Qatar has fired a shot across the bows of EU policymakers by attacking the bloc’s increasing regulatory burden and threatening to look elsewhere for buyers for the volumes of its upcoming LNG expansion phases.

Saad al-Kaabi, the CEO of QatarEnergy and Qatari energy minister, singled out the EU’s Corporate Sustainability Due Diligence Directive (CS3D) at the recent Doha Forum as “making no sense.” He added, “[M]y message to Europe and to the EU Commission is: Are you telling us that you don’t want our LNG into the EU? Because I sure am not going to supply the EU with LNG to support their energy requirements and then be penalized with our total revenue worldwide.”

The CS3D is part of the EU’s ESG framework, which sets mandatory obligations for large companies, including non-EU firms, to check their global value chains for human rights or environmental impact. Its implementation will be applied in stages depending on company turnover, starting in July 2027. Part of the directive obliges, for example, companies to implement a climate change reduction plan ensuring alignment with the Paris Agreement with requirements where appropriate, including absolute emission reduction targets for greenhouse gas for Scopes 1, 2 and 3. Noncompliance could mean fines of up to 5% of a company’s global turnover. While Qatar supports the concept of CS3D, “the issue is how you go about it,” al-Kaabi told the event.

It is still unclear how the CS3D would apply to a company like QatarEnergy or what the firm would need to do to comply with its requirements. It is not clear to what extent the commitments to the Paris Agreements, for example, need to be internalized within the company to pass regulatory muster. It is also not entirely transparent which national authority would impose the penalties.

The EU has operated under the belief that it can drive the global conversation on regulatory standards due to its clout as the world’s largest trading bloc. It believed that the world would have to comply with its standards to access a market of almost 450 million people. However, these lofty ideals were formulated in a world before supplies were scarce and when the affordability and security axes of the energy trilemma did not yet overshadow the sustainability prerogative.

That world, however, is no more. Europe is in dire need of more natural gas to mitigate the mounting energy costs that are strangling its industrial engine. Qatar and other suppliers know this: Doha might be seeking leverage to sell its gas to the EU under its own terms. It could also be moving with the times, as international majors scale back their environmental commitments and the upcoming US presidency of Donald Trump reins in green policies. Whatever the reason, Brussels would be remiss to ignore the red flags. “I think what the EU is doing is really surprising, and I think it will harm them,” al-Kaabi said. “If there is more cost on the company to do this [due] diligence, who ends up paying for it? The customer. This will harm European companies first.”