Environmental Defense Fund, Incorporated
EDF
Environmental Defense Fund's mission is to preserve the natural systems in which all life depends.
ID: 173460831899-75
Lobbying Activity
Response to Revision of EU rules on Gas
1 Mar 2021
To ensure relevance of the revision of EU rules on market access for the EU's climate objectives as well as to enable smooth delivery of objectives 2,3 and 4 of the planned initiative- particularly to level the playing field and ensure robust consumer rights - we recommend a mandatory methane emissions performance standard effective on all gas sold in the EU's market as of 1 January 2025 and inspired by the OGCI commitment to deliver a 0,2% methane intensity by 2025. As per ACER's recommendations in the "Bridge beyond 2025" we recommend a dynamic regulation approach with annual review clauses to update said performance standard in alignment with science and technology developments.
To ensure effectiveness, this should be mandated as a core part of the revision of EU rules on market access as recommended in this brief: https://www.edf.org/sites/default/files/content/EUMethane-Brief.pdf and our feedback to the sector integration consultation: https://www.edf.org/sites/default/files/content/EDF-feedback-to-the-Sector-Integration-consultation.pdf.
Four foundational mechanisms could enable delivery of a performance standard:
1) an EC-administered body working in coordination with ACER and the NRAs and acting as a European Methane Emissions Observatory, preferably integrated in the existing EU Energy Markets Observatory administered by DG ENER and mandated to collect, audit and make public measurement data available through IMEO and other public and private methane emissions data providers;
2) A clear mandate enabling both ACER and the NRAs to act as well as adequate resources to execute on their function;
3) A mandatory methane procurement standard requiring EU shippers and gas buyers to purchase 100% of their gas volumes by producers performing at the 0,2% methane intensity standard as of 1 January 2025;
4) A legal base enabling NRAs, national and regional governments to administer proportional and dissuasive penalties such as taxes, levies or tradeable permits on all non-compliant gas transactions, including through pipeline, LNG, long-term contract or spot.
An EU performance standard would provide regulatory and legal certainty across the supply chain and create consistency of approach and outcomes across all relevant national and regional methane policy frameworks.
Under the performance standard, EU gas buyers (shippers, importers) should be required to procure gas produced at a methane intensity no higher than 0.20% from 2025 or pay taxes and levies. It should be enacted at EU level with a robust mandate for national energy regulators to implement it and enforce it.
To ensure relevance with the EU's climate target and the necessary agility required to take into account progress in science and technology, the revision of EU gas market access rules should also include an annual review clause to consider more accurate data delivered through IMEO, industry, and other public and private information service providers. Once data is accurate enough, the performance standard could further evolve to a dynamic mandatory industry benchmark requiring EU as buyers to procure from producers performing at the level of the top 10% performers. Penalties at the national and regional level should be reviewed accordingly.
Enclosed an EDF-commissioned report by Enervis exploring the efficiency and effectiveness of CH4 emissions pricing, which finds:
1. Significant impact on global methane emissions from O&G - up to 80% reduction in the global methane footprint of the EU’s gas supply chain;
2. Including methane pricing in the wholesale gas price can be effective: the impact of methane pricing on both residential and industrial gas prices would be minimal. Should methane pricing be aligned with the EU ETS and integrated in the wholesale gas price, it could give a clear price signal to 3rd country producers and suppliers of the value in reducing their methane emissions.
3. Security of gas supply is not affected.
Read full responseResponse to Proposal for a legislative act on methane leakage in the energy sector
26 Jan 2021
Environmental Defense Fund (EDF) fully supports the two specific objectives of the proposal.
Regarding the objective of improving the availability and accuracy of information on the specific sources of methane emissions associated with energy consumed in the EU, EDF supports the third option of translating the OGMP framework into EU legislation applicable to the full supply chain, including imports. This option should as a minimum be explored and improved on, provided granular data becomes publically available at the company level. The OGMP 2.0. is designed as a voluntary initiative, publishing aggregated data annually and can help enable accountability at the company level, provided the Commission and national governments are empowered with the authority to secure access to company data. Its principles are robust and should inspire the EU MRV system, which should aim to deliver transparency at the company and, over time, at the facility level.
