem of various initiatives.
The system will also evolve to handle supply chain emissions or methane/carbon footprint (LCA) methodologies as they become more widely adopted. Other potential methodologies as they appear, such as basin restrictions, can be added separately.
Conclusion:
CIRIS is a system for LNG and crude oil importers to facilitate the transfer of methane and carbon MRV environmental attribute certificates between geographic regions.
CIRIS is a pragmatic EUMR compliance solution that is structured on a proven operational system, that generates incentives to drive down producer-level emissions, and which results in minimal transaction costs. The provision of the environmental attribute data on MiQ certificates will allow EU importers to satisfy EUMR requirements.
Documentation for CIRIS can be found in Chapter 7 of MiQ’s Program Guide (here).
