Exxon CEO says EU mandates could stifle energy buys
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European Union green rules will "challenge" the U.S.-EU energy deal, Exxon CEO Darren Woods tells Axios.
Why it matters: Woods is pushing back hard on looming ESG standards for companies based or doing business in the bloc above certain revenue threshold levels.
Zoom in: Woods said the Corporate Sustainability Due Diligence Directive (CS3D) — which he calls unworkable — could hinder EU pledges to buy $750 billion worth of U.S. energy products over three years.
- That target is in the August U.S.-EU trade package.
Friction point: "The challenge is going to be that the companies who supply that energy will clearly exceed the threshold, and so will be subject to this law," Woods said Wednesday in an interview.
- "And since it's not technically possible to implement the law, they're all going to be challenged with putting together plans that aren't achievable, and then open themselves up to challenges in court, and what I call bone-crushing potential penalties."
Zoom out: Exxon has an extensive footprint in Europe, and Woods said the CS3D is among the policies hindering industrial competitiveness there.
- The CS3D also effectively creates requirements for companies' operations and value chains worldwide, he said, calling it a "disastrous law, the worst I've seen in my tenure in this job."
State of play: He's working with Trump administration officials who are also pushing back against EU mandates including CS3D.
- EU leaders, in a joint U.S.-EU statement in August, pledged work to ensure CS3D and the related Corporate Sustainability Reporting Directive "do not pose undue restrictions on transatlantic trade" and make other changes.
What we're watching: Woods said European officials have a "growing recognition and acceptance" of CS3D's problems.
- But he added: "We've been ... pretty disappointed with the response, the lack of urgency, and frankly, the steps they've taken have created more confusion than they solved."
Elsewhere, Woods hedged on plans for a final investment decision this year on Exxon's potential low-carbon hydrogen and ammonia project in Baytown, Texas.
- He said federal tax credits remain in place that would support the project, but added that it's unclear whether the wider market will develop enough in the U.S. and overseas.
The bottom line: "We're not interested in having a successful project. We're interested in having a successful project as part of a growing new industry," he said.
