Exxon and QatarEnergy executives warn Europe of a possible exit due to climate law

ExxonMobil executives and QatarEnergy executives warned on Monday that they may stop doing business in Europe if the EU does not loosen its sustainability law, which could result in fines up to 5% of global revenue.

Exxon CEO Darren Woods said on the sidelines the ADIPEC Meeting in Abu Dhabi, that the EU Corporate Sustainability Due Diligence directive would have "disastrous" consequences if it was adopted in its present form.

The directive requires that companies operating in the EU address risks to human rights and the environment in their supply chains. It also holds companies responsible for any harm caused even outside of Europe.

Woods stated that it would be impossible for Woods to remain in Europe if the company was not successful.

Qatar's Energy minister Saad al Kaabi, who is QatarEnergy CEO, said at the same event that the gas giant had contingency plans if they decided to stop European shipments. Kaabi has warned repeatedly that this threat is no bluff.

'WE CAN'T REACH NET ZERO'

Kaabi, speaking at ADIPEC, reiterated its threat to stop supplying Europe with natural gas liquefied, saying that it would not be able do business in Europe without the EU changing or cancelling the law.

Kaabi said, "We cannot reach net zero. That's among many other requirements."

"I think Europe needs to realize that they need gas from Qatar. He said that they need gas from America. "They need gas from around the globe... It's important that they take this seriously."

Woods stated that the legislation requires large companies such as ExxonMobil to implement climate change plans in line with the Paris Agreement goal of limiting global temperatures to 1.5degC over pre-industrial levels. He described this requirement as being technically impossible.

He said: "I find it astounding that the overreach would not only require us to do this for the business we do in Europe but that I'd have to do it for all of my business, whether or not it touches Europe."

Companies Among Europe's Top Suppliers

ExxonMobil, QatarEnergy and other major LNG suppliers are in Europe's top 10. The U.S. will contribute to roughly 50% of EU imports of American LNG producers by 2024. Qatar has provided between 12%-14% of LNG for the EU since Russia invaded Ukraine in 2022.

Exxon and QatarEnergy both have significant markets in Europe. Exxon said last year that it had invested in the region 20 billion euros (23,32 billion dollars) over the past decade. QatarEnergy also has long-term contracts with Britain's Shell as well as France's TotalEnergies and Italy's ENI.

Two companies, whose gas supplies to the continent increased sharply when Russia cut off its supply, now push the bloc to abandon a part of its green policy.

Last month, the governments of Qatar, the U.S., and Canada urged European leaders to reconsider this law. They said it threatened Europe's reliable, affordable supply of energy.

The European Parliament agreed to continue to negotiate changes to the legislation, and the EU hopes to approve final changes before the end of the year.

"We would love the opportunity to serve Europe." Kaabi stated that "We have always been committed to Europe." We're not asking anything special; we just want to be able to compete on a fair market. (Reporting and writing by Andrew Mills, Editing by Tom Hogue; Louise Heavens, Jan Harvey and Tom Hogue)

(source: Reuters)