Exxon and QatarEnergy Threaten Exit from EU Due to Strict Climate Plans

If the EU does not soften the Corporate Sustainability Due Diligence Directive (CSDDD), two key suppliers of LNG are considering suspending their operations in the European market. They state that the requested climate plans and accountability for entire supply chains, even outside the EU, are unrealistic and commercially unsustainable.

At the margins of the ADIPEC energy conference in Abu Dhabi, executives from ExxonMobil and QatarEnergy sent a clear message to Brussels. If the new European rules on sustainable due diligence are not softened, they will consider withdrawing from the European market and/or suspending liquefied natural gas deliveries.

Darren Woods, CEO of Exxon, warned that the Corporate Sustainability Due Diligence Directive ‘in its current form would have devastating consequences.’ According to the directive, all companies operating in the EU would have to systematically manage the risks of human rights and environmental violations throughout their supply chains and develop climate transition plans aligned with the Paris Agreement goal of 1.5 °C. Additionally, the regulation foresees significant penalties of up to 5 percent of global revenue for serious breaches of obligations.

– If we have to meet requirements not only for European business but practically for everything we do anywhere in the world, it becomes unfeasible – Woods stated, alluding to the ‘extraterritorial reach’ of the rules.

A similar message was sent by Qatar’s Minister of Energy and CEO of QatarEnergy Saad al-Kaabi. He stated that the company has prepared ‘contingency plans’ in case of a suspension of deliveries to Europe:

– We cannot reach net zero in the way this regulation demands, and that is just one of many contentious points. Europe must be aware that it needs Qatari and American gas. This is a matter of supply security – said Saad al-Kaabi.

Serious Threat

ExxonMobil and QatarEnergy are among the largest suppliers of the EU’s LNG. Following the disruption of most Russian deliveries in 2022, Europe has relied on American LNG (about half of imports in 2024) and Qatar (12-14 percent share). Exxon also states that it has invested around 20 billion euros in Europe over the last decade, while QatarEnergy has long-term contracts with European oil and gas companies.

This translates to the fact that any serious disruption in relations with these two suppliers would be felt in the price and availability of gas in the EU, amid an already fragile energy balance.

What CSDDD Demands

The Corporate Sustainability Due Diligence Directive requires a supply chain due diligence, systematic identification, prevention, and remediation of harm to human rights and the environment, including suppliers and subcontractors. It also includes a climate transition plan aligned with 1.5 °C, with clear targets and governance authorities. Furthermore, penalties are significant, and there is potential civil liability for damages and activities outside the EU if they are related to business in the single market.

The industry primarily disputes the obligation of ‘de facto global’ application and claims that the requested climate pathways in certain sectors are technically unfeasible within the set deadlines.

Politics and Energy Under One Roof

Both Washington and Doha, industry sources indicate, have recently urged European leaders to reconsider the regulations due to potential implications for supply security and energy prices. The European Parliament has agreed to further negotiations on amendments, aiming to finalize the text by the end of the year.

The message is similar from both sides, but the tone is different. The EU aims to strengthen corporate responsibility and accelerate the climate transition through legally binding mechanisms. Energy companies, on the other hand, warn of ‘regulatory overreach’ that could paradoxically jeopardize investments, supply, and the pace of decarbonization.

If a compromise is reached, clearer delineation of obligations, proportionality according to size and sector, and more precise phasing of climate requirements are expected. Otherwise, an energy war of nerves could spill over into the market, through risk premiums, more expensive contracts, and more volatile gas prices.

– We want to serve Europe, but under fair market conditions – concludes al-Kaabi.

Brussels now must decide where to draw the line between ambition and feasibility, and do so before winter reminds us once again how political energy truly is.