EUU, Alm.del - 2020-21 - Bilag 507: Notat om høringssvar vedr. Kommissionens høring om metanemissioner i energisektoren

Europaudvalget 2020-21
EUU Alm.del Bilag 507
Offentligt

The Danish Government’s response to the European Commission’s public

consultation on legislation to measure and mitigate methane emissions in the

energy sector

The Danish

Government’s key priorities for the EU strategy to reduce methane emissions in the

energy sector



A uniform, industry wide approach to measurement, reporting and verification (MRV) of all en-

ergy-related methane emissions.



Obligations to improve the potential of leak detection and repair of leaks (LDAR) in fossil gas

infrastructure and oil and gas process facilities.



Restrictions of flaring and venting activities along with efficiency standards for flaring.

Mitigating methane emissions from biogas facilities by breaking down the RED default me-

thane leakage values by source of emissions.



An alignment of future EU regulation for reducing methane emissions with the revision of the

EU ETS

–

to ensure ambitious and cost-effective reductions across Member States without

incurring unreasonable implementation costs to the operators already covered by the EU

ETS.



Strengthening of the international cooperation and knowledge sharing on decreasing me-

thane emissions on a global scale.

The Danish Government welcomes the EU strategy to reduce methane emissions

and the current proposal for developing EU legislation to prevent methane leakage

in the energy sector. The Commission’s priorities are consistent with the Danish

Government’s agenda on climate and energy.

The Danish Government supports ambitious and cost effective climate action within

the EU and finds it important to ensure that the most cost effective actions to re-

duce emissions of greenhouse gasses will be of first priority. This also goes for the

specific efforts to reduce methane emissions.

Denmark supports the specific objectives of the policy proposal to reduce methane

emissions,

to improve the availability and accuracy of information on the specific

sources of methane emissions associated with energy consumed in the

EU, and

ii)

to put in place EU measures to mitigate those emissions across differ-

ent segments of the energy supply chain to support the enhanced 2030

climate target of at least 55 pct. and climate neutrality by 2050 at the

latest.

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EUU, Alm.del - 2020-21 - Bilag 507: Notat om høringssvar vedr. Kommissionens høring om metanemissioner i energisektoren

Measurement, reporting, and verification (MRV) for all energy-related me-

thane emissions

The Danish Government supports the objective of introducing legislation for meas-

urement, reporting and verification (MRV) for energy-related methane emissions as

proposed by the Commission in the strategy. Improving measuring and reporting of

methane emissions will lead to an increased understanding of where and how

emissions occur in the energy sector and in turn form the basis for effective mitiga-

tion and ultimately reductions.

The Danish government acknowledges the advantages of a uniform industry wide

approach to detect, monitor and report methane emissions as a means to bench-

mark between assets, companies and regions, and as an effective incentive to take

steps towards reducing emissions. The Danish Government thus supports the

Commission’s proposal to base legislative proposals on MRV on the methodology

of already existing global voluntary oil and gas industry initiative Oil and Gas Me-

thane Partnership (OMGP). The Commission is encouraged to align rules on MRV

for all energy-related methane emissions with the EU Emissions Trading System

(EU ETS), cf. below.

It should be acknowledged that not all operators in the oil and gas value chain are

currently following the OGMP framework and that technical feasibility and cost for

implementation is currently unknown. Information on the magnitude and distribution

of costs associated with measuring, reporting and mitigation of methane emissions

would be helpful to ensure that MRV is introduced in an economically efficient way

with prioritisation of installations where the potential emissions are highest.

Obligation to improve leak detection and repair of leaks (LDAR)

The Danish government agrees with the Commission in introducing an obligation to

improve leak detection and repair of leaks (LDAR) on fossil gas infrastructure, as

well as any other production, transport or use of fossil gas. An improved LDAR pro-

gram may prove as an efficient mitigation strategy for reducing emissions from fugi-

tive methane leaks from pressurised equipment used in the oil and gas industry.

Proposed obligations should consider the level of technical feasibility in the different

parts of the oil and gas supply chain and for instance take into account the chal-

lenging nature of the offshore environment compared to onshore facilities.