On mitigation, requiring LDAR as well as venting and flaring controls should extend to include imports, fossil gas, oil, coal and biogas/biomethane as appropriate. However, considering the lack of common definitions of what constitutes venting & flaring among the EU and its main suppliers, as well as the large gap in practice and differences in context, EDF encourages the European Commission to introduce mandatory methane performance standards binding on all gas buyers in the EU, as discussed in the IEA Methane Regulatory toolkit (https://www.iea.org/reports/driving-down-methane-leaks-from-the-oil-and-gas-industry/regulatory-toolkit)
In support of exploring the efficiency and effectiveness of pricing, we enclose a study conducted by Enervis, which finds:
1. Significant impact on global methane emissions from O&G: well- designed methane pricing incentivising EU gas suppliers to implement methane abatement measures could deliver a near 80% reduction in the methane footprint of the EU’s gas supply chain, including in third countries.
2. Including methane pricing in the wholesale gas price can be effective: the impact of methane pricing on both residential and industrial gas prices would be minimal. Should methane pricing be indexed on the EU ETS and integrated in the wholesale gas price, it could give a clear price signal to 3rd country producers and suppliers of the value in reducing their methane emissions.
3. Security of gas supply is not affected: Flows to Europe would continue uninterrupted and the small reductions in pipeline gas could be covered by LNG imports.
Enclosed: Enervis report on "Scenarios, Effectiveness and Efficiency of EU Methane Pricing in the Energy Sector"
Read full responseMeeting with Kadri Simson (Commissioner) and
24 Sept 2020 · Methane emissions
Response to Revision of the Renewable Energy Directive (EU) 2018/2001
21 Sept 2020
Environmental Defense Fund's (EDF) comments include both the strategic need to introduce a methane performance standard and a set of changes to the existing REDII sustainability framework.
Considering the EGD’s strategic priorities of decarbonising gas and directing investments to sustainable activities, it is strategically important to ensure alignment of both the RED II and its sustainability framework with the Sector Integration, Hydrogen and Methane Strategy as well as the Sustainable Finance taxonomy. In this context, mandatory methane performance standard on all gases sold in the EU market, including biogas, biomethane and hydrogen should be introduced as part of gas market reform.
The following changes to the REDII sustainability framework are imperative in order to support higher EU climate ambition that minimises the risk of unintended consequences, including incentives for unsustainable biomass, as well as to increase the use of sustainable biomass:
1) The adoption of a more robust and broader set of sustainability criteria that cover the whole supply chain, accompanied by provisions for an enhanced certification system to ensure the traceability of environmental attributes and the linking up with a robust and transparent MRV system for emissions reduction claims.
2) The inclusion of indirect land use change (ILUC) and other indirect effects in lifecycle emissions estimates while maintaining stringent minimum reduction thresholds to disincentive the use of unsustainable biomass. This includes for non-food and feed crops under REDII such as intermediary crops, which should be required to prove they meet general criteria for low ILUC-risk biofuels as defined in Regulation (EU) 2019/807 to demonstrate that cultivation does not trigger demand for additional land.
3) The estimation of indirect effects must be extended to renewable synthetic fuels, which risk displacement effects for the renewable energy supply in the near- to mid-term, due to low energy efficiency. Making an expedited energy transition of the power sector in the EU critical for a successful deployment of such fuels.
4) The reward of biogas, biomethane, hydrogen, liquid biofuels and renewable synthetic fuels based on lifecycle emissions reductions rather than volumes, including all methane emissions reductions.
Adopting a combination of Option 2, Option 3 and Option 4 presents the best way forward for REDII reform, such that:
• Option 3- RED II subtarget ambition for renewable electricity deployment is significantly raised, which will also directly support the expedite energy transition of the transport sector including the sustainable deployment of renewable synthetic fuels.
• Option 4- Amendments to Articles 29-31 of REDII enhance the sustainability framework to ensure alignment with the European Green Deal.
