Qatar threatens to halt gas exports to EU over new sustainability legislation

Qatar has warned that it will halt gas exports to the European Union if penalties are imposed under the bloc’s new sustainability due diligence legislation, according to Qatari Energy Minister Saad Sherida al-Kaabi.

The law, which will come into effect in 2027, allows countries to impose fines of up to 5% of a company’s annual revenue. Approved in May 2024, it is part of the EU’s broader goal of achieving net-zero greenhouse gas emissions by 2050.

“If I lose 5% of profits on supplies to Europe, I won’t supply there. I’m not bluffing. 5% of QatarEnergy’s revenue is 5% of Qatar’s state revenue. This is people’s money, so I can’t afford to lose it. No one can accept such a loss,” al-Kaabi told The Financial Times, as reported by News.Az.

He also noted that ensuring compliance with labor laws for all QatarEnergy suppliers is extremely difficult, and that the company, due to its specialization, cannot meet the EU’s zero-emissions targets.

The new law could also impact Qatar’s fertilizer and petrochemical exports to the EU, as well as its Sovereign Fund investments. However, al-Kaabi clarified that existing LNG contracts will not be terminated and said a compromise could be reached if penalties are applied only to the portion of revenue from European sales rather than the company’s total revenue.

Qatar, one of the world’s largest LNG exporters, has become increasingly vital to Europe, especially following the Ukrainian crisis. QatarEnergy has signed long-term LNG supply agreements with Germany, France, Italy, and the Netherlands.