Background
The European Green Deal emphasizes the importance of gas in the energy transition. However, for gas to play a sustainable role, the gas value chain must prioritize reducing methane emissions. Methane emissions are a significant contributor to global warming, second only to carbon dioxide emissions, accounting for around a quarter of current global warming.
When addressing methane emissions from the energy sector, it’s essential to note that the EU bears only a small direct responsibility, accounting for just 2.3% of global methane emissions. In contrast, countries like the Russian Federation and the United States contribute significantly more, with 15% and 14% of global emissions, respectively. However, as the largest buyer of natural gas internationally, with a 46% share, the EU holds considerable leverage to encourage countries from which it imports gas (such as the Russian Federation, Algeria, Nigeria, Qatar, and the United States) to adopt methane emission reduction strategies and standards.
One potential approach to incentivize gas network companies to reduce methane emissions is by incorporating these emissions into the EU Emission Trading System (EU ETS), which has been operational since 2005.