France urges EU to postpone methane reporting requirements

By Forrest Crellin, Elizabeth Pineau and Kate Abnett

PARIS, Sept 22 (Reuters) - French President Emmanuel Macron has written to the European Commission urging it to postpone new methane reporting rules for oil and gas importers, arguing they could create legal risks for importers as energy supplies tighten.

Macron's letter to Commission President Ursula von der Leyen, dated September 18, was first reported by French newspaper Les Echos and has been seen by Reuters.

Macron's government faces pressure from unions in various sectors and opposition parties jostling for position ahead of the 2027 presidential election, who have criticised the president for failing to do more to address cost-of-living concerns.

The EU's new rules, due to come into effect on January 1, will require monitoring and verification of methane emissions for oil and gas deliveries to the bloc, aiming to curb leaks of the potent greenhouse gas and imposing fines if companies breach the regulation.

Macron called for the regulations to be delayed by a year until January 1, 2028.

Methane is the second-biggest contributor to global warming behind carbon dioxide.

The European Commission is closely monitoring developments in fuel markets and will analyse Macron's suggestions, a Commission spokesperson said. 

"If we see any security of supply issue we are of course ready to consider further measures," the spokesperson added.

Two EU officials told Reuters the Commission was looking into the methane law's potential impact on energy supplies, but had not yet decided to move ahead with changes to the law. "I wouldn't yet say it's a given that we're going to look into reopening it," one of the officials said.

More than a dozen EU members, including Germany, Europe's biggest gas market, have already asked for the rules to be delayed or suspended.

In response, the European Commission in July instructed EU member states to waive financial penalties linked to the regulation for three years, until the end of 2029, but has not agreed to postpone implementation of the rules.

MACRON'S OTHER PROPOSALS

EU countries themselves negotiated and approved the methane rules in 2023, but some governments say it should now be rolled back, to avoid the risk that it adds global fuel supply disruptions caused by the Iran war.

Macron, in his letter, also called for the EU to temporarily loosen fuel-quality rules to boost European production of kerosene and diesel, as supply pressures mount. French refiners estimate that this could increase their fuel production by 5% to 20%, he said.

The French president also proposed relaxing biofuel-blending limits, including allowing distributors to replace B7 diesel, which contains up to 7% biodiesel, with B10, containing up to 10%.

MORE FLEXIBILITY

Macron asked the Commission to examine possible temporary changes to European requirements governing fuel density, vaporisation limits and desulphurisation.

As a result of the deterioration in international fuel supply, refiners and importers are reporting increasing difficulties in confirming deliveries for the coming weeks, Macron said. 

Macron said similar flexibility had been granted during the COVID-19 crisis.

The measures could help bolster European fuel supplies at a time when the bloc remains heavily reliant on the Middle East, which accounts for 36% of its kerosene imports and 18% of diesel imports, according to the letter.

The French prime minister's office said that, while the government had not earned more VAT revenue from the increase in fuel prices, it would propose to parliament the creation of a "golden rule" in the upcoming budget law.

The rule would ensure that any increased revenue earned from increased fuel prices "will be neutralized and returned to the French people at the pump."

(Reporting by Elizabeth Pineau, Makini Brice and Forrest Crellin; Editing by Emelia Sithole-Matarise and Susan Fenton)