Sources say that the EU is looking at tweaking its methane regulations for US gas in order to facilitate trade negotiations.

Three sources with knowledge of the situation said that the European Union was looking for ways to help U.S. exports comply with their methane emission rules. The bloc is trying to avoid a trade conflict with U.S. president Donald Trump.

Both sides have indicated that energy may be included in a larger trade agreement.

Trump has repeatedly said that the EU should purchase more American oil and natural gas in order to reduce its trade surpluses with the United States. Ursula von der Leyen, President of the European Commission, said that the EU may increase its U.S. LNG purchase as it seeks to abandon Russian gas by the year 2027.

Sources said that as part of its energy options to support trade negotiations with the U.S. the Commission is exploring flexibility in the way it applies EU methane regulations, which could be beneficial for U.S. LNG suppliers.

They said that the goal would be to not weaken the law overall, but introduce technical rules which could allow U.S. companies to be considered to follow "equivalents" to the EU's methane regulations, and comply automatically with EU law.

Sources did not give details about how this could be achieved.

Trump's plans to eliminate existing U.S. regulations that require gas producers to disclose their methane emission levels could complicate the move, and make it more difficult for the EU justifying allowing U.S. firms to automatically comply.

The spokesperson for the European Commission declined to comment whether they were exploring any possible flexibility in the methane laws that would benefit U.S. LNG Exporters.

The spokesperson stated that "the Commission is in constant dialogue with the industry about all pertinent issues related to our laws".

Methane, a powerful greenhouse-gas, is the second biggest cause of climate changes after carbon dioxide emissions.

As of this year, importers to Europe who import oil and gas are required to report and monitor the methane emissions that result from these imports.

The EU methane legislation could give U.S. gas an edge over suppliers who emit more methane, like Russia and Algeria.

The U.S. gas industry is fragmented, and exporters say they'll struggle to comply technically with the law. One LNG shipment could contain fuels from multiple gas fields.

The EU law requires that foreign suppliers sign new contracts with European customers by 2027 if they want to comply with the EU methane regulations.

Last month, the European Commission hosted an online discussion with U.S. LNG firms to discuss their concerns regarding the law.

The U.S. has already become the EU's largest LNG supplier, after increasing deliveries to Europe as it raced to replace Russian Gas following Russia's invasion of Ukraine in 2022.

Last year, the U.S. provided 45% of EU LNG imports. This equated to 16.5% of EU total gas and LNG imports. (Reporting from Kate Abnett, Brussels; Valerie Volcovici, Washington D.C. ; editing by Richard Valdmanis & Ros Russell).

(source: Reuters)