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EN EN EU R O PEAN C O M M I SSIO N B russe ls, 14 .10.2020 C OM 2020 663 f inal COM M UN IC ATIO N FR OM TH E COM M IS S ION T O T HE E UR OPE AN P A RLIAM E NT, T HE COUN CIL, T HE E UR OP E AN E CONOM IC AN D SO CIA L COM M IT T E E AN D TH E COM M IT T E E OF T HE REG IONS on an E U st r at e gy to r e d u c e me than e e m iss ion s 1 I. INTRODUCTION Methane is a powerful greenhouse gas, second only to carbon dioxide in its overall contribution to climate change. On a molecular level, methane is more powerful than carbon dioxide. Although it remains for a shorter time in the atmosphere, it has a significant effect on the climate1 and contributes to tropospheric ozone formation, a potent local air pollutant which itself causes serious health problems 2 . Reducing methane emissions therefore contributes to both slowing down climate change as well as improving air quality. Significant portions of methane emissions can be mitigated cost-effectively. The Regulation on the Governance of the Energy Union and Climate Action3 calls on the Commission to deliver a strategic plan for reducing methane emissions. Furthermore, in the European Green Deal Communication 4 , the Commission indicated that energy-related methane emissions needed to be addressed as part of the commitment to reach climate neutrality by 2050. In this way, policy action to reduce methane emissions will contribute to both the EU’s decarbonisation efforts towards the 2030 Climate Target Plan and the EU’s zero-pollution ambition for a toxic-free environment. Current policies for non-CO2 emissions are projected to reduce methane emissions in the EU by 29 by 2030 compared to 2005 levels5. Nevertheless, the 2030 climate target plan’s impact assessment 6 found methane will continue to be the EU’s dominant non-CO2 greenhouse7. It concluded that stepping up the level of ambition for reductions in greenhouse- gas emissions to at least 55 by 2030 compared to 1990 would also require an accelerated effort to tackle methane emissions, with projections indicating a step up needed to 35 to 37 methane emission reductions by 2030 compared to 2005. At a global level, reducing methane emissions associated with human anthropogenic activity by 50 over the next 30 years could reduce global temperature change by 0.18 degrees Celsius by 20508. The EU has reduction targets for 2030 for all greenhouse gases, with anthropogenic methane emissions covered by binding national emission reduction targets under the Effort Sharing Regulation ESR9 . However, there is currently no policy dedicated to the reduction of anthropogenic methane emissions. Approximately 41 of global methane emissions come from natural sources biogenic, like wetlands or wildfires 10 . The remaining 59 are 1 IPCC AR5, 2014. IPCC, 2013 Climate Change 2013 The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. 2 European Environment Agency EEA, 2016. Premature deaths attributable to air pollution EU 28. https//www.eea.europa.eu/media/newsreleases/many-europeans-still-exposed-to-air-pollution-2015/premature- deaths-attributable-to-air-pollution. In the EU, premature deaths due to ozone exposure are estimated at between 14,000 and 16,000 per year for the years 2015 to 2017. JRC modelling results estimate that by 2030, depending on levels of methane concentrations, the difference in associated premature deaths would be between 1,800 and 4,000, annually. These results are likely under-estimates as they do not take into account recent re-evaluations of mortality risks associated with long-term ozone exposure, which suggest a factor 2.3 times higher. 3 EU 2018/1999. 4 COM2019 640 final. 5 EU 2030 climate target plan Impact Assessment, https//eur-lex.europa.eu/resource.htmluricellar749e04bb- f8c5-11ea-991b-01aa75ed71a1.0001.02/DOC_2 and certain agricultural and waste practices. Venting is the controlled release of unburned gases directly into the atmosphere. Venting is arguably more harmful to the environment as the released gas typically contains high-levels of CH4, whereas flaring converts the CH4 into less 3 methane emissions in the energy sector are fugitive emissions from the oil and gas sector, 34 fugitive emissions from the coal sector and 11 from residential and other final sectors 18. The EU’s climate target plan impact assessment indicates that the most cost- effective methane emission savings can be achieved in the energy sector. Upstream oil and gas operations generally have a variety of mitigation options that have no net costs19, or near zero costs20. Agriculture is the second sector with the highest potential in overall benefits for reducing methane emissions21. There are also potential synergies and trade-offs for mitigating the cost of emission reductions in agriculture through the reduction of nutrient losses in animal feed by enteric fermentation 22 and by