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EU methane regulation threatens energy security

Financial Times Companies •
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The EU's methane regulation faces mounting criticism for potentially triggering another energy crisis. Industry warnings suggest the rules could drive up costs and create uncertainty just as Europe recovers from previous shocks. The regulation imposes extraterritorial requirements on importers that may restrict supply options and increase prices for households and industries already struggling with high energy costs.

European Commission has floated "flexibilities" to address supply security concerns, but the ambassador argues minor adjustments won't fix fundamental flaws. The regulation threatens penalties of up to 20% of global revenues, creating legal risks suppliers cannot accept. This approach contrasts with US policies that successfully reduced methane emissions while increasing production through innovation and market-based solutions.

The regulation's uncertainty discourages long-term contracts, potentially reducing incentives for producers to prioritize the European market. Global suppliers may redirect supplies to markets with more favorable regulatory environments. The US-EU energy partnership thrives when incentives align, not when "one-size-fits-all" requirements punish reliability and threaten energy security.