ExxonMobil would be forced to quit its business in Europe if the European Union doesn’t materially ease its sustainability regulations that impose penalties on companies in case of non-compliance, chief executive Darren Woods told Reuters on Monday.
Last year, the EU formally adopted the Corporate Sustainability Due Diligence Directive (CSDDD). These new EU-wide rules introduce obligations for large companies regarding adverse impacts of their activities on human rights and environmental protection. The EU directive is part of the bloc’s efforts to align companies with which it trades with the goal of reaching net zero by 2050.
The new regulation also says that companies that are found to be non-compliant on corporate sustainability, including environmental impact, could be fined with 5% of their annual global revenues.
ExxonMobil and other companies, including QatarEnergy, the state firm of the world’s second-largest LNG exporter after the United States, have been pushing back against the EU directive and have slammed the new rules.
“If we can’t be a successful company in Europe, and more importantly, if they start to try to take their harmful legislation and enforce that all around the world where we do business, it becomes impossible to stay there,” Exxon’s Woods told Reuters in an interview on the sidelines of the ADIPEC energy conference in Abu Dhabi.
Under intense pressure from companies worldwide, the European Parliament agreed last month to review the regulation.
Exxon, Qatar, and the United States want profound changes or withdrawal of the policy.
These rules and the EU’s “crusade” toward net zero are a threat to the U.S.-EU trade deal, U.S. Energy Secretary Chris Wright told the Financial Times in September.
Exxon’s Woods has said in a recent interview with Bloomberg that the EU’s directive is “the worst piece of legislation I’ve seen since I’ve been in this job.”
The EU’s efforts to respond to lobbying aren’t yielding concrete results, according to the executive.
“If anything, it’s muddling the language up, and in my mind, opening up the exposure even greater, because you’ve increased the room for interpretation,” Woods told Reuters today.
By Tsvetana Paraskova for Oilprice.com
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