Qatar and US Ask EU to Change Rules on LNG Trade

Post by : Saif Nasser

Oil-rich Qatar and the United States have together asked the European Union (EU) to rethink new corporate sustainability rules that they believe could harm the flow of liquefied natural gas (LNG) to Europe.

The two countries warned that the EU’s plan, known as the Corporate Sustainability Due Diligence Directive (CSDDD), could make it harder and more expensive for energy companies to supply gas to European homes and industries.

A Warning Letter to the EU

According to a statement from QatarEnergy, Qatar’s Energy Minister Saad al-Kaabi and U.S. Energy Secretary Chris Wright sent a joint letter to all EU leaders. In the letter, they said the new rules could “hurt the affordability and reliability” of energy supplies across Europe.

They also warned that the law could damage Europe’s ability to grow and stay competitive in the global economy. The message was clear — if Europe makes it too difficult for energy companies to do business, both Qatar and the U.S. might limit their gas exports to the region.

What the EU Rules Say

The EU’s new sustainability directive aims to make big companies more responsible for human rights and environmental issues in their supply chains. This means that companies doing business in the EU must check where their materials come from and make sure they are not linked to pollution, forced labor, or other harmful practices.

If companies fail to do so, they could face financial penalties.

The European Commission, which is the EU’s main executive body, has not yet responded to Qatar’s statement or the letter from the U.S.

Qatar Says Changes Are Not Enough

Recently, the European Parliament’s legal committee agreed to soften some parts of the proposed law after strong pushback from large companies that said it would be too costly.

However, Qatar’s Energy Minister Saad al-Kaabi told Reuters that these changes were not enough to solve the main problems. He said the current version of the law could still make it nearly impossible for Qatar to trade LNG with Europe.

“Unless more changes are made, Qatar will not be able to continue supplying Europe with LNG,” he said.

Europe’s Dependence on Qatar and the US

Since Russia’s invasion of Ukraine in 2022, Europe has been buying more LNG from Qatar and the United States to replace Russian gas.

Qatar currently provides between 12% and 14% of Europe’s LNG needs. The country has signed long-term contracts with several major energy companies, including Shell in the United Kingdom, TotalEnergies in France, and ENI in Italy.

Analysts say Europe could import up to 160 additional LNG shipments this winter due to lower gas storage levels and reduced pipeline flows from Russia and Algeria. This would make Europe even more dependent on U.S. and Qatari gas supplies.

A Risk to Energy Security

Both Qatar and the U.S. argue that the EU’s rules could create serious risks to energy security, especially during winter when demand for gas is highest.

The letter from the two countries warned that the sustainability directive, while well-intentioned, could end up “hurting ordinary households and small businesses” by raising energy prices and limiting supply.

Experts also note that if energy exporters like Qatar find it too difficult to meet the EU’s strict rules, they might focus more on Asian markets such as China, India, and Japan, where demand for LNG is also strong.