Read full responseResponse to Offshore renewable energy strategy
12 Aug 2020
EDF commends the European Commission’s approach to delivering a European offshore wind value chain and agrees with both the problem and opportunity definitions outlined in the roadmap. We believe that the priority actions identified are the right ones but also see the need for more systematic thinking around four additional areas:
1. How to make use of the synergistic effects with the offshore O&G industry to accelerate a coordinated scale-up and development of an efficient value chain through both technology and skills crossovers;
2. How to develop an efficient market for offshore wind service suppliers and SMEs, including through incentivising pivoting from the O&G supply industry into offshore wind;
3. How to ensure that coastal communities are fairly rewarded and reap the benefits of industry development in the form of good local jobs and growth;
4. How to ensure the environmental integrity and resilience of the marine environment around offshore wind operations in already dense marine spaces.
Read full responseResponse to EU Methane Strategy
24 Jul 2020
Environmental Defense Fund (EDF) commends DG Energy’s approach to focus on an enabling framework to tackle methane emissions, both domestic and embedded, as well as complementing EU and Member States’ GHG obligations with sectoral policies. Setting clear product standard requirements on both those who sell and buy gas in the EU’s internal market, including imported, is a global climate opportunity with significant potential to curb global methane emissions from oil and gas quickly.
However, timing is of the essence. The EU has a limited window to leverage its market position to regulate methane emissions from oil and gas for maximum impact. According to market analysts, the EU is due to lose its position as the largest importer of internationally traded gas to China within the next two years and with it the leverage to negotiate better methane performance standards of the gas it buys from both domestic and third-country producers. Thus, during the next two years, the EU should put in place the necessary regulatory measures and engage in parallel in energy diplomacy and practical collaboration with supplier regions.
Particularly regarding the energy sector, which is more advanced in both its understanding of the problem and cost-effective mitigation potential, we urge the Commission to focus its policies on both better MRV as well as clear, legally binding mitigation requirements on all private and sectoral entity levels placing natural gas in the EU’s internal market. Setting clear product standards and benchmarks informed by what the industry has confirmed can be achieved is consistent with both the industry-led Oil and Gas Climate Initiative’s commitment to reduce methane emissions from oil and gas to 0,25% intensity by 2025 and feedback shared by energy stakeholders during the June stakeholder workshops, which found that: “Nevertheless, there was also an overriding sentiment that sufficiently high-quality data and knowledge already exists to begin strong mitigating action in parallel with data gathering efforts. Four NGO’s expressed concerns that the Commission intended to employ a ‘measure first-mitigate second’ approach. Some stakeholders drew attention to known practices and equipment associated with significant methane emissions across the value chain, for which action could begin immediately. Examples include venting and flaring at the point of extraction as well as the deliberate release of natural gas along pipelines to manage pressure levels”.
We are glad to see stakeholder views reflected in the suggested roadmap. In this context, we hope to see the Commission aim for the highest level of ambition possible on mitigation actions in the gas sector, particularly in relation to a methane standard for all gases placed on the EU’s market, including from imports.
Finally, as explained in our feedback to the Sector Integration consultation ,which we also are glad to see reflected in both the Sector Integration and Hydrogen Strategies, addressing methane emissions in the current and future gas system must be an essential requirement for developing a viable hydrogen industry.
As the Commission rightly acknowledged in its Hydrogen Strategy: “In the case of fossil-based hydrogen with carbon capture, the Commission will address upstream methane emissions occurring during the production and transport of natural gas and propose mitigating measures as part of the upcoming EU Strategy on Methane”. Delays in scaling up blue hydrogen will inevitably delay both market creation for hydrogen and scale-up of green hydrogen and this risk further lock-in to unabated gas.
Based on the above, we welcome the sectoral approach proposed herein, aiming to put in place an enabling environment and urge the Commission to fast track action on methane emissions in the energy sector with legislative action on MRV and mitigation measures presented no later than June 2021, including as part of the gas market reform.