producing biogas 23 . Methane emissions from livestock originate mainly from ruminant species enteric fermentation 80.7, manure management 17.4, and rice cultivation 1.2. Sources of methane emissions are often diffuse in the agriculture sector, which can make measurement, reporting and verification challenging. They also differ noticeably across the EU. Nevertheless, technologically feasible mitigation practices do exist, and their deployment should be facilitated, along with reporting on their effects. In the waste sector, the main identified sources of methane are uncontrolled emissions of landfill gas in landfill sites, the treatment of sewage sludge and leaks from biogas plants due to poor design or maintenance. Emissions from the landfilling of waste fell by 47 between 1990 and 201724, following better compliance with EU waste legislation on emissions from landfill. This was achieved primarily by diverting biodegradable waste to other waste- treatment options higher in the waste hierarchy25 such as composting and anaerobic digestion, as well as ensuring the stabilisation of biodegradable waste before disposal. However, more stringent compliance practices are needed to further reduce methane emissions from waste. An effective EU strategy to reduce methane emissions must therefore provide stronger measures to address methane emissions in each sector, but also take greater advantage of synergies across sectors and policy areas. Adopting a holistic approach brings clear advantages, as it allows for more cost-effective and evidence-based mitigation of methane emissions. It also makes it possible to build an enabling framework and strengthen the business case for capturing methane emissions. Given the high share of methane emissions in agriculture that result from livestock, lifestyle and diet changes can also contribute harmful CO2. Nevertheless, the process of flaring can release other emissions such as SO2 and NO2 which, when combined with moisture in the atmosphere, can form acid rain. 18 Climate and Clean Air Coalition CCAC Scientific Advisory Panel, 2020. 19 International Energy Agency IEA, 2020. Methane Tracker 2020, https//www.iea.org/reports/methane-tracker-2020/methane-abatement-options. 20 EU 2030 climate target plan Impact Assessment, https//eur-lex.europa.eu/resource.htmluricellar749e04bb- f8c5-11ea-991b-01aa75ed71a1.0001.02/DOC_2 https//ec.europa.eu/commission/presscorner/detail/en/ip_20_1259. 41 https//eur-lex.europa.eu/legal-content/EN/TXT/uriCELEX52018DC0773 8 EU’s renewable energy and climate targets modelled in the long-term strategy. Biogas from agricultural waste or residues can also cost-effectively mitigate methane emissions in the agriculture and the waste sectors. Conversely, biogas derived from food or feed crops increases methane emissions, and thus can undermine the mitigation benefits of biogas. It is therefore essential for biogas developments to be based primarily on waste or residues. The collection and use of high methane emitting organic wastes or residues from farming as biogas substrates should be further incentivised. This can be achieved, for example, through identifying best practices for collection and/or harvesting of sustainable wastes and residues or by incentivising the use of digestate as a sustainable soil improver in lieu of mined fertilisers. Sequential cropping can also be used in combination with manure as feedstock for sustainable biogas production, while contributing to sustainable farming practices, and as such could also be further incentivised 42 . National strategic plans for the Common Agricultural Policy CAP, among other instruments and in line with the objectives set out in the national energy and climate plans, should encourage an integrated intervention that may encompass support for suitable agricultural practices, sustainable use of digestate and nutrients therein, investments in efficient installations, and services such as advisers, training and innovation. To that end the Commission will address this issue in specific Member State recommendations by the end of 2020. As announced in the EU strategy for energy-system integration27, the Commission will re- examine the gas market regulatory framework to facilitate the uptake of renewable gases, including by considering issues such as the connection to infrastructure and the market access for distributed and locally connected production of renewable gases. In addition, the upcoming revision of the Renewable Energy Directive in June 2021, will present opportunities for further targeted support to accelerate the development of the market for biogas. Any measures to support biogas production must be carefully assessed to avoid perverse incentives that could lead to an overall increase in emissions from the waste, land and agricultural sectors, as well as to avoid an increase in the landfilling of unutilised digestate as soil improvers. Actions promoted under the methane strategy should be in line with the general sustainability criteria for bioenergy developed in the context of renewable energy legislation and with the taxonomy regulation43. Cross-sectoral actions 1. The Commission will support improvements in measurement and reporting of methane emissions by companies across all relevant sectors, including through sector-specific initiatives. 