US methane deadline squeezes EU gas

The US ambassador to the EU, Andrew Puzder, has warned Brussels that American oil and gas deliveries to Europe could stop on 1 January 2027 unless the bloc weakens its methane emissions regulation. Europe’s gas storage is at roughly 36% of capacity, the lowest level for this point in the year since 2018 (Columbia CGEP, Bloomberg). US LNG, meaning liquefied natural gas cooled for transport by tanker, has quadrupled since 2021 and now makes up nearly 57% of EU LNG imports (IEEFA, Euronews).

That is how a technical climate rule becomes a winter energy risk. For Malta, as for every small member state, the point is not whether the gas lands at Marsaxlokk or in northern Europe. EU energy prices move through the single market, through supply contracts, and eventually through bills paid by households and businesses.

What the law requires

The regulation in question, 2024/1787, is the world’s first law requiring gas importers to prove how much methane leaked during production. It does not send EU inspectors to Texas. The legal burden sits with the European buyer.

From January 2027, any importer signing a new contract must show that its supplier monitors and reports methane emissions to a standard matching the EU’s own rules (Oxford Institute for Energy Studies). If the importer cannot produce the data, it faces fines of up to 20% of annual turnover. In practice, European trading companies would avoid suppliers that cannot provide the paperwork.

The EU imports about 90% of its gas, so regulating only producers inside the bloc would leave most emissions untouched. The problem is scale: only 7% of global oil and gas production currently meets the monitoring standard being demanded (OIES).

Who gets hurt first

The exposure is not spread evenly across Europe. Germany gets more than 90% of its LNG from the US; Poland gets more than 75% (OSW). The Netherlands, after closing the Groningen gas field in 2023 because of earthquake damage, now imports 75–80% of its gas and had storage at just 12% in mid-May. These three countries would feel any disruption in US shipments quickly.

Italy’s exposure is different. It already pays the EU’s highest wholesale electricity price, 130.5 €/MWh in early 2026, three times Spain’s rate (EUNews). Its power system relies heavily on gas-fired plants, and in electricity markets the most expensive fuel needed to meet demand sets the price for everyone. Gas sets that price in 89% of Italian trading hours. If flexible US cargoes are diverted elsewhere, Italian power bills are first in line.

The bluff, and the real danger

Puzder’s warning is designed to land hard, but the US government cannot legally order private companies to break long-term take-or-pay contracts, where the buyer pays whether or not it takes delivery. More than 90% of output from Cheniere, America’s largest LNG exporter, is locked into such deals (Congressional Research Service, CSIS). The $750 billion EU energy-purchase commitment behind the threat is not legally binding either (LSE).

The real pressure point is the spot market, the 10–15% of cargoes sold without long-term contracts. Asian buyers already pay $1–3 per million BTU more than European buyers (Global LNG Hub). That price gap is enough to pull flexible shipments east, with or without a formal instruction from Washington.

The gap Washington does not mention

Washington says the reporting requirements are “unworkable”, and there is a genuine practical issue. US gas pipelines mix output from thousands of independent producers, making it difficult to trace emissions to a single source.

But satellite data from MethaneSAT shows US oil and gas methane emissions are over four times higher than what industry reports to the EPA (MethaneSAT). The Trump administration is also dismantling domestic methane reporting requirements (EPA), while 24 industry associations lobby Brussels to weaken the import rules (DeSmog).

Norway shows the alternative. It has the strictest methane regulation of any producer country, the lowest emissions intensity, and remains Europe’s largest pipeline gas supplier (IEA).

The Commission is now looking at a workaround: declaring whole countries’ regulatory frameworks “equivalent” rather than checking each producer (S&P Global). That could allow US gas to pass on paper while the EPA weakens monitoring at home.

Brussels wrote the world’s first methane import law. Whether it enforces it, or quietly parks it before winter, will say more about Europe’s energy independence than any purchase commitment.