ExxonMobil has warned it may be unable to continue operating in the European Union unless lawmakers significantly dilute the bloc’s corporate sustainability due diligence regime, which threatens fines of up to 5% of global revenue for breaches.
Chief executive Darren Woods said the company could not remain in a market where the legislation, known as the Corporate Sustainability Due Diligence Directive (CSDDD), was enforced as currently framed.
Speaking on the sidelines of the ADIPEC energy conference in Abu Dhabi on Monday, Woods said ExxonMobil has been lobbying for changes and coordinating with other business leaders. He argued that the draft creates extensive legal exposure through vague language and extraterritorial reach, making compliance impractical for multinationals with complex supply chains.
The CSDDD, which entered into force in 2024, requires companies operating in the EU to identify, prevent and remedy adverse human rights and environmental impacts across their value chains. Enforcement provisions allow national authorities to impose penalties, including fines linked to companies’ worldwide turnover. The European Commission describes the directive as a tool to promote responsible corporate behaviour inside and outside Europe.
Political negotiations are continuing. In October, the European Parliament’s Legal Affairs Committee backed plans to narrow the law’s scope and ease reporting obligations after pushback from industry. Further talks are due before year-end on the final text to be put to lawmakers and member states. Committee communications and reporting at the time indicated support for reducing the number of companies in scope and limiting certain liabilities, although fines of up to 5% of global turnover remained a feature in proposals discussed.
Energy-exporting nations have also intervened. Qatar, a key supplier of liquefied natural gas (LNG) to Europe since Russia’s invasion of Ukraine in 2022, has repeatedly warned that strict enforcement of the EU’s due diligence requirements could jeopardise its ability to sell gas into the bloc. In a July letter, Doha threatened to cut supplies if the regime exposed the state-owned QatarEnergy to punitive measures; Qatari officials reiterated concerns in October, urging a rethink alongside the United States. Qatar supplies roughly 12–14% of Europe’s LNG.
Woods’ comments align with broader complaints from oil and gas producers that the directive introduces legal uncertainty, particularly where companies could be held responsible for alleged abuses deep in third-party supply chains. Industry groups argue that the administrative burden will deter investment and further weaken European competitiveness. Backers of the law counter that clear due diligence rules are necessary to protect rights and the environment and to provide consistent expectations for global firms operating in the single market.
The legislative process has already produced revisions, and additional amendments are under discussion. Parliament signalled in mid-October that negotiators would seek “simpler rules for fewer companies”, reflecting pressure from member states and business. Any settlement would still require agreement among the Parliament, the Council and the Commission.
Beyond regulatory concerns in Europe, ExxonMobil is pursuing growth in the Middle East. The company recently signed an agreement to support development of Iraq’s Majnoon oilfield, marking a prospective return after a two-year hiatus. Negotiations continue on project terms, including a profit-sharing arrangement and mechanisms for payment. Framework under discussion covers crude and refined products and may involve upgrades to southern export infrastructure.
The juxtaposition is striking: a major US energy company signalling potential retrenchment from Europe at the same time as it expands in Iraq and maintains a significant footprint in Qatar and the United States. For European policymakers, the message from producers is that supply security and industrial policy are now closely linked to regulatory design. For ExxonMobil and peers, the calculation is whether compliance costs and legal risks in the EU outweigh access to a large, high-value market.
In the near term, attention will focus on the trilogue negotiations. If lawmakers land on a narrower scope, clearer definitions and more predictable enforcement, parts of the industry may soften their stance. If the final package retains wide liability exposure and high turnover-based fines, companies such as ExxonMobil say they will reassess their presence. The outcome will set an important precedent for how the EU balances its climate and human-rights objectives with energy affordability and investment signals at a time when the bloc remains reliant on LNG imports and is seeking to remodel its industrial base.
EU due-diligence law back on agenda amid US and Qatari concerns
