Exxon is considering the sale of chemical production facilities in Europe, after the European Union sealed a controversial tariff deal with President Trump that will increase the burden on businesses operating in Europe.
Intense competition from China is another reason for the move, the Financial Times reported, citing sources in the know. The sources said the facilities considered for sale are located in Belgium and the UK. The publication noted that other chemical producers have also started to pull out of Europe amid the worsening business environment.
Said environment features often excessively high energy prices and a growing burden of environmental regulation aimed at stimulating businesses to adopt emission-reduction measures in their operations. These measures, however, add to costs. According to the sources who spoke to the Financial Times, Exxon was also considering simply shutting the chemical plants down.
Exxon has been increasingly vocal in its criticism of European Union energy policies. In its latest Global Outlook, the supermajor dedicated a special section to Europe, calling it “Lessons from Europe” and detailing the EU’s path from a competitive business region to a place notorious for its red tape and energy prices, plus a disgruntled population.
Earlier this year, Exxon decried the EU’s latest in the area, the Corporate Sustainability Due Diligence Directive, which chief executive Darren Woods described as “bone-crushing penalties”. Indeed, the CSDDD places a heavy burden of responsibility on large corporations operating in the EU to make sure that nowhere in their operations are there abuses of human rights, adverse impacts on the environment, and anything else that goes counter to the EU’s sustainability goals, which it wants to become the goals of all large companies with EU operations.
“It is going to tangle them up in more bureaucratic red tape in Europe… and subject [companies] to bone-crushing penalties, so that’s a big issue that is yet to be addressed, and hopefully will as part of these [trade] negotiations,” Woods said in August.
By Irina Slav for Oilprice.com
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