Read full responseResponse to Strategy for smart sector integration
14 May 2020
Reverse engineering from a climate neutral future, the most important fact to be aware of is that in 2040, 50% of the warming caused by this year’s GHG emissions will come from anthropogenic methane, a powerful climate forcer, 84-87 times more potent than CO2 in the first twenty years after it has been emitted. In other words, the impact of GHGs emitted this year over the next 20 years will be dominated by methane. Around 12% of the warming experienced in 2040 will come from the oil and gas industry. Fixing this problem is the lowest hanging fruit for the O&G industry.
This implies that a climate neutral future across GHGs requires a focus on cleaning up both CO2 and methane emissions in the EU’s energy system today while building the low-carbon energy system of tomorrow. Failure to clean up methane and CO2 emissions in the energy system today will risk tomorrow’s low carbon businesses being built on sand.
According to the Commission’s own modelling natural gas use will continue well into 2050, albeit in a reduced role. Considering how cheap gas is, we believe that the biggest cost-efficiency potential lies in internalising the environmental externalities of gas, notably methane emissions, in the gas price to level the playing field with low-carbon electricity. A core feature of the gas market reform should be a mandatory methane performance standard consistent with what the industry considers feasible: 0,2% methane intensity by 2025.
The oil and gas sector accounts for about 25% of total methane emissions. Since molecules account for about 70% of the EU’s final energy use and the EU imports about 50% of internationally traded gas, the EU has both the leverage and the opportunity to affect change in the global O&G industry and on the rate of global warming by requiring that anyone selling gas in the premium EU internal gas market should be able to credibly demonstrate that they have managed methane emissions.
In terms of market design, a truly integrated energy system should effectively enable a broader construct of the merit order, ranking energy sources not only according to their short-term marginal costs but also according to their CO2 and methane footprint. This market design should deliver both lower energy production costs and CO2 and methane footprint by making it easy for market participants to prioritise:
1.Energy efficiency
2.Reduction in CO2 and methane emissions along the EU’s energy supply chains
3.Clear and stable investment signals ensuring higher take-up rate of innovative, future-proof technologies and a faster track to industrialisation for promising technologies that deliver CO2 and methane reductions.
We enclose a more details response to the current consultation as well as our response to the EU Methane Strategy consultation.
Best wishes,
Poppy Kalesi
Director, Global Energy
Read full responseResponse to FuelEU Maritime
23 Apr 2020
Environmental Defense Fund (EDF) welcomes the opportunity to comment on the European Commission’s proposed plans to incentivise sustainable fuels in maritime transport.
The key points the Commission must consider are:
• Any policy on maritime fuels must take a full lifecycle approach. In addition to accounting for well-to-wake direct emissions, indirect emissions (such as ILUC) also need to be considered. It is important not only to understand the overall impact of the sector on the climate but also to provide the certainty and confidence for all stakeholders to move towards truly sustainable fuels. We have a forthcoming (May 2020) paper looking at the lessons for shipping from ICAO’s accounting framework for alternative fuels. We will provide this paper to the relevant DGs once published.
• There will need to be third party certification scheme for sustainable fuels. All fuels could be reported transparently under the scope of the EU shipping MRV.
• Other sustainability criteria should be taken into account, such as water, soil, air, conservation, waste and chemicals, human and labor rights, land use rights and land use, water use rights, local and social development, and food security.
• Currently the EU does not adequately account for the full lifecycle of alternative fuels in the transport sector and under the Emissions Trading System. Biofuels cannot be rated as having zero CO2 combustion emissions. These policies should be reviewed at the earliest possible opportunity.
• There should be a comprehensive system of support (including from EU ETS price) for deployment of ships and on-land alternative fuels infrastructure; potentially using schemes which cover the difference in cost between zero emissions and fossil fuels (contracts for difference) to help finance the additional cost of new technologies for EU businesses.
• All greenhouse gases must be taken into account while considering and evaluating alternatives to conventional fuel, including the impacts of short lived climate forcers such as methane.
• A robust framework comprising multiple policies will be necessary to deliver the necessary transition to zero carbon shipping. As noted it is difficult for maritime operators to build the business case for the use of alternative fuels. We need robust policies to make these cost competitive.
• To provide the necessary price signal, emissions from the sector should be included in the Emission Trading System, and EDF looks forward to engaging on the required design elements.
