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US and Qatar Warn EU That Due Diligence Law Could Threaten LNG Supplies

/ Energy / By

The United States and Qatar have jointly warned the European Union that its planned Corporate Sustainability Due Diligence Directive (CSDDD) could undermine Europe’s energy security, competitiveness, and industrial resilience. The rare joint appeal from the world’s two largest liquefied natural gas (LNG) exporters comes as Brussels faces growing internal and external pressure to rethink its corporate accountability agenda.

In an open letter addressed to EU leaders, U.S. Energy Secretary Chris Wright and Qatari Energy Minister Saad Sherida Al-Kaabi said the proposed rules “pose a significant risk to the affordability and reliability of critical energy supplies for households and businesses across Europe and an existential threat to the future growth, competitiveness, and resilience of the EU’s industrial economy.”

The letter urged the EU to either repeal the directive or substantially revise it, including by removing its application to non-EU companies and eliminating penalties for non-compliance. Under the current proposal, companies operating in the EU could face fines of up to 5% of global turnover if they fail to address human rights and environmental violations in their supply chains.

Al-Kaabi warned last week that Qatar may be unable to continue supplying LNG to Europe under the proposed rules unless significant changes are made. The U.S., now the EU’s largest LNG provider with a 45% share of European imports last year, has echoed similar concerns.

EU Divided Over the Future of the Directive

The U.S.-Qatar intervention came just as the European Parliament voted to reopen negotiations on the due diligence law, scrapping a previously agreed compromise text. Lawmakers from across the political spectrum joined in an unusual coalition to demand further changes — with far-right members calling for a weaker version and Green legislators pushing for stronger environmental protections.

The EU aims to finalize revisions by the end of the year. The debate has exposed deep divisions within the bloc: Germany and France have both proposed abandoning the directive altogether, arguing that it would hurt European competitiveness and drive businesses out of the single market. Spain, by contrast, has defended the policy, saying it is essential to maintain the EU’s leadership on sustainability and human rights.

Pressure from Businesses and Trading Partners

Major energy and industrial firms — including ExxonMobil — have urged the EU to go further than the current review process and fully withdraw the directive. They warn that the compliance requirements could deter investment and push companies to relocate outside Europe.

The European Commission, while acknowledging growing concern, has insisted that no decision has been made to weaken the directive’s core objectives. A Commission spokesperson said Brussels is discussing Washington’s concerns in ongoing U.S.-EU trade talks, emphasizing that “we have not committed to change the CSDDD or grant U.S. companies more favorable treatment under this regulation or any EU regulation.”

Balancing Climate Goals and Energy Security

The CSDDD is a central component of the EU’s broader push to make companies accountable for their environmental and social impact — part of its wider Green Deal framework. Supporters argue that it is a necessary tool for ensuring global supply chains respect environmental and human rights standards.

However, critics warn that imposing strict obligations on fossil fuel producers could discourage essential investments in energy infrastructure, particularly as the EU continues to phase out Russian gas. Both Washington and Doha argue that the directive risks complicating LNG supply deals at a time when Europe depends heavily on U.S. and Qatari gas to keep prices stable and industry running.

Next Steps

EU officials are now working to balance the bloc’s climate ambitions with its short-term energy and industrial needs. The European Parliament’s decision to reopen negotiations signals that significant amendments — or even a partial overhaul — remain possible before the law is finalized.

For now, Brussels faces a delicate choice: whether to maintain its commitment to corporate sustainability and environmental accountability, or to soften its stance in response to mounting geopolitical and economic pressures from its most important energy partners.

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