The Societal Benefit of the EU Methane Regulation

The EU Methane Regulation, adopted in 2024, aims to reduce methane emissions from the production and supply of oil, natural gas and coal. Beyond introducing new requirements for monitoring and reducing emissions within the EU, it progressively extends these obligations to imported fossil fuels. This is particularly important as more than three quarters of the methane emissions associated with European fossil-fuel consumption occur outside the EU. As political pressure to delay or weaken the Regulation grows, a new DIW Econ study examines its potential societal benefits and the costs of implementation.

The findings show that the societal benefits of the Regulation could exceed its costs by a factor of 14. Under full and timely implementation, assuming an illustrative methane-intensity threshold of 0.2% for imports from 2030, around 80 million tonnes of methane emissions could be avoided cumulatively by 2050. The present value of the resulting global climate, health and economic benefits over the modelled period exceeds €700 billion, compared with regulatory costs of around €50 billion. The Regulation could prevent around 155,000 premature deaths worldwide over the modelled period. Delaying implementation by three years while introducing a weaker methane-intensity threshold would result in around €185 billion in foregone societal benefits.

For the analysis, DIW Econ reconstructed the methane emissions associated with European fossil-fuel consumption using international energy trade data and country-specific emission intensities. Different implementation scenarios were then assessed using an extended version of the GIVE integrated assessment model. The model quantifies avoided societal damages from temperature-related mortality, ozone-related respiratory mortality, agricultural losses, heat-related labour productivity losses, additional energy costs and sea-level rise. These benefits were compared with estimates of technical abatement and regulatory compliance costs.

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