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The US and Qatar have warned the EU its trade, investment and energy supplies will be harmed unless the bloc walks back tough new climate and human rights rules.
Washington and Doha said the EU’s Corporate Sustainability Due Diligence Directive poses an “existential threat” to the growth, competitiveness, and resilience of the European economy and will imperil its energy security.
The two countries said the rules — set for debate by EU legislators as early as Friday — would hurt their exports of liquefied natural gas, which became a lifeline for the bloc after Russia’s full-scale invasion of Ukraine in 2022.
“This comes at a critical moment when our countries and companies are striving not only to sustain but to significantly increase the reliable supply of LNG to the EU,” reads a joint letter to EU leaders signed by the US and Qatari energy ministers, seen by the Financial Times.
The letter suggested that the EU rules could also damage the recent trade deal struck in July between the bloc and President Donald Trump, which committed EU states to buying $750bn of US energy by the end of 2028.
“Beyond the direct energy security risks, the CSDDD also threatens to disrupt trade and investments across nearly all the EU’s partner economies. Its implementation could jeopardise existing and future investments, employment and compliance with recent trade agreements.”
The intervention marks a significant potential break between two of the world’s major fossil fuel producers and consumers in the EU, which has tried to accelerate a transition to cleaner energy.
The EU receives about 16 per cent of its gas from the US and 4 per cent from Qatar. On Monday European energy ministers agreed to phase out the remaining 19 per cent of its gas that it buys from Russia by the end of 2027, leaving the bloc in need of alternatives.
The due diligence law is due to be phased in from 2027 and will allow EU members to fine companies whose supply chains harm the environment or human rights up to 5 per cent of global turnover.
EU states and the European parliament are scheduled to start negotiations later this week over potential revisions of the law, which in its current form would apply to non-EU companies with more than €450mn net turnover within the bloc.
This negotiations have sparked a wave of lobbying by industry and governments, with the US arguing that the law’s extraterritorial reach could expose its companies to litigation.
Trump has threatened to impose tariffs on countries his administration accuses of erecting “non-tariff trade barriers”. He has railed against climate change policies and in February ordered a halt to enforcement of a US anti-corruption law barring Americans from bribing foreign government officials.
US energy secretary Chris Wright told the FT last month that EU climate rules could rupture US-EU trade relations. Last week, Qatar’s energy minister Saad al-Kaabi told Reuters that LNG powerhouse QatarEnergy, which he leads, would not be able to do business in Europe without further changes to the bloc’s sustainability rules.
Some European heads of state, including German Chancellor Friedrich Merz and French President Emmanuel Macron, have also called for the due diligence rules to be shelved.
US oil and gas companies have opposed the directive’s requirement that businesses provide plans outlining how they will cut greenhouse gas emissions in line with the Paris climate agreement.
The joint letter from Wright and Kaabi said the EU and member states must act swiftly to address their “legitimate concerns” over the directive, including its extraterritorial reach, penalties, civil liabilities and energy transition plans.
“We urge EU leaders to take immediate, decisive action by reopening substantive dialogue with your global partners, including the US and Qatar . . . to address these critical provisions in the CSDDD.”
Climate Capital
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