The U.S. and Qatar have released an open letter sent to the leaders of EU member states expressing “deep concern” over the Corporate Sustainability Due Diligence Directive (CSDDD), the EU’s new law requiring companies to address their negative impacts on human rights and the environment across their value chains, and warning of consequences to trade and energy supply if the new law is not repealed or significantly watered down.
The warning comes despite recent agreements by lawmakers in both the EU Parliament and Council as part of the EU’s Omnibus initiative to significantly reduce the scope and obligations of the CSDDD, which, if adopted will restrict its application to only the largest companies, and ease requirements around the implementation of climate transition plans.
In the strongly worded letter, however, signed by Qatar’s Minister of State for Energy Affairs, Saad Sherida al-Kaabi, and U.S. Secretary of Energy, Chris Wright, the U.S. and Qatar said that the Omnibus proposal “falls grossly short” of addressing their concerns, and warned that the CSDDD “will cause considerable harm to the EU and its citizens.”
The government representatives added that the CSDDD will “seriously undermine the ability of the American, Qatari, and broader international energy community to maintain and expand their partnerships and operations within the EU.”
The U.S. and Qatar are major energy suppliers to European countries, providing over 16% and 4%, respectively of the EU’s gas, and 45% and 12%, respectively of its LNG in 2024. The letter specifically called out the CSDDD’s “unintended consequences for LNG export competitiveness and the availability of reliable, affordable energy for EU consumers.”
The CSDDD was initially proposed by the European Commission in February 2022, setting out obligations for companies to identify, assess, prevent, mitigate, address and remedy impacts on people and planet – ranging from child labor and slavery to pollution and emissions, deforestation and damage to ecosystems – in their upstream supply chain and some downstream activities such as distribution and recycling.
The legislation was adopted in May 2024, but only after a long process that ultimately required revisions in the legislation that significantly scaled back the number of companies covered by the law, and extended the timeline to its full implementation.
The EU Commission’s Omnibus process, launched in February 2025 and aimed at significantly reducing the sustainability reporting and regulatory burden on companies, proposed a series of changes to the CSDDD, including delaying its application and shifting the regulation’s focus to direct suppliers. Negotiations in the EU Parliament and Council have resulted in positions targeting much more significant cuts to the CSDDD, including raising its threshold to cover only companies with 5,000 employees and more than €1.5 billion in revenues, from its prior 1,000 employees threshold, and retaining an obligation to adopt and report on transition plans, but removing references to requirements to implement the plans.
Despite the proposed changes, however, the letter said that the Omnibus doesn’t go nearly far enough, and urges the EU state leaders to either repeal the CSDDD entirely, or remove several key provisions, including those applying the regulation to entities outside the EU, the requirement for climate transition plans, and the penalties included in the regulation.
The communication also said that many European companies have expressed concerns about the CSDDD, citing a recent letter signed by the CEOs of 46 major companies against the regulation. Notably, however, several of the companies included in the letter have reportedly distanced themselves from it, stating they did not actually participate in it, and reiterating their support for the CSDDD.
Warning of risks to the EU’s energy security and trade relationships from the CSDDD, the U.S. and Qatar letter adds that implementing the law “could jeopardize existing and future investments, employment, and compliance with recent trade agreements.”
