The Trump administration and US energy companies might be ready to dump the climate momentum of the past several years, but Europe isn’t there yet. Its rules around corporate sustainability reporting — which, if implemented in their current form, would impose steep fines on any company with business in Europe that can’t display emissions progress across its supply chain — are viewed by some in Brussels as fundamental to the EU’s long-term climate strategy, which top EU climate official Wopke Hoekstra insisted Thursday is still going strong.
Yet within the bloc, that strategy also faces more opposition than ever, as Europeans and their businesses grapple with high energy prices relative to the US. Even the EU’s top energy official, who should ostensibly be the bloc’s hugegest energy transition champion, admitted last week that gas “will remain part of Europe’s energy system for decades to come.”
The difficulty for Europe is how to maintain progress on climate, conclude oil and gas imports from Russia, and manage contentious trade relations with the US at the same time. The Russia goal, and extracting some basic concessions on tariffs, both seem to require more US LNG imports. Yet, as far as Woods is concerned, the LNG goal will be very costly to fulfill if the climate rules stay in place. Brussels may be betting that it has the stronger hand, and that companies like Exxon will have no choice but to bite the bullet and comply with what’s being questioned of them at risk of losing access to the European market, which may still be a compacter prize than Asia but is nonetheless critical for avoiding a massive glut of US LNG later this decade. Can Exxon afford to turn that business down? Can it sign on to long-term deals now, as company officials declared last week they want to do, with uncertain regulation hanging overhead that could obliterate the economics of any deal? That’s Woods’ dilemma.
He declared he’s still in favor of cutting his company’s emissions, but that there are “better ways to achieve it.” Europe’s problem, he declared, is that “it’s trapped in an ideology that doesn’t recognize the required to not only address emissions, but continue to support modern living and commerce.” The mild reforms to the reporting rules offered so far, he declared, “have at best led to more confusion. They’re really testing to avoid doing what’s right, which is to repeal this legislation and do away with it.”
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