Qatar warns it will halt gas supplies to Europe if fined under EU due diligence law

Qatar warned that it will cease gas exports to the European Union if the bloc's countries impose penalties under recently adopted legislation on sustainability due diligence, Qatari Energy Minister Saad Sherida al-Kaabi told the Financial Times. 

The EU's Corporate Sustainability Due Diligence Directive, which entered into force in July, allows for fines of up to 5 percent of a company’s annual global revenue if the management fails to address adverse human rights or environmental impacts.

“If I lose 5 percent of my revenue by supplying Europe, I won’t supply Europe,” al-Kaabi told the newspaper in an interview published Sunday. “I’m not bluffing,” he added.

Qatar has become a critical supplier of liquefied natural gas to Europe as countries are reducing their reliance on Russian energy following Moscow’s invasion of Ukraine. QatarEnergy, the state-owned energy giant, has long-term LNG supply agreements with Germany, France, Italy and the Netherlands.

Al-Kaabi, who is also the chief executive of QatarEnergy, said the EU legislation would be unworkable for companies like QatarEnergy. 

The Corporate Sustainability Due Diligence Directive has drawn criticism both from within and outside the EU. Countries have to transpose the new rules into national law by 2026 and one year later, in 2027, the rules will start to apply to companies, with a gradual phase-in between three and five years after entry into force.

The directive is part of the bloc’s broader strategy to align corporate practices with its goal of achieving net-zero emissions by 2050.

The European Commission stressed that the directive is in line with international law and that what constitutes adverse impacts under the measure is determined by globally recognized standards.

"Due diligence under the directive is risk-based," the Commission said in a statement. "It only requires companies to take measures that are reasonably available and proportionate to the adverse impacts that have been identified," it said.