Guyana is among a group of energy-exporting countries that have raised concerns about the European Union’s methane regulations, according to an S&P Global report published on July 22.
The report cited the US Department of Energy (DOE), which said Guyana, alongside exporters including Algeria, Qatar and Nigeria, has expressed concerns that the regulations could create uncertainty for suppliers and disrupt energy trade.
The EU’s methane regulation requires importers of natural gas, crude oil and coal to report methane emissions associated with imported energy. The bloc is also developing methane emissions-intensity standards that exporters will eventually be required to meet.
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On July 20, the European Commission issued non-binding recommendations encouraging member states to suspend penalties on new import contracts for three years, until 2030, to give suppliers additional time to comply.
S&P Global explained that the “new import contracts were meant to face penalties starting in 2027, but the July 20 guidance called for member states to suspend penalties for three years to give market participants time to adjust to the requirements and avoid supply disruptions”.
However, the U.S. DOE reiterated its call for the EU to delay implementation and introduce targeted changes to provide greater certainty for energy exporters and importers.
“Delaying penalties does not solve the underlying compliance problems or provide a clear and predictable framework for effective implementation of the European methane regulations,” a DOE spokesperson is cited as saying on July 22 by S&P Global.
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According to S&P Global, nearly 20 EU member states, members of the European Parliament and several major energy-exporting countries have questioned whether the rules could increase costs, disrupt supplies and undermine energy security.
The issue is relevant to Guyana because Europe is an established market for the country’s crude oil. Earlier this year, Guyana’s Liza crude was selected for inclusion in Platts’ revised European Sour Crude Index (ESCI), strengthening its role in the European market.
Looking ahead, the regulations could also become relevant for future natural gas exports as Guyana develops its gas resources. At present, however, Guyana’s crude is produced with a relatively low greenhouse gas intensity compared with many global producers, meaning the long-term impact will largely depend on how the EU defines its methane emissions-intensity limits.
