Europe’s gas pipeline companies are significantly understating the climate impact of their operations, according to new research from the Institute for Energy Economics and Financial Analysis (IEEFA).
European gas transmission system operators (TSOs) run networks of pipelines, terminals and storage sites that move natural gas across Europe. While they report emissions from their own operations, they usually leave out the much larger emissions created when the gas they transport is eventually burned by the end user.
IEEFA estimates that these ‘transported emissions’ are on average around 150 times larger than TSOs’ combined reported Scope 1, 2 and 3 emissions, yet they rarely appear in company climate reports, meaning investors and the public get an incomplete picture of the sector’s true environmental impact.
In 2022, gas delivered through European TSO networks led to around 800 million tonnes of CO2 emissions, nearly one-third of all fuel-related emissions in the EU.
TSOs argue that they should not have to report these emissions because they do not own or sell the gas — they only transport it, but IEEFA says this reasoning no longer makes sense, especially as gas companies increasingly present themselves as partners in Europe’s clean energy transition.
As demand for fossil gas is expected to fall over time, many pipeline operators have promoted a future in which their networks would carry lower-carbon fuels such as biomethane and hydrogen, as well as captured carbon dioxide. They claim that this would allow their infrastructure to remain useful in a low-carbon economy.
IEEFA counter this by saying that if TSOs want to claim a role in the energy transition, they must also take responsibility for the emissions their networks enable today. International climate disclosure bodies such as CDP and the Science Based Targets initiative have already advised companies to report transported emissions because they are clearly significant.
The lack of clear rules has allowed a reporting gap to persist. Current global emissions standards can be interpreted in different ways, and planned European reporting guidance has been delayed. As a result, TSOs continue to report much smaller emissions, such as business travel or office energy use, while leaving out the far larger emissions from gas use itself.
IEEFA warns that this practice makes gas companies appear far cleaner than they really are, potentially misleading investors and policymakers. The think tank is calling on regulators and investors to require full disclosure of transported emissions, closing what it describes as a major transparency loophole.
Photo: Wolfgang Weiser
Leave a Reply