Proof, Not Promises: Why Trace and Claim Must Guide the Future of Methane Reporting

Access to global energy markets is about to be redefined, not by price or supply, but by trust. In the European Union, new methane regulations will soon require proof of emissions performance, not just promises. Exporters who can prove their emissions data will lead the way, while others may be shut out as transparency becomes essential.

For years, methane has been a massive but silent threat to the climate. Pound for pound, methane traps more heat than carbon dioxide and is driving a significant portion of near-term climate change. Most policymakers know this, which is why the European Union is tightening regulations on emissions tied to energy imports.

Why This Matters

The EU’s methane regulations are designed to drive accountability across the natural gas sector. Starting in 2027, importers must demonstrate that the gas they’ve delivered meet methane monitoring requirements equivalent to those in Europe, and by 2028 they must report methane intensity associated with production. For suppliers and exporters, this need for proof means a data-driven shift: Climate claims must be grounded in transparent, verifiable data.

Europe has made clear that it wants proof, not promises. Climate pledges are no longer enough; regulators and markets now demand evidence.

Despite geopolitical changes, the fact that regulation is coming is not in question. It may take different forms, but it is inevitable. Those that can deliver credible proof will retain access to Europe’s lucrative market, and those that cannot will be sidelined. In other words, market access is no longer just about price or supply but about establishing trust through verifiable data.

What remains unsettled, however, is how best to prove compliance. The stakes are not abstract: The credibility of climate commitments and the competitiveness of global gas exporters both hinge on whether emissions reporting is verifiable or riddled with loopholes.

The Options on the Table

At the center of the debate, there is a choice between two existing proposals: Trace and Claim and Book and Claim, as described below.

Book and Claim is the simplest route but a weaker link to reality. It allows buyers to purchase certificates representing emission reductions from somewhere else, much like buying carbon or water offsets. The gas itself isn’t cleaner; the buyer is simply claiming credit for an unrelated reduction detached from the actual performance of the supply chain.

Trace and Claim takes an opposing approach. It’s certifying performance, not just punching a ticket for compliance. Through transaction-level tracking, emissions data is tied directly to the purchase and delivery of gas itself, and environmental performance remains connected to specific deliveries, rather than being abstracted into detached credits. This creates a chain of custody that regulators and investors can trust. It also creates strong incentives for producers to actually reduce emissions, since their performance is visible and inseparable from the product they sell. In this model, climate claims become quantified proof, not just an accounting exercise.

Think of it this way: Book and Claim is like buying a gym membership and saying you worked out, while Trace and Claim is like sharing your workout log, heart rate data, and gym check-ins to prove you actually did. One is the appearance of action; the other verifies real performance.

The difference matters. One system is built on paper transactions; the other rewards actual emissions reductions.

Why Trace and Claim Is the Smarter Path

While critics might argue that the Trace and Claim approach is too complex to implement across global supply chains, it’s simply a myth, because it’s already happening. When stakeholders align on using the best available data throughout the supply chain, Trace and Claim becomes not only possible, but practical. Thanks to today’s immutable data fabrics, provenance ledgers, and AI-driven monitoring platforms, that data can now be fully verifiable at scale.

Some have expressed concern that the Trace and Claim approach could be too complex to implement across global supply chains. While the challenge is real, it’s been shown to be achievable. As stakeholders align around common standards and use the best available data, Trace and Claim becomes both practical and scalable. Advances in immutable data fabrics, provenance ledgers, and AI-driven monitoring platforms, are making supply-chain verification more transparent and verifiable than ever before.

The payoff is clear:

• Integrity: Real gas is matched to real emissions data, eliminating opportunities for flawed claims.

• Incentives: Producers have a financial reason to cut methane, because lower-emissions gas can secure premium market access.

• Trust: Regulators, investors, and end-user customers gain confidence that climate commitments are more than marketing and not greenwashing.

The EU has signaled that its intent is to drive real climate impact. Trace and Claim aligns with that intent.

Different Markets, Different Supply Chains

Consider this in practice. In much of the Middle East and Africa, state-owned companies control the gas supply chain from wellhead to ship. This vertical integration makes it relatively straightforward to track emissions back to their source. If a national company reduces methane, the result can be demonstrated with minimal friction.

The United States is different. There are thousands of producers, countless gathering systems, interstate pipelines, and complex trading hubs. By the time gas reaches an LNG export terminal, it will have passed through multiple owners and been blended with supply from multiple producers. While this may seem to make it impossible to track, tempting suppliers to take shortcuts, in fact it makes trace and claim essential. It is the only way credible emissions quantification can be tied to gas shipments, and without it, U.S. exporters risk being locked out of the European market simply because they cannot demonstrate provenance with confidence.

What’s at stake isn’t just regulatory compliance, it’s competitive advantage. If Europe sets the global standard for trusted energy data, exporters that adopt Trace and Claim will unlock new market opportunities, while those that resist risk being left behind.

The Path Forward

Implementing trace and claim requires three key ingredients:

1. Secure registries that record each transaction and immutably preserve the link between gas and emissions attributes.
   
2. Robust monitoring, reporting, and verification (MRV), from satellites to sensors, to provide the underlying data.
   
3. Scalable platforms that make it simple for producers, traders, and buyers to participate without reinventing processes.

These are not theoretical. Context Labs, together with its customers and partners, is already delivering tools that make the Trace and Claim approach practical today. By integrating immutable data platforms, supply chain participants can create auditable, trusted records that travel with the gas. This lays the foundation for an infrastructure of trust across the energy ecosystem.

Proof, Not Promises

Europe has made clear that it wants proof, not promises. Climate pledges are no longer enough; regulators and markets now demand evidence. Book and Claim may seem like an easy option, but it will not stand up to scrutiny. Trace and Claim, on the other hand, ensures that methane rules drive real emissions reductions, while giving exporters a clear path to maintain and expand access to global markets.

The choice is clear: Rely on certificates that risk undermining credibility or adopt systems that connect product and performance in ways regulators, investors, and customers can trust. With technology in place to make Trace and Claim achievable today, the path forward is clear.

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