On a more general level, Denmark supports a revision of existing BREF documents

with more focus on methane emission sources from all industries to give the indus-

tries an overview of the tools and methodologies available to reach BAT.

Venting and flaring

Denmark supports the Commission’s considerations concerning legislation on elim-

inating routine venting and flaring in the energy sector covering the full supply

chain, from production to the end user including refineries.

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EUU, Alm.del - 2020-21 - Bilag 507: Notat om høringssvar vedr. Kommissionens høring om metanemissioner i energisektoren

The Danish Government finds it relevant to explore a more precise standard for

flaring efficiency, with the objective of further reducing both fugitive emissions and

emissions from incomplete combustion of fuels. New standards for flaring should

be imposed on new developments, while the cost effectiveness of imposing new

standards should be reviewed especially when involving alterations to existing off-

shore installations, which may be burdensome both technically and cost-wise. As

an alternative in the case of existing offshore installations, the Danish Government

finds that monitoring of methane slip in flaring operations and its mitigation may

provide sufficient and cost effective advancement towards emission reductions.

Denmark does not allow routine flaring and venting and has joined the World Bank

“Zero Routine Flaring by 2030” initiative.

We can therefore support that its imple-

mentation is moved forward to 2025.

Flaring and venting cannot be fully avoided and may be necessary occasionally

due to safety and process specific conditions (non-routine). The Danish Govern-

ment thus finds it important to obtain clarity on the definitions under this scope,

such as what is defined by the term “routine” in the context

of flaring and venting, in

order to ensure clarity for the industry and prevent possible loopholes. Definitions

may be developed in cooperation with relevant sector stakeholders. However, MRV

provisions should include all kinds of methane venting and flaring/combustion, in-

cluding accidental, emergency and other non-routine events.

Abandoned sites

The Danish Government finds it important to extend the mitigations to include

abandoned sites, specifically abandoned coalmines and abandoned oil and gas

wells.

Concerning abandoned oil and gas wells, the Danish authorities and operators

acknowledges the responsibility for correct P&A of all wells within Danish jurisdic-

tion, which follows international standards. The authority to impose monitoring ac-

tivities on abandoned offshore wells is already available to the European national

authorities and further legislation on this matter may not be warranted, since the re-

quirement for monitoring, if appropriate, is already included in the EIA directive, cf.

article 8 a (4) in the EIA directive. The obligation and costs of monitoring lie with the

asset owner/Licensee according to the conditions in the Danish licenses.

Denmark generally supports sharing of information and experiences across the EU

and North Sea region regarding long-term hazards from decommissioned assets

and well sites. With regard to e.g. technological improvements, this is periodically

reviewed within the OSPAR Offshore industry Committee (OIC).

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EUU, Alm.del - 2020-21 - Bilag 507: Notat om høringssvar vedr. Kommissionens høring om metanemissioner i energisektoren

Furthermore, it is suggested that periodical reviews of long-term environmental

hazards such as methane leakage from decommissioned assets could be coordi-

nated by the European Union Offshore Oil and Gas Authorities Group (EUOAG).

Legislating mitigation of emissions from biogas/biomethane

The Danish Government is generally concerned on the subject of methane emis-

sions from biogas plants and biogas upgrading facilities. Denmark is currently mak-

ing efforts to address the issue nationally, through a project designed to investigate

methane leakages from different biogas facilities and to convey awareness on the

issue in the industry.

The Danish Government acknowledges the possibility to address the issue through

the Renewable Energy Directive (RED) or the revision of the RED II, but would like

to point towards the fact that the requirements of the minimum greenhouse gas

savings threshold only applies to biogas facilities, which started operation on Janu-

ary 1

2021 or later. Because of this, the RED does not put forward any incentive

towards biogas facilities, which were in operation before this date. Denmark finds it

very important that older as well as new biogas facilities have incentives to reduce

methane leakages.

Denmark welcomes the suggestion to break down the RED default methane leak-

age values by source of emissions and different types of anaerobic digestion, since

this would provide a more accurate calculation of the greenhouse gas savings and

provide incentives to reduce leakages. It is very important to review the values thor-

oughly and investigate the issue further, in order for the values to correctly repre-

sent the most recent methane leakage estimations from biogas facilities.