2. The Commission will support the establishment of an independent international methane emissions observatory anchored in the United Nations framework, in cooperation with international partners. The observatory would be tasked with collecting, reconciling, verifying and publishing anthropogenic methane emissions data at a global level. 3. The Commission will strengthen satellite-based detection and monitoring of methane emissions through the EU’s Copernicus programme, with a view to 42 These and other recommendations were conveyed by stakeholders at a workshop organised by the Commission on 17 July 2020 entitled ‘The opportunities and barriers to achieving methane emission reductions in waste and agriculture through biogas production’. 43 Regulation EU 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation EU 2019/2088. 9 contribute to an EU-coordinated capability for detecting and monitoring global super-emitters. 4. In order to deliver on the increased climate ambition of the 2030 climate target plan impact assessment, the Commission will review relevant EU climate and environmental legislation to more effectively address methane-related emissions notably the Industrial Emissions Directive and the European Pollutant Release and Transfer Register. 5. The Commission will provide targeted support to accelerate the development of the market for biogas from sustainable sources such as manure or organic waste and residues via upcoming policy initiatives. This will include the future gas market regulatory framework and the upcoming revision of the Renewable Energy Directive. The Commission will propose a pilot project to support rural areas and farming communities in building biogas projects and accessing funds for biogas production from agricultural waste. 2. ACTIONS IN THE ENERGY SECTOR The scope of actions for energy-related methane covers the entire oil, gas and coal supply chains. It includes liquefied natural gas LNG, gas storage and biomethane introduced into gas systems. Achieving emissions savings in this sector is feasible, with at least one third of reductions possible at no net cost to industry44 . The greatest benefits in net economic, environmental and social terms would be achieved by reducing venting and flaring, reducing leaks in fossil gas and oil production, transmission and combustion, and reducing methane emissions from coalmines45. Venting and routine flaring should be restricted to unavoidable circumstances, for example for safety reasons, and recorded for verification purposes. Supporting voluntary initiatives In the energy sector, the approach of the Commission is to support voluntary initiatives while simultaneously preparing legislation to build on and consolidate the progress made through voluntary actions. As part of this approach, the Commission is actively promoting the widespread implementation of the measurement and reporting framework devised by the Oil and Gas Methane Partnership OGMP measurement and reporting framework. The OGMP is a voluntary initiative that currently covers oil and gas upstream companies. In cooperation with the United Nations Environment Programme UNEP and the Climate and Clean Air Coalition, the Commission is working to extend the OGMP framework to more companies in the gas upstream, midstream and downstream, as well as to the coal sector and closed or abandoned sites 46 . The OGMP framework is the best existing vehicle for improving measurement, reporting and verification capability in the energy sector. In addition, the Commission calls on companies in the oil, gas and coal sectors to set up more robust leak detection and repair LDAR programmes to prepare for upcoming proposals for legislation that would make such programmes mandatory more details in the next section. Legislative action 44 International Energy Agency IEA, Methane Tracker, 2020. 45 Unintended leaks from all equipment. 46 Ongoing coordination with relevant stakeholders is supporting the development of revised MRV methodologies, adapted for these sectors and sections of supply chains. 10 The Commission will table in 2021 a legislative proposal on compulsory measurement, reporting and verification for all energy-related methane emissions, building on the Oil and Gas Methane Partnership OGMP methodology. Improving the quality of emissions data through mandatory higher-tier reporting by companies will also help Member States to improve their reporting to the United Nations Framework