Qatar, one of the largest exporters of liquefied natural gas (LNG) in the world, has threatened to cut off LNG suppliesto the European Union in response to strict implementation of the EU’s new sustainability directive (CSDDD).
The warning was issued by Saad al-Kaabi, Qatar’s Energy Minister and CEO of QatarEnergy, during an interview with the Financial Times. Al-Kaabi criticized the directive, saying that any fines imposed under the new rules would make it economically unviable to continue supplying LNG to Europe.
“If it turns out that I lose 5% of my income by going to Europe, then I will not go to Europe anymore,” al-Kaabi stated. “This 5% of revenue generated by QatarEnergy also means 5% of revenue for Qatar.”
The Corporate Sustainability Due Diligence Directive (CSDDD), set to take effect in 2027, mandates that large companies operating within the EU must ensure their supply chains comply with human rights and environmental protections.
Under the directive, companies that violate these provisions could face fines of up to 5% of their global annual turnover and may be held liable for damages caused by non-compliance.
This measure has sparked concern among exporters, including Qatar, which supplies nearly one-third of the LNGimported through Belgium’s Zeebrugge terminal. Since the Russian invasion of Ukraine, Europe has increased reliance on LNG imports to reduce dependence on Russian gas supplies.
Qatar’s Energy Minister has been vocal in his opposition to the new EU rules. Earlier this month, al-Kaabi also criticized the Corporate Sustainability Reporting Directive (CSRD), which requires annual sustainability reports from companies operating in the EU. At the time, he issued a similar threat to halt supplies to Europe.
Al-Kaabi argued that the EU’s push for stricter compliance standards threatens business partnerships and creates instability in global energy markets. “This directive is a political move, not an economic one,” he said.
With Qatar being a key LNG supplier to Europe, the threat of supply disruption raises concerns about energy security, especially during winter months when demand is highest. The EU has already faced price spikes and supply challenges following Russia’s energy cutbacks.
Europe has become more reliant on LNG imports since 2022, with Qatar emerging as a major supplier. The Zeebrugge terminal in Belgium handles a significant portion of Qatar’s LNG shipments, highlighting the strategic importance of maintaining these trade relationships.
However, the new sustainability rules reflect the EU’s broader efforts to combat climate change and promote ethical business practices. Critics argue that these measures risk alienating key partners like Qatar, potentially driving them to focus on Asian markets instead.
As the 2027 deadline approaches, both sides face the challenge of balancing sustainability goals with energy security needs. While Qatar may leverage its LNG dominance to resist compliance, the EU is unlikely to backtrack on its green agenda.
Negotiations are expected to intensify, with potential exemptions or adjustments to the rules to avoid supply disruptions. Meanwhile, Qatar is exploring alternative markets, signaling a possible shift in global LNG trade dynamics.
