Energy LEAP is pleased to present its latest publication: an EU Methane Regulation Contract Clause and Annex IX Template.

Introduction

The European Union adopted a new regulation on methane emissions reduction in the energy sector 27 May 2024. The EU Methane Regulation (‘EUMER’) entered into force 4th August 2024.

EUMER requires the fossil gas, oil, and coal industry in Europe to measure, monitor, report, and verify their methane emissions. EUMER aims to reduce methane emissions from fossil fuels imported into the EU and gradually impose more stringent requirements to ensure that third-country producers progressively adopt equivalent monitoring, reporting, and verification obligations as EU operators.

A cross-industry group was formed within Energy LEAP to develop contractual clauses that address compliance with EUMER.

Publication

At this time, the group is publishing a model clause focusing on Article 27 and continues to study potential Article 28 and 29 clauses. The purpose of the clause is to assist market participants with standardization of contracting language for obtaining Annex IX data from producers to aid in compliance with Article 27 of EUMER.

The clause can be used for Crude, LNG or Natural Gas contracts where the molecules are (or might be) ultimately imported into the EU from non-EU origin. The clause assists market participants by standardizing contracting language for obtaining Annex IX data from producers (and seller counterparties) to be timely reported with the applicable National Competent Authority. The EU Methane Regulation clause is available to download here.

The group has also developed a consolidated Annex IX template with the purpose of streamlining Annex IX information exchange between parties. The EU Methane Annex IX template is available to download here.

The working group will continue to monitor and adjust the wording, as necessary, in light of any additional information which arises, and welcomes any feedback encountered in the use of these clauses. Should you wish to provide input to this ongoing work, you can utilize the Energy LEAP contact form as found here.