• The EU should also consider whether a proportion of the revenues from the auction of allowances under the ETS can go towards incentivising alternative fuel supply, including in developing countries. We attach our report Sailing on Solar which includes case studies and highlights potential benefits.
• The EU must mandate the use of shore-side electricity across the EU. It is vital in order to reduce air pollution and climate impacts but it is clear that ships and ports are not willing to use or provide shore power voluntarily.
The EU is currently in a strong position to lead on the decarbonisation of international shipping which can also benefit the EU economy. The EU ETS provides a potential path forward for incentivising the use of sustainable alternative fuels for shipping. A well-designed EU system can be used as a blueprint for the IMO policy on alternative fuels and a carbon pricing measure. The EU should deliver on the ambition set out in the Green Deal and lead its shipping industry towards a carbon-free future.
Read full responseResponse to ReFuelEU Aviation - Sustainable Aviation Fuels
21 Apr 2020
Environmental Defense Fund (EDF) welcomes the opportunity to comment on the EC’s plans to incentivize sustainable aviation fuels (SAF).
The European Commission should only propose a quantitative SAF mandate if it incorporates a robust sustainability and accounting framework that addresses flaws in existing legislation. To achieve this, the EC should require that SAF policies:
1. Use a lifecycle approach to estimate and account for emissions reductions from SAF, rewarding SAF for actual environmental results. This requires a change to the EU ETS assumption of zero CO2 combustion emissions for certain fuels, an incorrect assumption that undermines the integrity of the ETS and the EU’s Paris pledges.
2. Use a robust sustainability framework (including ILUC) which corrects the flaws in the current framework that builds on ICAO CAEP-approved sustainability criteria in the ICAO Doc 10126, CAEP/11 (4-15 February 2019) and is in line with the EU’s own advocacy in ICAO (see attachment).
3. Include a methodology to avoid double counting with Paris goals. The EC should design a methodology to ensure the traceability of SAF’s environmental attributes along the supply chain that is linked up with a robust and transparent MRV system for SAF emissions reduction claims.
4. Are consistent with other measures including those proposed for maritime transport.
5. Express mandates, if required, as emission reduction targets.
The EC should also:
• Require that all MS transpose incentives for aviation and maritime SAF appropriately, including the 1.2 multiplier in Article 27 of RED II. EU RED II includes provisions to incentivize sustainable aviation and shipping fuels, and Article 27 includes a multiplier for these fuels. Because previous legislation such as FQD only included road transportation, there is a significant risk that MS will not appropriately include aviation and maritime fuels when transposing EU RED II.
• Clarify that the FQD ends in 2020.
The current inception impact assessment does not include all necessary elements. Further impact assessment should also:
• Assess whether further intervention is actually required. It is possible without further intervention that EU RED II and a revised EU ETS that adopts rules under point 1 above would be sufficient to incentivize the uptake of high quality SAF. As the EU ETS price increases over time it should gradually fill price gaps between SAF and fossil jet fuel, enabling a transition from short-term volume mandates to a longer term performance-based approach. An impact assessment should explore this potential and also re-evaluate the near- and long-term SAF uptake baselines currently used (Inception IA, Section B, para. 2), because the existing EU ETS price plus robust transposition of EU RED II could result in significantly larger volumes of SAF usage.
• Assess the potential role existing HVO/HEFA refining capacity could have in the baseline in the event HEFA+ gets ASTM certified in the near-term.
• Assess the role of intermediary crops as SAF feedstocks and as an additional source of income in rural areas. These feedstocks are entitled to the EU RED II 1.2 multiplier as “non-food or feed crops”, provided cultivation does not trigger demand for additional land. To meet this requirement, any legislative proposal should incorporate the general criteria for certifying low ILUC-risk biofuels as defined in Regulation (EU) 2019/807.
Read full responseMeeting with Aleksandra Tomczak (Cabinet of Executive Vice-President Frans Timmermans), Riccardo Maggi (Cabinet of Executive Vice-President Frans Timmermans)
5 Feb 2020 · Methane in climate neutrality goal