The EU’s new sustainability directive has sparked alarm among key energy suppliers like Qatar and the US, warning that the Corporate Sustainability Due Diligence Directive (CSDDD) could pose a significant threat to the bloc’s energy security and industrial competitiveness. This comes as the EU attempts to replace Russian energy supplies, having shifted from pipeline gas to LNG imports, mainly from the US and Qatar, since the start of the Ukraine-related sanctions campaign in 2022.
In an open letter to Brussels, Qatar’s Energy Minister Saad bin Sherida Al Kaabi and US Secretary of Energy Chris Wright warned that the directive could make gas and LNG supplies less affordable and reliable, potentially disrupting deliveries. The CSDDD, set to take effect in 2027, allows EU member states to fine companies up to 5% of their global turnover if their supply chains cause environmental damage or violate human rights.
Qatar, the EU’s second-largest LNG supplier, provided 12% of the bloc’s LNG in 2024, and has threatened to suspend all LNG exports to the EU if Brussels proceeds with its green agenda. The US, which supplied 45% of the EU’s LNG in 2024, also expressed concerns about the directive’s potential impact on energy costs and trade relations.
The directive’s enforcement comes at a critical moment, as the EU seeks to expand its LNG imports to replace Russian gas. The rules could jeopardize the trade deal signed in July between Brussels and then-US President Donald Trump, under which the EU committed to buying $750 billion of US energy by 2028. The EU’s two largest economies, France and Germany, have also indicated their opposition to the proposal.
Before the Ukraine conflict, Russia supplied roughly 40% of the EU’s gas through its pipeline network, much of it via Nord Stream beneath the Baltic Sea. The conduit was severely damaged by underwater explosions in 2022, widely regarded as sabotage. The EU’s push to diversify its energy sources has led to increased reliance on LNG imports, but the CSDDD’s potential impact on supply chain costs and reliability has raised significant concerns among key suppliers.