Qatar threatened to cut EU LNG supplies over sustainability law, letter shows

By Kate Abnett

BRUSSELS (Reuters) -Qatar has threatened to cut gas supplies to the European Union in response to the bloc's due diligence law on forced labour and environmental damage, a letter from Qatar to the Belgian government, seen by Reuters, showed.

Qatar is the world's third-largest exporter of liquefied natural gas (LNG), after the United States and Australia. It has provided between 12% and 14% of Europe's LNG since Russia's 2022 invasion of Ukraine.

In a letter to the Belgian government dated May 21, Qatari Energy Minister Saad al-Kaabi said the country was reacting to the EU's corporate sustainability due diligence directive (CSDDD), which requires larger companies operating in the EU to find and fix human rights and environmental issues in their supply chains.

"Put simply, if further changes are not made to CSDDD, the State of Qatar and QatarEnergy will have no choice but to seriously consider alternative markets outside of the EU for our LNG and other products, which offer a more stable and welcoming business environment," said the letter.

A spokesperson for Belgium's representation to the EU declined to comment on the letter, which was first reported by German newspaper Welt am Sonntag.

The European Commission also received a letter from Qatar, dated May 13, a Commission spokesperson told Reuters, noting that EU lawmakers and countries are currently negotiating changes to the CSDDDD.

"It is now for them to negotiate and adopt the substantive simplification changes proposed by the Commission," the spokesperson said.

Brussels proposed changes to the CSDDD earlier this year to reduce its requirements - including by delaying its launch by a year, to mid-2028, and limiting the checks companies will have to make down their supply chains.

Companies that fail to comply could face fines of up to 5% of global turnover.

Qatar said the EU's changes had not gone far enough.

In the letter, Kaabi said Qatar was particularly concerned about the CSDDD's requirement for companies have a climate change transition plan aligned with preventing global warming exceeding 1.5 celsius - the goal of the Paris Agreement.

"Neither the State of Qatar nor QatarEnergy have any plans to achieve net zero in the near future," said the letter, which said the CSDDD undermined countries' right to set their own national contributions towards the Paris Agreement goals.

In an annex to the letter, also seen by Reuters, Qatar proposed removing the section of CSDDD which includes the requirement for climate transition plans.

Kaabi is also chief executive of QatarEnergy. Qatar Energy gas has long-term supply contracts with major European companies, including Shell, TotalEnergies and ENI.

(Reporting by Kate Abnett; Editing by David Holmes)