As Europe’s energy ministers meet in Brussels this week, they are weighing legitimate concerns around energy security, affordability, and the pressures facing businesses and households. The European Commission’s proposal to delay selected EU Methane Regulation requirements for fossil-fuel importers is now moving quickly through the legislative process. Ministers have an opportunity to keep any adjustment tightly focused, while preserving the policy stability that companies and investors need to plan, invest and manage risk over the long term.
Investors need a stable framework against which companies can plan, manage risk and allocate capital with confidence. For investors, the question is not whether implementation should be practical. The question is whether a response to current pressures becomes a wider change to a framework that companies have already begun to implement.
Sixty investors, representing over €9.5 trillion in assets under management, have called for the EU Methane Regulation to be maintained and implemented as adopted. That statement pre-dated the Commission’s proposed one-year delay. Its central concern, however, is more relevant now: investors need a stable framework against which companies can plan, manage risk and allocate capital with confidence.
The regulation was designed with phased implementation. It gave companies, importers and national authorities time to prepare for stronger measurement, reporting and verification of methane emissions. It has helped bring methane from the margins into boardroom discussions, where it belongs.
For investors, methane performance can offer a useful view of how a company is run. It is an indicator of operational discipline, process safety and the quality of management oversight. By setting requirements for measurement, reporting and verification, the regulation can also improve the availability, consistency and reliability of methane data.
That gives investors a stronger basis to compare companies and assess whether they are managing risks that could affect long-term value. Maintaining the regulation’s core provisions and avoiding any further delay would protect the progress already under way. The EU’s position as a major oil and gas importer gives the Methane Regulation particular weight.
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