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Summary
- EU wants big companies to focus on sustainability, due diligence
- Qatar and US warn rules pose a risk to EU’s energy supplies
- EU relying more on US, Qatar energy to replace Russian gas
(Reuters) – Qatar and the U.S. have urged the European Union to scale back its corporate sustainability rules and warned that the law risks disrupting liquefied natural gas trade with Europe.
The EU is negotiating changes to exempt more companies from the due diligence law, which requires firms operating in the EU to fix human rights and environmental issues in their supply chains, or face fines of 5% of global turnover.
The European Parliament will vote on Wednesday on whether to proceed with the planned changes or negotiate more. The EU aims to approve the changes by the end of the year.
The rules “pose a significant risk to the affordability and reliability of critical energy supplies for households and businesses across Europe and an existential threat to the future growth, competitiveness, and resilience of the EU’s industrial economy,” Qatar’s energy minister Saad al-Kaabi and U.S. Energy Secretary Chris Wright said in a joint open letter to EU countries’ leaders.
The European Commission did not immediately reply to a request for comment.
QATAR WARNS EU LAW WILL HURT LNG SUPPLIES
Al-Kaabi told Reuters last week that Qatar would not be able to do business in the EU, including supplying Europe with LNG as it races to replace Russian energy, unless more changes are made to the due diligence law.
The EU is also ramping up U.S. imports of LNG to replace Russian supplies. The U.S. was the EU’s top LNG supplier last year, providing 45% of its total supply. Qatar provided 12%, putting it in third place behind Russia.
The corporate sustainability due diligence directive (CSDDD) is a key plank of Europe’s efforts to transition to a cleaner economy, and an attempt to use the EU’s position as a major marketplace to encourage trading partners to do the same.
But the law has met pushback from leaders in Germany and France, while companies including ExxonMobil have demanded the EU withdraws the law entirely, and said it would lead to businesses leaving Europe.
The letter from the U.S. and Qatar asked the EU to reconsider the law’s application to non-EU companies, the penalties for non-compliance, and its requirement for companies to have plans in place to comply with climate change goals.
The changes being negotiated by Brussels do not address these concerns, the letter said.
Reporting by Tala Ramadan and Ahmed Elimam. Editing by Kim Coghill and Mark Potter
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