Qatar has issued a stark warning to the European Union, stating that it will cease gas exports to the bloc if subjected to substantial fines under the EU’s new Corporate Sustainability Due Diligence Directive. This directive mandates that large companies monitor their supply chains for environmental and human rights violations, with penalties reaching up to 5% of global turnover for non-compliance.
Energy Minister Saad Sherida al-Kaabi emphasized the financial implications of such fines, noting that a 5% penalty on QatarEnergy’s global revenue would equate to a significant portion of the nation’s income. He stated that under these conditions, continuing gas exports to Europe would be unfeasible.
The EU’s directive aims to align businesses with its net-zero emissions target by 2050, focusing on carbon emissions, human rights, and labor practices. However, it has faced criticism from various sectors for being overly burdensome. Al-Kaabi highlighted the impracticality of conducting extensive audits across QatarEnergy’s vast supplier network to ensure compliance. He suggested that limiting penalties to revenues generated within Europe could be a more manageable approach.
Qatar is a crucial supplier of liquefied natural gas (LNG) to Europe, especially after the EU’s efforts to reduce reliance on Russian gas. The potential cessation of Qatari gas exports could have significant implications for the EU’s energy security. The European Commission is reportedly considering legislative adjustments to alleviate some of the reporting obligations imposed by the directive.
This development comes amid Qatar’s plans to expand its LNG export capacity significantly by 2027, with a focus on increasing its market share in both Asia and Europe. The country’s stance on the EU directive could set a precedent for other energy-exporting nations facing similar regulatory challenges.
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