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Methane intensity of the production of crude oil, natural gas and coal

1. By 5 August 2028 and every year thereafter, for the supply contracts concluded or renewed on or after 4 August 2024, Union producers and, pursuant to Article 27(1), importers shall report to the competent authorities of the Member State in which they are established the methane intensity of the production of crude oil, natural gas and coal placed by them on the Union market calculated in accordance with the methodology set out pursuant to paragraph 4 of this Article. For supply contracts concluded before 4 August 2024, Union producers and, pursuant to Article 27(1), importers shall undertake all reasonable efforts to report to the competent authorities of the Member State in which they are established the methane intensity of the production of crude oil, natural gas and coal placed by them on the Union market calculated in accordance with the methodology set out pursuant to paragraph 4 of this Article. From 5 August 2028, Union producers and importers placing crude oil, natural gas or coal on the Union market shall report annually to the competent authorities of the Member State in which they are established of the results of such efforts.

2. By 5 August 2030 and every year thereafter, Union producers and importers placing crude oil, natural gas and coal on the Union market under supply contracts concluded or renewed after 5 August 2030 shall demonstrate to the competent authorities of the Member State in which they are established that the methane intensity of the production of crude oil, natural gas and coal placed by them on the Union market, calculated in accordance with the methodology set out pursuant to paragraph 4, is below the maximum methane intensity values established in accordance with paragraph 6 to promote the global methane emissions reductions for those products.

3. The competent authorities of the Member States shall protect the confidentiality of the information received from Union producers and importers under this Article, in accordance with Union law. The competent authorities shall provide that information to the Commission, which shall protect the confidentiality of such information, in accordance with Union law.

4. By 5 August 2027, the Commission shall adopt a delegated act in accordance with Article 34 to supplement this Regulation by setting out the methodology for calculating, at the level of the producer, the methane intensity of the production of crude oil, natural gas and coal placed on the Union market. That methodology shall take into account different production processes and site conditions, as well as existing international methodologies and best practice for calculating methane intensity. That methodology shall be non-discriminatory and based on transparent and objective criteria. When preparing such delegated acts, the Commission shall inform the Coordination Group for oil and petroleum products, the Gas Coordination Group, the Electricity Coordination Group and other relevant stakeholders.

5. By 5 August 2029, the Commission shall assess the potential impact of various levels of maximum methane intensity values associated with crude oil, natural gas and coal placed on the Union market at the level of the producer, and present a report to the European Parliament and to the Council. That report shall include an assessment of the potential reduction of global methane emissions, of the impact on the security of energy supply at Union and national level and on the competitiveness of the Union’s economy, and of the potential global and regional market distortions. That report shall also include a market assessment with regard to the methane intensity of current and future supplies to the Union until 2049 through both long-term contracts and spot purchases. That assessment shall analyse the situation per Member State, taking into account contractual commitments entered into before 4 August 2024, energy infrastructure capacities and potential constraints.

6. On the basis of the assessment referred to in paragraph 5 and on objective criteria, the Commission shall adopt delegated acts in accordance with Article 34 to supplement this Regulation by setting out the maximum methane intensity values associated with crude oil, natural gas and coal placed on the Union market at the level of the producer. Those delegated acts shall be consistent with the methodology for calculating the methane intensity of the production of crude oil, natural gas and coal placed on the Union market set out in accordance with this Article. Those delegated acts shall also specify different methane intensity classes for crude oil, natural gas and coal. Those maximum methane intensity values shall be determined separately for crude oil, natural gas and coal, covering the best performing class or classes. Those maximum methane intensity values and methane intensity classes shall take into account the different sources, production processes and site conditions and shall be set at levels that promote reductions of the global methane emissions in relation to the crude oil, natural gas and coal placed on the Union market, while preserving the security of energy supply at Union and national level, ensuring a balanced distribution of the volumes of crude oil, natural gas and coal placed on the Union market as well as non-discriminatory treatment, and protecting the competitiveness of the Union’s economy.