Qatar has issued a stark warning to the European Union, threatening to cease its crucial liquefied natural gas (LNG) exports if the bloc enforces stringent new environmental and human rights legislation that could result in substantial financial penalties.
Saad al-Kaabi, Qatar’s energy minister, delivered an unequivocal message during an interview with the Financial Times, stating that Doha would terminate gas shipments to any EU member state implementing penalties under the corporate due diligence directive. The legislation, which mandates fines of up to 5% of a company’s annual global revenue for non-compliance, has sparked significant controversy.
The directive, adopted in May 2023, forms part of the EU’s comprehensive strategy to achieve net-zero emissions by 2050. The requirements extend beyond environmental concerns to encompass human and labour rights standards, creating a complex web of compliance obligations for international businesses.
QatarEnergy, the state-owned energy giant, has emerged as a vital supplier to Europe following the disruption of Russian gas supplies after the Ukraine invasion. The company has established long-term supply agreements with several European nations, including Germany, France, Italy, and the Netherlands.
Mr al-Kaabi emphasised the practical challenges of implementing the directive, noting that QatarEnergy’s global supply chain involves approximately 100,000 companies. The requirement to conduct due diligence on labour practices across this extensive network would necessitate significant additional resources and expenditure.
The Qatari minister suggested room for negotiation exists if penalties were limited to European-generated revenue rather than global earnings. The stance reflects growing tensions between international suppliers and the EU’s ambitious environmental agenda, potentially forcing a reassessment of the bloc’s approach to green legislation enforcement.
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