Qatar’s Warning on EU Gas Exports Amid Due Diligence Concerns

Qatar has strongly cautioned that it will halt gas exports to the European Union if the bloc enforces a newly introduced law targeting forced labor and environmental harm.

By Archana Rao

Qatar’s Energy Minister Saad al-Kaabi has said that the country will halt gas exports to European Union (EU) if fined under the EU’s new Corporate Sustainability Due Diligence Directive (CSDDD).

The contested legislation obliges large companies operating within the EU to ensure their supply chains are free from forced labor and environmental violations. Companies that fail to comply face penalties of up to 5 percent of their global revenue.

For state-owned or high-revenue companies like QatarEnergy, such penalties could translate into significant financial losses. This has raised concerns among Qatari businesses, which may see these fines as disproportionately impactful given their reliance on energy exports to the EU.

Qatar’s energy strategy amid global regulation

Kaabi, who is also the chief executive of QatarEnergy, in an interview, highlighted the substantial financial implications of the directive, pointing out that such penalties would directly affect QatarEnergy’s revenues, which are integral to the country’s economy. Describing the financial impact as “the people’s money,” Kaabi emphasized that Qatar cannot accept losses of this magnitude and urged the EU to reconsider the law. He underscored that he would not continue exporting gas to Europe under these conditions.

As one of the world’s leading exporters of liquefied natural gas (LNG), Qatar plays a critical role in global energy markets. It is currently expanding its liquefaction capacity from 77 million tons annually to 142 million tons by 2027, positioning itself to increase its market presence in both Asia and Europe amidst intensifying competition from the United States.

Kaabi’s remarks underscore Qatar’s strategic significance in the energy sector and its growing assertiveness in the face of international regulations that could jeopardize its economic interests.

Corporate Sustainability Due Diligence Directive (CSDDD): A legislative overview

The CSDDD is an initiative by the European Union designed to ensure corporate accountability and promote sustainable practices across global supply chains. This legislation imposes substantial obligations on large companies, requiring them to identify, prevent, and address human rights abuses and environmental degradation in their operations and value chains.

Central to the directive is the mandate for businesses to combat issues such as forced labor, child labor, and environmental harm through rigorous due diligence processes. Companies are expected to evaluate their supply chains, ensure compliance with international standards, and implement policies and measures to rectify any detected violations.

The law applies to large corporations both within the EU and to non-EU entities generating significant revenue in the EU market. Entities can be penalized for non-compliance, reaching up to 5 percent of a company’s global turnover.

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• Empowering Qatar’s Private Sector: A Roadmap for 2024-2030 Development
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