ExxonMobil’s CEO has issued a stark warning: the U.S. oil and gas giant might be forced to pull out of Europe if the European Union doesn’t soften its ambitious new sustainability rules.
Darren Woods, ExxonMobil’s chief executive, said the company simply couldn’t operate under the current form of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) — a sweeping law that could fine violators up to 5% of their global revenue for failing to monitor and mitigate human rights or environmental risks across their entire supply chain.
Speaking to Reuters on the sidelines of the ADIPEC energy conference in Abu Dhabi, Woods didn’t mince words:
“If we can’t be a successful company in Europe — and if Europe starts trying to enforce that same harmful legislation everywhere else we do business — it becomes impossible to stay.”
A Law Aimed at Accountability — and a Corporate Backlash
The proposed EU directive is designed to increase transparency and responsibility among major corporations. It would require businesses to identify, assess, and prevent human rights abuses and environmental harm, not just in their European operations but across their global activities.
European lawmakers say the goal is simple: ensure that the products and energy consumed in Europe don’t come at the cost of labor exploitation or environmental destruction elsewhere. But for global companies like ExxonMobil, that kind of oversight reaches much farther than Brussels.
Woods argued that the legislation goes far beyond reasonable compliance. The law, he said, obligates companies to create climate transition plans consistent with the Paris Agreement’s goal of keeping global warming below 1.5°C — something he called “technically unfeasible.”
“What’s astounding,” Woods said, “is that it doesn’t just apply to our European operations. It effectively tells me how to run every part of my business, worldwide.”
Energy Industry Pushback Builds Momentum
ExxonMobil is hardly alone in opposing the law. Woods said the company has been lobbying aggressively against the directive and urging other energy leaders to do the same.
“We’re going to continue rallying business leaders around the world to push back against this legislation,” he said. “If it passes in its current form, the consequences could be disastrous for industry and energy stability.”
Despite growing pushback, Woods said so far, European lawmakers have made little progress in softening the proposal. “They’re listening,” he noted, “but instead of clarifying, they’re muddying the language — and that just increases the risk.”
The European Parliament voted last month to continue refining the law, with the EU aiming to finalize and approve it by the end of the year.
Woods warned that if the current draft becomes law, it could deepen Europe’s ongoing economic slowdown. “It’s already an overregulated economy,” he said. “This would just add another layer of restrictions and further choke off growth.”
Qatar Joins in the Criticism
ExxonMobil isn’t the only energy heavyweight pushing back.
Qatar, one of the world’s largest exporters of liquefied natural gas (LNG), has also criticized the directive, calling it unrealistic and potentially damaging to Europe’s energy security.
Speaking at the same ADIPEC event, Qatar’s Energy Minister Saad al-Kaabi, who also heads QatarEnergy, warned that his country could halt gas supplies to Europe if the EU doesn’t revise or cancel the law.
“We can’t reach net zero under these conditions — and that’s just one of several impossible requirements,” al-Kaabi said.
He added that Europe still relies heavily on imports for its energy needs. “They need gas from Qatar. They need gas from the U.S. and from many parts of the world. Europe should think very carefully before it makes this mistake.”
Since Russia’s invasion of Ukraine in 2022, Qatar has supplied roughly 12–14% of Europe’s LNG, becoming a crucial partner in the continent’s efforts to reduce its dependence on Russian gas.
But with both U.S. and Middle Eastern producers voicing concern, Brussels faces increasing pressure to strike a balance between sustainability goals and energy realities.
Exxon’s Next Moves — Eyes Back on Iraq
Even as it clashes with European regulators, ExxonMobil is expanding its reach elsewhere.
Last month, the company signed an agreement to help develop Iraq’s massive Majnoon oilfield, marking a return to the country after a two-year hiatus.
According to Woods, Exxon is still negotiating the project’s key details, especially regarding how it will be compensated. “We’ve got a long way to go to finalize the structure,” he said, adding that the goal is to establish a profit-sharing model consistent with global industry standards.
The move underscores Exxon’s broader strategy: invest in regions where growth is still welcome and regulations, while strict, are more predictable than in Europe’s evolving legal environment.
The Bigger Picture
For the EU, the Corporate Sustainability Due Diligence Directive represents an attempt to lead the world on ethical business and climate responsibility. For companies like ExxonMobil, it represents a crossroads — between staying compliant in Europe or refocusing their business elsewhere.
If neither side bends, the fallout could reshape not only Europe’s energy landscape but also global supply chains.
As Woods put it, “Europe says it wants clean, responsible energy — but if it drives away the very companies capable of supplying it, everyone loses.”
