US and Qatar Warn EU Members That CSDDD Threatens Energy Trade Ties

The governments of the United States and Qatar jointly warned EU member state leaders of consequences for energy supply and trade relationships if the Corporate Sustainability Due Diligence Directive is not repealed or significantly weakened beyond the reductions proposed in the EU's Omnibus process. The letter was signed by US Energy Secretary Chris Wright and Qatar's Minister of State for Energy Affairs, Saad Sherida al-Kaabi.

The US and Qatar together supplied over 16% and 4%, respectively, of EU gas imports in 2024, and 45% and 12%, respectively, of EU LNG. The letter stated that the Omnibus initiative's proposed changes to the CSDDD — which would raise the threshold to 5,000 employees and EUR 1.5 billion in revenues and shift to a risk-based due diligence approach — fall grossly short of addressing US and Qatari concerns. The letter specifically called out provisions applying the regulation to non-EU entities, the requirement for climate transition plans, and the penalties included in the legislation.

The communication stated that the CSDDD will seriously undermine the ability of the American, Qatari, and broader international energy community to maintain and expand EU partnerships and operations. The letter called for either full repeal or removal of specific extraterritorial provisions, transition plan requirements, and enforcement penalties. Notably, several of the European company CEOs cited in the letter as opposing the CSDDD subsequently distanced themselves from the communication, stating they had not authorized their inclusion and reiterating support for the directive.

The joint US-Qatar intervention in EU legislative discussions represents an escalation in the use of energy supply leverage to influence EU sustainability regulation. For international companies including those from India with supply chain exposure to the US and Gulf markets, the geopolitical dimension of EU supply chain regulations adds complexity to compliance planning. The trajectory of the CSDDD negotiations — with the Parliament and Council both proposing significant scope reductions — suggests that external political pressure is likely to continue shaping the final form of the regulation beyond purely technical sustainability considerations.

Key figure — US supplied 45% of EU LNG imports in 2024; Qatar supplied 12%