Qatar and the US have issued a warning that a forthcoming due-diligence directive could lead to increased energy expenses and interruptions in supply.
Both Qatar and the United States have cautioned that the European Union’s environmental initiatives might present an “existential threat” to the bloc’s energy stability and its ability to compete industrially.
According to reports from multiple news sources on Wednesday, the energy ministers of the two nations – Qatar’s Saad bin Sherida Al Kaabi and US Secretary of Energy Chris Wright – conveyed their concerns to Brussels in an open letter, stating that the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) has the potential to render gas and LNG provisions less economical and dependable.
The US accounted for 45% of the bloc’s LNG supply in 2024. Earlier this year, Qatar, responsible for 12% of the EU’s LNG in 2024, indicated it would halt all LNG exports to the bloc should Brussels advance its environmental policies.
Slated for implementation in 2027, the CSDDD is designed to empower member states to impose penalties on companies, up to 5% of their worldwide revenue, if their supply chains are found to cause ecological harm or infringe upon human rights.
As stated in the document, and reported by the Qatar News Agency, the directive is set to “seriously undermine the ability of the American, Qatari, and broader international energy community to maintain and expand partnerships and operations within the EU.”
These regulations emerge “at a critical moment,” with the bloc actively seeking alternatives to Russian energy, as observed by the Financial Times. Since the commencement of sanctions related to Ukraine in 2022, the EU has transitioned from reliance on Russian pipeline gas to procuring LNG imports, predominantly from the US and Qatar.
Additionally, France and Germany, the two largest economies within the EU, have expressed their opposition to the proposal.
These regulations, slated for deliberation by EU lawmakers later this week, may also imperil the trade agreement inked in July between Brussels and US President Donald Trump, wherein the bloc pledged to purchase $750 billion of US energy by 2028.
Prior to the Ukraine conflict, Russia furnished approximately 40% of the EU’s gas via its pipeline infrastructure, largely through Nord Stream beneath the Baltic Sea. The conduit sustained significant damage from underwater explosions in 2022, an event widely presumed to be sabotage.