Spain Wants EU to Keep Methane Goals in Search for LNG Supplies

(Bloomberg) -- Spain wants the European Union to uphold its ambition to cut methane emissions in the energy sector as it seeks to import more liquefied natural gas from different producers, the country’s top energy official said.

As Europe is trying to curb reliance on Russian fuels, some nations have been calling for a reduction of technical burdens that may hinder the prospects of more purchases of LNG from third countries. EU law requires importers of gas to report methane emissions starting this year, and from 2027 new contracts will be allowed only if their standards are at least equivalent to the bloc’s own rules in order to limit emissions within supply chains.

Softening the goals in the methane regulation isn’t an option for Spain’s Deputy Prime Minister Sara Aagesen, who’s in charge of the country’s energy policy. LNG generates the potent greenhouse gas in both production and shipment. 

“We need to contain methane emissions, that’s fundamental,” Aagesen said in an interview in Madrid. “It’s a long-term endeavor, both scientific and technical, and I believe it should be upheld.”

The EU is working on a plan to phase out Russian fossil fuels that’s due to be released on May 6. The publication was delayed as the bloc analyzes various legal tools and as it assesses the impact of the shift in the US administration’s view on Ukraine, Bloomberg News reported in March. The road map will signal to companies that they should increase supply from the US, European Council President Antonio Costa has said.

To alleviate concerns of some governments and some American companies about compliance with the EU rules and to avoid changes to the methane regulation, the European Commission could use the so-called implementing acts to offer some flexibility. Such instruments follow the main law and set out detailed rules on how to turn EU laws into practice.

Aagesen said Spain is able to import LNG from several markets and shouldn’t rely exclusively on the US if the EU weans off the Russian fuel.

“Spain is lucky enough to have many regasification facilities so its ability to diversify is maximized,” she said. LNG may come by ship from many countries, including some in the Middle East, Aagesen said. What remains to be seen is “how companies adapt to such diversification.”

Spain, which has seven LNG terminals on its coastline, is Europe’s second-largest importer of Russian gas. It accounted for 13% of Spanish demand in the first quarter, according to gas network operator Enagas SA. That’s only behind suppliers Algeria and the US, which each accounted for a 32% share.

Plans to diversify away from Russian fuels may have an impact on firms such as Naturgy Energy Group SA, Spain’s largest natural gas company, which has long-term import contracts with Russia.

“We expect a juridically robust proposal from” EU Energy Commissioner Dan Jorgensen, Aagesen said. There are tools to protect both businesses and consumers while reaching the goal of slashing Russian income, she said. “Europe must act as one, single states shouldn’t go on taking unilateral measures.”

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