Qatar threatens to stop supply of LNG due to new European law

Qatar will stop the supply of liquefied gas (LNG) to the European Union if the EU starts to strictly enforce a new European law. Qatari energy minister Saad al-Kaabi said this to the British newspaper Financial Times.

He is referring to the so-called Corporate Sustainability Due Diligence Directive, the law that was adopted by the EU member states earlier this year and is also called the anti-looking away law. It forces companies to tackle problems such as exploitation, modern slavery, environmental pollution and human rights violations in their production chain.

If companies fail to do so, they risk a fine of up to 5 percent of annual global turnover. Civil proceedings can also be initiated.

For large companies, with at least 5,000 employees and an annual turnover of 1.5 billion euros, the new regulations will apply from 2028. For European companies with a minimum annual turnover of 450 million euros and a thousand employees, the rules will apply from 2029.

If an EU country decides to impose a fine on QatarEnergy, the state oil company of which Kaabi is CEO, it says it will stop supplying LNG to all EU countries. The state-owned company is one of the largest LNG exporters in the world and supplies the Netherlands, Germany and France, among others. “If I lose 5 percent of my generated turnover by going to Europe, then I will not go to Europe,” says the energy minister.

“5 percent turnover of QatarEnergy means 5 percent turnover of the Qatari state. This is the people’s money, I cannot lose that kind of amount. No one would accept the loss of that kind of amount.”

Kaabi says that the European law in its current form is unfeasible for companies like QatarEnergy. With the anti-snooping law, the energy company would have to investigate 100,000 companies. “Given our size and the billions we spend, I’m probably going to need a thousand people or pay millions for a service to do checks on every supplier.”

Kaabi says it will not tear up existing contracts, but will look at legal options if large fines are imposed.

However, according to the energy minister, there is also room for a compromise. For example, he would be open to a fine of up to 5 percent on the income generated from Europe. “But it doesn’t make sense if you want to touch my total turnover.”