The European Commission has released a draft regulation on the methodology for assessing the greenhouse gas (GHG) emissions savings from low-carbon fuels. The accounting methodology is based on the full life cycle emissions and indirect emissions resulting from the diversion of rigid inputs, upstream methane emissions and carbon capture rates. The main concerns regarding the draft regulation, especially for the US market, are that the framework’s treatment of imported low-carbon fuels fails to recognize pre-existing carbon accounting methodologies and management practices outside the EU. Feedback has suggested amendments to reflect the carbon emissions intensity of low-carbon fuels more accurately and recognize existing non-EU emissions intensity management systems.
Low-Carbon Fuels in the EU
The draft regulation is part of the revised EU hydrogen and gas market legislation that became effective in mid-2024 (Directive (EU) 2024/1788). Article 9 of the directive mandates the commission to adopt a methodology for evaluating the GHG emissions savings of low-carbon fuels. The legislation aims to decarbonize the gas market by 2050, targeting two-thirds renewable/low-carbon gases and one-third natural gas combined with carbon capture, utilization or storage (CCUS) technology. This contrasts with today’s 95% fossil fuels energy mix.
