European gas pipeline companies report less than 1% of their emissions
European gas pipeline companies, known officially as transmission system operators (TSOs), report less than 1% of their emissions on average because of a climate accounting loophole that lets them obscure their environmental impact from investors.
New research from the Institute for Energy Economics and Financial Analysis (IEEFA) finds that a lack of guidance from standard-setter the Greenhouse Gas Protocol allows pipeline companies to not report emissions from the final use of gas they transport.
This “transported emissions” ambiguity means that investors may gain the false impression that these gas TSOs are low-carbon entities which are somehow separate from the fossil fuel value chain and its risks — when in fact they are its crucial “midstream” link.
This creates potential for greenwashing and unpriced risk at the financial institutions that serve these gas pipeline companies, as these indirect emissions effectively remain off the books.
“This fundamental flaw in climate accounting distorts the market by enabling gas pipeline companies to attract capital that might otherwise flow to greener investments,” said Arjun Flora, energy finance analyst at IEEFA and author of the report.
“The broader risk is that this loophole ultimately delays the electrification of gas-consuming sectors and the transition away from fossil fuels.”
The report covers six European gas pipeline companies, none of which report transported emissions: Enagás, Fluxys, Gasunie, NaTran, Open Grid Europe and Snam. Collectively they own and operate over 100,000km of gas pipelines and more than half of the EU’s liquified natural gas terminals.
IEEFA estimates these six companies’ total transported emissions to be 700 million tonnes of carbon dioxide annually — similar to the greenhouse gas emissions of Germany, the EU’s largest economy.
These companies’ transported emissions are on average about 150 times larger than their total reported emissions.
The TSOs cite the technicality that they do not own or sell the gas as justification for not reporting transported emissions.
“This contradicts gas pipeline companies’ marketed role as energy transition partners committed to reducing emissions by shifting to low-carbon gas networks. They are not merely neutral transporters of third-party gas, but powerful corporate actors that actively shape European energy policy,” said Flora.
“It follows logically that these companies should fully recognise downstream emissions from the gas they transport in their Scope 3 emissions. That they do not — despite clear guidance from disclosure experts CDP and target-certifier the Science Based Targets initiative — should give stakeholders cause for concern.”
The report finds that there has so far been insufficient pressure on gas pipeline companies to improve their transparency.
This is partly because of contradicting advice from the Greenhouse Gas Protocol, as well as the delay of sector-specific European Sustainability Reporting Standards.
In IEEFA’s view, closing the transported emissions loophole would enable gas pipeline companies to demonstrate their progress, as they work towards realising their shared vision of a low-carbon gas network supporting Europe’s energy security.
Flora said: “Reporting these emissions would add significant credibility to gas pipeline companies’ transition plans, financing frameworks and business strategies when communicated to financial markets, regulators and the public.”
Read the report: https://ieefa.org/resources/pipelines-uncertainty-need-full-emissions-transparency-europes-midstream-gas-sector
Source
IEEFA (Institute for Energy Economics and Financial Analyses) 2025
