In this paper we provide an overview of the EU MER’s import requirements and assesses the current state of play for compliance solutions, including the practical significance of the Commission’s guidance. We also introduce a recent contribution from the Oxford Institute of Energy Studies (“OIES”), a non-profit research institute, published in September 2026² which offers a framework for the design and approval of compliance solutions to align with requirements of the EU MER, Commission guidance and also international standards for certification and verification programmes (standards which many other EU compliance programmes follow).³ Although the OIES paper does not have regulatory weight, it illustrates the significant technical and institutional work still required for a fully operational compliance market under the EU MER.

Taken together, these developments mean that, while recent guidance has provided some useful direction and a limited degree of breathing space, market participants should not treat the EU MER as a deferred compliance issue. 

Given the EU’s role as the world’s largest LNG importer, and the importance of US LNG to that market, these issues are particularly significant for US LNG companies and the gas producers from which they source their feed gas.⁴

Introduction to the EU MER

The EU MER is designed to increase transparency of methane emissions occurring in the EU’s fossil fuel supply chains and to gradually reduce these emissions. For imports, it imposes compliance requirements with respect to monitoring, reporting and verification (“MRV”) of oil, gas and coal production occurring outside of the EU. In practice, this requires EU importers to look to the ultimate upstream producer (e.g., of the feed gas to the liquefaction terminal for exports of LNG).

In addition to these compliance requirements, the EU MER mandates the Commission to establish a publicly available Methane Transparency Database, which will include the methane performance profiles of all producers, exporters and importers supplying LNG, gas, oil or coal to the EU, both at the country and company level. At the time of writing, the database is scheduled for launch imminently.

What are the key EU MER import requirements for LNG, gas, oil and coal?

The EU MER’s import requirements proceed through four phases, each increasingly more onerous:

Developments in compliance solutions for imports under the EU MER

The Commission’s two July 2026 Recommendations (non-binding guidance statements) on the EU MER’s import requirements were designed to “address difficulties in the implementation of the rules”. They followed a period of criticism of the EU MER from the EU’s trade partners and the oil and gas industry, with many advocating for a “stop the clock” revision (though this has not been accepted and the EU MER remains in effect).⁶

How does the Recommendation on Penalties affect compliance with the EU MER’s import requirements?

The Commission justifies the moratorium on penalties based on security of supply concerns caused by global disruptions to oil and gas flows. However, the Recommendation on Penalties does not suspend the underlying compliance obligation for importers, who would still theoretically be in breach of the law for non-compliance. Even if not subject to financial penalties under the EU MER, this could in some cases have broader adverse reputational impacts.

It is also up to each Member State competent authority to adopt measures, as required under national law, to implement this stay on penalties, which at the time of writing is not yet universally done. Meanwhile, Member States are still encouraged to “incentivise” compliance during this period. 

In practice, importers should not treat the moratorium as a reason to defer efforts towards compliance. Competent authorities, counterparties, and lenders may still expect evidence of good-faith compliance planning, including supply-chain engagement, data collection, verification and contractual pass-through arrangements. Moreover, the three-year hiatus is not an unduly long period in which to establish fully operational compliance solutions.

How does the Recommendation on Compliance Solutions assist compliance with the EU MER’s import requirements?

The Commission states that the Recommendation on Compliance Solutions “brings certainty and clarity to oil, gas and coal importers, suppliers and Member States on how to demonstrate compliance”.⁹

 The Commission clarifies that the EU MER does not require physical tracing of specific molecules, deliveries or cargoes; and it outlines two potential solutions for tracing the compliance claims through the supply chain, from oil, gas or coal production up to the commodity’s import into the EU. 

Importantly, the inclusion of these two compliance solutions in the Recommendation does not change the underlying producer-level compliance obligations (described above). Rather, these compliance solutions describe two possible chain-of-custody systems for tracing compliance proofs as characteristics, or attributes, relating to units of oil, gas or coal.

These two compliance solutions are “trace and claim” and “certification”.

The Recommendation on Compliance Solutions is a good start, but not a complete regulatory architecture for compliance with the EU MER

The EU MER and the Recommendation on Compliance Solutions contrast significantly with other EU compliance markets that rely on the transfer of proofs of compliance (or certificates) through supply chains: most notably for renewable gases and fuels under the Renewable Energy Directive (“RED”). Unlike for the RED, the Commission has not created a definitive and centralised compliance architecture (e.g., for scheme approval, certification, chain of custody and registry solutions). The EU MER leaves it up to the private sector entities establishing themselves as “compliance solution providers” to develop this architecture. 

This raises some practical issues that market participants must keep in mind, particularly when agreeing to the use of any particular compliance schemes or planning compliance activities.

OIES paper on alignment of compliance solutions with international standards

It is in the above context that the authors of the OIES have published their paper: “A Framework on Implementing a Compliance Solution under the EU Methane Emissions Regulation”. 

The paper provides a framework combining requirements stipulated by the EU MER and the Recommendations on Compliance Solutions together with (where those are silent on specific aspects) relevant international principles aligned with the standards of the International Organization for Standardization (ISO), which are commonly cited in other compliance markets. Alignment with these ISO standards is not expressly required by the EU MER or the Recommendation on Compliance Solutions, though it is required under other adjacent EU energy compliance markets, such as those created by the RED. The authors argue that alignment from the outset with these requirements will make EU MER compliance schemes more acceptable to Member States and mitigate the risks of future tightening of the EU MER’s compliance rules, inconsistency in scheme standards and other potential issues. It also describes how the OGMP could establish an independent entity to serve as a compliance solution provider: the logic is that the EU MER recognises the OGMP 2.0 Level 5 standard as automatically compliant with the EU MER’s import requirements (when subject also to independent third-party verification).

The OIES paper’s central point is that, given the absence of architecture for the design and approval of EU MER compliance solutions under the regulation itself, there needs to be consistency in the design and approval criteria applied by Member State competent authorities. It therefore offers competent authorities, compliance solution providers and other market participants an implementable architecture aimed at ensuring consistency and robustness in scheme design and approval. 

Conclusions and next steps

The EU MER requires steps to be taken across the supply chain, up to the ultimate producers of gas, oil or coal. For producers, exporters and importers, understanding which compliance schemes have been approved for demonstrating MRV equivalency and calculating methane intensity will be critical to aligning contractual commitments with the practical realities of this nascent and potentially fragmented compliance market. Stakeholders should therefore consider the status of Member States’ approval of different certification schemes, including whether they are recognised as proof of EU MER compliance, when agreeing to contractual commitments. 

More generally, suppliers of LNG, gas, oil or coal to the EU, or to customers that may ultimately import into the EU, will need to consider carefully what EU MER-compliance contractual commitments they are willing to accept. Meanwhile, EU importers should plan how best to pass through the EU MER compliance requirements into their supply chains, recognising the practical challenges of doing so.

The EU MER is an evolving, complex and increasingly important part of the EU energy regulatory landscape. Although the moratorium on penalties reduces the immediate financial impacts of non-compliance with the rules, the need to comply does not diminish. The next few years will define what EU MER compliance solutions will be acceptable now that the framework of the Recommendation on Compliance Solutions is in place: the activity in designing and piloting this new compliance market is just getting started.