Today, we focus on the first bulletin: the Energy Ministers of the United States and Qatar jointly sent a letter to the European Union, warning them of the "Corporate Sustainable Development Due Diligence Directive" on switching to clean energy.
U.S. Energy Secretary Chris Wright and Qatar Energy Minister Saad jointly sent a letter to EU heads of state yesterday (October 22) to warn EU companies that the Directive poses a “survival threat” to European economic growth, competitiveness and resilience and will undermine the EU’s industrial competitiveness.
Specifically, the Corporate Sustainability Due Diligence Directive mandates that companies must conduct mandatory human rights and environmental due diligence and develop climate transition plans in line with the Paris Agreement. The regulation stipulates that companies that breach the regulations can be fined up to 5% of their global turnover.
After a new round of conflict broke out in Russia, the EU turned to natural gas from U.S. and Qatar to replace Russian pipeline gas. On October 20, EU energy ministers agreed to phase out 19% of Russian natural gas imports by the end of 2027, making the EU urgent to look for alternative energy sources. At present, Qatar supplies 12% to 14% of LNG to the EU, while as the world’s largest LNG producer, the EU currently supplies about 55% of LNG, and the U.S. and Qatar are expected to make a big profit, waiting to eat the remaining Russian share.
The "Corporate Sustainability Due Diligence Directive" is planned to be implemented in phases from 2027. Qatar Energy Minister Saad has repeatedly warned that if Qatar Energy loses 5% of its revenue due to compliance with the directive, Qatar will withdraw from the European market. "If the directive is not amended, Qatar will have to seriously consider diverting liquefied natural gas and other products to markets outside the EU," he said in a letter to the Belgian government to avoid fines and compliance costs. U.S. Energy Secretary Wright also told the Financial Times last month that EU climate regulations could undermine trade relations between the United States and Europe. ExxonMobil CEO Darren Woods even called the Corporate Sustainability Due Diligence Directive "the worst legislation I have ever seen since I took office."
Until now, the EU has not yet given an official response to the letter. However, the EU’s push for the bill is not so decisive, on the one hand, the directive is a core component of the EU’s green transition, reflecting its long-standing pursuit of sustainable development and its commitments under the Paris Agreement. Internal supporters emphasize that this helps the EU maintain its climate leadership on the international stage. However, the opposition has not only broken the financial path of U.S. energy exporters such as Qatar, but also from the wider corporate community, because the implementation of the regulation is likely to harm corporate profits, increase operating costs and lead to a decline in competitiveness. For example, strong domestic enterprises such as Germany and France have publicly called for simplification of the rules to avoid
Overall, the EU’s position will depend on the final outcome of its internal negotiations, if the internal green forces ultimately prevail, or if the EU chooses to maintain the core clause, but at the moment, it is actually somewhat loose.