Qatar and the United States have reached out to leaders of the European Union, expressing their apprehensions over the bloc’s corporate sustainability regulations and how they might affect liquefied natural gas (LNG) exports, as indicated by a statement from QatarEnergy on Wednesday.
Recently, Qatar’s energy minister, Saad al-Kaabi, informed Reuters that Qatar would face challenges conducting business with the EU, including supplying LNG to help meet Europe’s energy needs, unless substantial modifications are made to the Corporate Sustainability Due Diligence Directive.
The correspondence, co-signed by Kaabi and US Energy Secretary Chris Wright, highlighted that the directive “poses a significant risk to the affordability and reliability of vital energy supplies for households and businesses across Europe and represents a grave threat to the future growth, competitiveness, and resilience of the EU’s industrial sector.”
Qatar claims proposed revisions to rules insufficient
The EU regulation mandates that larger firms operating within the bloc must identify and address human rights and environmental issues within their supply chains or risk facing financial repercussions.
The European Commission did not respond immediately to inquiries for comment.
Last week, the legal committee of the European Parliament endorsed proposals to relax the legislation after receiving pushback from businesses; however, Kaabi contended that the adjustments failed to tackle critical issues.
Since Russia’s full-scale invasion of Ukraine in 2022, Qatar has been providing between 12% and 14% of Europe’s LNG. QatarEnergy has secured long-term supply agreements with key energy firms, including Shell from the UK, TotalEnergies from France, and ENI from Italy.
Analysts and data suggest that Europe may need to import up to 160 additional LNG shipments this winter due to reduced storage levels and a drop in pipeline flows from Russia and Algeria. This scenario is anticipated to heighten Europe’s reliance on US natural gas.