European Union member states will harm themselves and raise prices for customers under new incoming sustainability rules which require large companies to address negative environmental impacts, Qatar’s energy minister said at the weekend.
Speaking to CNBC at the Doha Forum 2024, Qatar’s minister of state for energy affairs and QatarEnergy president and CEO Saad Al-Kaabi, said the EU needs to review its corporate sustainability due diligence directive, which is slated to come into effect in 2027.
However, Al-Kaabi said he was not too concerned about US president-elect Donald Trump’s intent to lift the Biden administration’s cap on approvals for new LNG export projects as more gas would be needed.
In a one-to-one onstage interview, the minister gave a message to Europe about the corporate sustainability directive, under which companies can be charged penalties of up to 5% of their total revenues if they do not identify and take measures to correct negative environmental impacts from their operations.
While Qatar supports the concept of the directive, he said the issue is how it is going about it, explaining that it will affect any company that deals in Europe and makes more than €450m ($476m) generated in or from the region.
He said this will include companies such as QatarEnergy, Shell and ExxonMobil that will have to commit to net zero.
“For us as QatarEnergy, and with all the expansions we are undertaking, I can assure you we cannot meet net zero as a company.
“I think what the EU is doing is really something surprising,” Al-Kaabi said. “I think it will harm them.”
Companies that have to comply will have to deploy an army of people to do the due diligence, the minister said, and if it puts more cost on him then the customer will pay.
“I think it is completely ridiculous to have such legislation in place and I think the EU needs to review it thoroughly.” He said the new legislation has far-reaching implications that harm EU companies and all those that deal with them.
Al-Kaabi said European economies are “not doing great” and that they will need energy to grow.
But he also told the forum that with the expansions it is making, QatarEnergy cannot meet net zero as a company.
Something wrong here
“Are you telling us that you don’t want our LNG in the EU?” he asked.
“Because I sure am not going to supply the EU with LNG to support their energy requirements and then be penalised with our total revenue worldwide.
“There’s something wrong there.”
Al-Kaabi said Qatar Investment Authority and other global fund managers worldwide would be looking at the EU companies they own, the ones they are considering investing in and how the incoming directive would affect them.
On the incoming Trump administration, Qatar’s energy minister said: “Additional gas is going to be required, whether it is from the US, Qatar or other places.
“So additional LNG and additional competition is welcome.”
Al-Kaabi said that if the US opts to export another 300 mtpa or 500 mtpa, the liquefaction projects which are driven by private enterprises would look at the commercial viability of projects, and there would be a limit.
“It will all depend on supply, demand and the long-term outlook for these companies,” he said. “I don’t worry much about it.”
QatarEnergy is boosting its LNG production to 142 mtpa with its huge North Field Expansion project. Al-Kaabi highlighted that it will also have a further 18 mtpa from the Golden Pass LNG project in the US.
