BRUSSELS -- The European Union wants to suspend penalties for companies that breach new rules aimed at curbing global warming, after the Trump administration and industry groups said they were too hard to comply with and could lead to energy shortages.
The European Commission, the EU's executive arm, recommended Monday that EU countries delay noncompliance penalties that had been set to take effect next year. The fines, which can be as high as 20% of a company's annual revenue, wouldn't come into play until 2030, the commission said.
The EU requires companies to monitor and report on methane emissions for oil, natural gas and coal they import, and is set to eventually cap the amount of methane that can be emitted for each unit of imported energy. The bloc wants to reduce emissions of methane because it is a potent greenhouse gas that traps heat in the atmosphere.
Industry groups and some of the EU's biggest energy suppliers say the rules are too onerous and could make it harder for the bloc to meet its needs.
Disruptions to oil and gas shipments through the Strait of Hormuz have added to concerns in import-reliant Europe, where high prices are kneecapping companies' ability to compete with the U.S. and China.
The U.S. and other energy-exporting countries have pressed the EU to ease its methane rules. Some American multinationals such as Exxon Mobil have subsidiaries in Europe that import energy from outside the bloc, meaning the rules would apply to them, too.
In a joint letter last month, the energy ministers of the U.S., Qatar, Algeria and Nigeria said they saw "no viable path to compliance" with the EU's methane regulation, and called for a delay to the penalties and changes to the law.
"Even with adaptive and flexible implementation, significant negative supply and price impacts are a certainty," the ministers wrote.
The EU's methane rules aren't the only ones the Trump administration has opposed. U.S. officials have also panned other EU sustainability reporting requirements and strict new rules for large tech companies. They refer to some of those rules as nontariff trade barriers, which they say remain a major irritant in the trans-Atlantic relationship even after the bloc dropped tariffs on many U.S. goods.
The EU said Monday that it is still committed to the methane rules and its emissions-reduction goals. Companies are expected to comply with the rules even if penalties are delayed, and sanctions can still apply if a company engages in deliberate fraud, an EU official said.
The International Association of Oil & Gas Producers, whose members include Chevron, Exxon Mobil and ConocoPhillips, said the proposed rule change doesn't go far enough.
Write to Kim Mackrael at kim.mackrael@wsj.com
(END) Dow Jones Newswires
July 20, 2026 12:59 ET (16:59 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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