A recent report by the Institute for Energy Economics and Financial Analysis(IEEFA) reveals a worrying omission in the emissions reporting of Europe’s major pipeline companies. According to the study, these companies, known as transmission system operators(TSOs), report on average less than 1% of the total emissions derived from the gas they transport.
Emission control of gas pipelines in Europe
The research focuses on six major players in the sector: Enagás, Fluxys, Gasunie, NaTran, Open Grid Europe and Snam. The companies operate more than 100,000 km of gas transport infrastructure and control more than half of the liquefied natural gas terminals in the European Union. However, none of them include in their reports the so-called “transported emissions”, i.e. emissions resulting from the end use of the gas they distribute.
This omission is based on a technical interpretation of the Greenhouse Gas Protocol, which does not explicitly require reporting of Scope 3 emissions. Scope 3 emissions emissions when the company does not own or market the gas. As a result, TSOs avoid reporting the bulk of the climate impact associated with their operations.
IEEFA estimates that the emissions linked to the gas transported by these companies amount to 700 million tons of CO2 per year, a figure comparable to Germany’s total annual emissions. by these companies amount to 700 million tons of CO2 per year, a figure comparable to Germany’s total annual emissions. On average, these would be volumes 150 times higher than those currently shown on their sustainability balance sheets.
The lack of transparency generates a significant distortion in the financial markets. Investors may perceive these companies as low environmental impact players, without considering that they represent a link in the fuel value chain.
Energy finance analyst at IEEFA and author of the report, Arjun Flora, warns that this gap in climate accounting not only hurts investor decision-making, but could slow down the electrification of gas-intensive sectors.
Closing this loophole would allow gas transmission companies to align their strategies with European climate commitments and strengthen the credibility of their transition plans.
Flora said.
The study notes that regulatory ambiguity is reinforced by the lack of clear sectoral criteria in the European Sustainability Reporting Standards(ESRS). Although bodies such as CDP and Science Based Targets promote the inclusion of Scope 3 emissions, in practice there is insufficient pressure to force pipeline companies to adopt these criteria.
IEEFA urges European regulators to clarify greenhouse gas protocol guidelines and close loopholes that allow TSOs to exclude key emissions from their reporting.
Source: World Pipelines
Photo: DW