ExxonMobil Warns EU Sustainability Law Could Force Its Exit from Europe
U.S. energy giant ExxonMobil has warned that it may be forced to withdraw from the European Union if the bloc does not ease its upcoming Corporate Sustainability Due Diligence Directive (CSDDD) — a law that could fine companies up to 5% of their global revenue for violations.
Speaking on Monday, CEO Darren Woods said the new rules, which require companies to identify and fix human rights and environmental issues throughout their supply chains, would make it nearly impossible for ExxonMobil to continue operating profitably in Europe.
“If we can’t be a successful company in Europe — and especially if the EU tries to apply this harmful legislation globally — it becomes impossible to stay there,” Woods told Reuters during the ADIPEC energy conference in Abu Dhabi.
The law is designed to give investors greater transparency into corporate supply chains and hold companies accountable for environmental or human rights violations, even outside the EU. But critics say it could hurt competitiveness and drive companies away from Europe altogether.
Overregulation Concerns
Woods said ExxonMobil is working to raise awareness about what he called the “disastrous consequences” of the legislation if it passes unchanged. He noted that although European lawmakers have listened to business concerns, no meaningful amendments have been made so far.
“If anything, the revisions make the law even riskier by increasing room for interpretation,” Woods said.
The European Parliament recently agreed to negotiate final adjustments to the law, with the European Union aiming to approve the final version by year-end.
“Europe is already an overregulated economy,” Woods added. “It’s de-industrialising and choking economic growth — and this law will only tighten that noose.”
Global Pushback from Energy Producers
The United States and Qatar have also voiced opposition to the proposed rules. Both warned that the law could endanger Europe’s access to reliable and affordable energy.
Qatar, which supplies roughly 12% to 14% of Europe’s liquefied natural gas (LNG) since the 2022 Russian invasion of Ukraine, has threatened to cut LNG deliveries unless the EU reconsiders the legislation.
While some countries seek revisions, ExxonMobil and other energy companies are calling for a complete withdrawal of the policy, warning it could accelerate the exodus of businesses from Europe and damage the region’s industrial base.
ExxonMobil’s Return to Iraq
Separately, ExxonMobil recently signed an agreement with Iraq to help develop the Majnoon oilfield and expand the country’s oil exports — marking the company’s return after a two-year absence.
Woods said the details are still being negotiated, particularly regarding payment structures and profit-sharing terms, but expressed optimism that the deal aligns with industry standards.
