Exxon Mobil CEO Darren Woods told Reuters that the company would be unable to continue doing business in Europe if the EU does not make significant changes to its Corporate Sustainability Due Diligence Directive, which could impose fines of up to 5% of global net turnover.
Woods said the potential penalties would severely impact Exxon Mobil’s profitability and operational flexibility, prompting the company to consider withdrawing from European markets if compliance costs become prohibitive.
The directive requires companies with more than 500 employees or a global turnover of €150 million to conduct due diligence on human rights and environmental impacts in their value chains, with fines up to 5% of global net turnover and civil liability claims.
Exxon Mobil’s European operations include refining, marketing, and LNG trading, and the company has been gradually reducing its presence in the region, citing regulatory red tape.
In recent quarters, Exxon Mobil’s earnings have fallen sharply: Q3 2023 earnings were $9.1 billion, down from $19.7 billion in Q3 2022, and Q2 2023 earnings were $7.9 billion versus $17.85 billion in Q2 2022, reflecting lower natural gas and crude oil realizations and margin compression.
The CEO’s warning comes amid growing opposition from the energy sector to the CSDDD, with other major oil companies also voicing concerns that the directive could harm competitiveness and lead to de‑industrialization in Europe.
Exxon Mobil is actively lobbying against the directive and has used the public warning as a strategy to influence EU lawmakers to amend the rules in a more favorable manner.
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