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Do you want our LNG or not? QatarEnergy CEO asks EUDo you want our LNG or not? QatarEnergy CEO asks EU
Qatar Minister for Energy Affairs takes swipe at EU sustainability regulation, penalties, and administrative load.
3 Min Read
Image: QatarEnergy
“My message to Europe and to the EU Commission is: Are you telling us that you don't want our LNG into the EU? Because I sure am not going to supply the EU with LNG to support their energy requirements and then be penalised with 5% of our total revenue worldwide,” HE Saad Sherida Al-Kaabi, Qatar minister of state for energy affairs, and president and CEO of QatarEnergy said at the weekend.
Speaking at Doha Forum 2024, Al-Kaabi said Qatar supports the EU’s aims of protecting and upholding human rights and minimising environmental impact, but that the Corporate Sustainability Due Diligence Directive (CS3D) was not the way to go about it, and the regulation makes “absolutely no sense”.
Qatar was the EU’s third-largest LNG supplier in the second quarter 2024, accounting for 12% of EU imports behind Russia at 19% and the US at 44%. Gas imports are key to the bloc's energy security and have become a focus for member states as they have worked to limit imports from Russia since Russian invasion of Ukraine.
Non-EU companies with a turnover in the EU of over €1.5bn will need to abide by CS3D from July 2027, and from July 2029 the rules will cover companies with EU turnover of above €450m.
Companies affected will need to manage the impact of their business on human rights and the environment, including in their “chain of activities” which includes production of goods and provision of services upstream, and distribution, transport and storage downstream.
Among the requirements, companies will need to make best efforts to align with the Paris Accords on climate change, and have a transition plan for climate change which includes time-bound targets for 2030 and 2050.
“Companies like QatarEnergy, Shell, or ExxonMobil and even car companies like Toyota or GM, will have to say they will abide by the Paris Accords. So, the company will have to commit to Net Zero,” said Al-Kaabi. “For us as QatarEnergy, and with all the expansions we are undertaking, I can assure you we cannot meet Net Zero as a company.”
Failure to comply with CS3D could result in the EU ordering a company to cease certain activities to bring them into compliance, or the imposition of penalties with a maximum of at least 5% of a company’s global turnover in the prior financial year.
Al-Kaabi said QatarEnergy would need a team of “probably a thousand people” dedicated to scrutinising its subsidiaries and their suppliers, “because if there is a nail or a screw that we buy from a contractor who has a subcontractor, we will be responsible for looking into their practices and would get penalised for that.”
The minister warned that investors like the Qatar Investment Authority (QIA) will be worried about the liabilities of the companies they support, and may pull investment from the EU in favour of other regions.
“So, I think what the EU is doing is really surprising, and I think it will harm them. And for companies that will have to comply, will need to put an army of people to do all this diligence. If there is more cost on the company to do this diligence, who ends up paying for it? The customer. This will harm European companies first,” said Al-Kaabi.
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