While the EU has been campaigning to adopt more renewable sources of energy, reduce emissions, and become more climate-conscious and sustainable, US tariffs are an economic strongarm that is derailing its climate goals.
The European Union’s (EU) commitment to cut emissions is certainly thrown for a loop with the escalation of the trade war after Donald Trump’s tariffs. However, the EU is working to accommodate the US gas exports to comply with its methane emissions rules, as it tries to prevent further economic damage from the trade war.
The European Commission is also working on an offer for trade negotiations to negate Trump’s tariffs, and both sides are hopeful that energy is the sector which could be part of a larger trade deal. Reuters has reported that, according to sources, the Commission is exploring flexible options in how the EU’s methane rules are enforced, which could ultimately benefit US LNG (Liquid Natural Gas) exporters.
Trump has constantly nudged the EU to buy more American oil to balance the trade surplus, and European Commission President Ursula von der Leyen stated last year that Europe could consider replacing Russian LNG imports with those from the US. Leyen explained in November 2024 that the EU imports huge volumes of LNG from Russia, and that American oil was cheaper and could bring down energy prices. She also said that if LNG imports from the US increase, then the bloc could cease Russian imports by 2027.
While the EU has been campaigning to adopt more renewable sources of energy, reduce emissions, and become more climate-conscious and sustainable, US tariffs are an economic strongarm that is derailing its climate goals. This new trade deal could introduce technical rules that permit US exporters to seemingly follow ‘equivalent’ EU methane rules. The EU would not weaken the law by any means, but the deal could contain clauses that allow exporters to automatically comply with EU regulations.
Although the EU is using a more balanced approach, the Trump administration, on the other hand, plans to scrap altogether all regulations required by oil and gas producers to report their methane emissions. During his campaign, the Republican candidate was vocal about his commitment to loosen drilling licences and approve more fracking projects.
Washington has been campaigning for months now to ensure LNG exports to the EU, which currently correspond with US methane regulations, should automatically comply with the continent’s new standards for gas imports. This was in direct conflict with a law approved by the EU countries last May, which limited methane emissions on Europe’s oil and gas imports from 2030, thereby compelling international exporters to cut leaks of this greenhouse gas.
According to Eurostat, the EU statistics office, 47% of the EU’s LNG imports and 17% of its oil imports in the first quarter of 2024 came from the US. And while the EU countries are working to phase out their Russian oil imports, simply importing oil will not spare them from tariffs. Having polar opposite climate goals from the US leaves the EU with little room for negotiation, as Trump has threatened to facilitate oil and gas imports or face tariffs.
Amidst these speculations of methane regulation relaxations, the European Commission has remained silent, with a spokesperson saying that the Commission was in talks with industry experts on all relevant topics related to its legislation. Methane is the second-biggest cause of emissions after carbon dioxide, and the EU law requires importers to report emissions associated with these imports.
However, US exporters have complained that, due to the fractured nature of its gas industry, tracking methane emissions would not be feasible, as shipments often contain co-mingled sources of fuel from various gas fields. Starting in 2027, foreign suppliers wishing to partner with European buyers will be legally required to comply with methane regulations equivalent to those of the EU. It remains doubtful that Washington will agree to these rules, as Trump is unwavering in his conviction that economic interests will top all other priorities. Therefore, it will be interesting to see how far the EU, which has been prioritising its climate goals despite initial economic costs, will go to accommodate Trump’s ultimatums to avoid tariffs.
