Background

Agriculture accounts for 56% of the EU’s methane emissions, yet there are few laws to cut methane emissions from the sector. However, new regulation covering large food companies can support methane emissions disclosures and reductions – but a lot will depend on how it is implemented. It is important to note that besides being a potent greenhouse gas, methane has a significant impact on air quality, human health, crop productivity and biodiversity, as it is a precursor to ground-level ozone.

As the EU seeks to meet its climate targets to reduce net greenhouse gas (GHG) emissions by 55% by 2030, and reach climate neutrality by 2050, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD)4 represent a fundamental shift in how large corporations must measure and manage environmental impacts across their value chains. Despite both policy proposals going through significant ‘simplification’ during the deregulation process in the EU (the omnibus), obligations remain for methane intensive sectors, including meat and dairy, fashion, and retail.

The CSRD, which will target ± 5,000-7,500 companies, will significantly increase the transparency of climate reporting, obligating companies to disclose greenhouse gas (GHG) data including methane. This will entail conducting a ‘double-materiality assessment’ to identify which key areas are important risks for the company, and to report if they have a climate transition plan aligned with the 1.5°C Paris goal. The CSDDD obligates large companies to ensure due diligence on key areas which can be shown to have associated harm to human health and ecosystems. Critically, Article 22 on Climate Transition Plans was removed from the CSDDD during the omnibus process, resulting in a lack of alignment between the two regulations and leaving a critical gap in due diligence for companies, particularly those who identify climate as a material issue under the CSRD.

Nonetheless, environmental considerations and air pollution are included in the CSDDD, providing clear links to methane and its agricultural co-pollutants, as methane is a pre-cursor to tropospheric (ground-level) ozone pollution, negatively impacting human health and damaging ecosystems. According to the Global Methane Assessment, ozone attributable to anthropogenic methane emissions causes about half a million premature deaths every year globally. A more recent analysis by the Climate and Clean Air Coalition (CCAC) and the UN Environment Programme (UNEP) estimated that reducing methane by 32% compared to 2020 levels globally, would avoid over 180,000 premature deaths, and nearly 19 Mt of crop losses annually. According to the European Environment Agency (EEA), reducing ozone levels below WHO’s long-term guideline level would have potentially prevented around 70,000 premature deaths in the EU.

This briefing is based on research conducted by EU social and sustainability consultancy AxHA, utilising desk research from publicly available information, and key informant interviews from relevant policy and company stakeholders.