Aligning the future EU rules for reducing methane emissions with the EU ETS

Denmark is calling on the Commission to align the future EU rules for reducing me-

thane emissions with the EU ETS directive (2003/87/EC), where the status of me-

thane emissions currently remains ambiguous. This is in addition to the E-PRTR

Regulation and the Industrial Emissions Directive as well as other regulation al-

ready under consideration by the Commission.

On the one hand, the EU ETS directive undoubtedly covers carbon dioxide emis-

sions from relevant oil and gas sector industries, such as refineries, cf. Annex I to

the directive. It is also beyond doubt that within the context of the EU ETS directive,

methane is to be considered a greenhouse gas, cf. Annex II. On the other hand,

relevant industrial activities such as combustion of fossil fuels or refining of mineral

oil are not subject to MRV obligations beyond the emission of carbon dioxide, cf.

Annex I. In effect, methane emissions from production platforms to refineries are

currently exempted from MRV obligations in spite of those installations being moni-

tored for carbon dioxide emissions.

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EUU, Alm.del - 2020-21 - Bilag 507: Notat om høringssvar vedr. Kommissionens høring om metanemissioner i energisektoren

The Commission is currently revising the EU ETS directive and will propose draft

legislation later this year with the intention to possibly extend emissions trading to

new sectors and broaden the scope of emissions. The revision presents an im-

portant chance to lift current limitations to the scope of MRV obligations for ETS-

covered installations making sure that methane emissions will be covered by EU

ETS. In this light, Denmark encourages the Commission to align its regulatory ap-

proach to methane emissions

–

e.g. MRV obligations for all energy-related me-

thane emissions

–

with its revision of the EU ETS. A strong and uniform CO

price

signal on methane emissions in the energy sector will ensure ambitious and cost-

effective reductions across Member States without incurring unreasonable imple-

mentation costs to the operators already covered by the EU ETS.

If the Commission would deem it unavoidable to establish new separate methane

MRV regulation outside the EU ETS directive, it is still imperative to design this new

regulation in a way that allows for easy adoption of methane MRV into the EU ETS

framework at a later stage. In cases where methane emitting installations in the en-

ergy and industry sector is not covered by the EU ETS yet, it is worth assessing if

those installations should be included either now or at a later time.

The EU ETS is not only a proven system for incentivizing energy and industry to re-

duce greenhouse gas emissions without incurring unreasonable costs on opera-

tors. It is also an efficient mechanism for providing financial means for investments

necessary to combat greenhouse gas emissions.

International cooperation

The Danish government agrees with the Commission in the importance of strength-

ening the international cooperation with the aim of decreasing methane emissions

on a global scale. Denmark acknowledges that emissions in the oil and gas indus-

try is a global issue and supports the proposal to strengthen the international coop-

eration of the priority objectives of the strategy to ensure that companies use uni-

form and more accurate methods of measuring and reporting methane emissions

than they do today.

The Danish government supports the considerations for EU to include in the scope

of its regulation all of the methane emissions linked to its consumption of fossil en-

ergy (oil, gas and coal). The Commission should examine whether obligations on

MRV, LDAR and venting and flaring could somehow be extended to cover export-

ing companies of oil and gas, or even types of fossil energy, to the EU.

The Danish Government supports EU and international efforts to use satellite sur-

veillance and establish the International Methane Emission Observatory (IMEO).

Denmark supports the IMEOs aim of collecting, reconciling and verifying methane

emissions data at a global level, adding value by cross checking data with science

studies, country reporting and data sources such as satellite measurements.

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EUU, Alm.del - 2020-21 - Bilag 507: Notat om høringssvar vedr. Kommissionens høring om metanemissioner i energisektoren

An important task of the IMEO will be publishing and sharing of data internationally

and providing the methane-supply index (MSI) at EU and international level. The

Danish Government agrees that the MSI will be an important market transparency

instrument, allowing buyers to make informed choices on the methane intensity of

fossil energy sources before the purchasing decision.

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