ExxonMobil CEO Darren Woods has issued a stark warning against the European Union’s proposed corporate sustainability due diligence law, claiming that it is driving businesses out of the region. Speaking publicly on the issue, Woods stated that the company has already been retreating from Europe, citing a string of sales, closures, and exits from nearly 19 operational sites. He attributed these decisions to what he described as increasingly burdensome regulatory barriers.

“We have slowly been pulling out of Europe,” Woods said. “This is another piece of legislation that would accelerate that incentive, or warrant businesses to reduce their activity in Europe.”

Corporate Sustainability Law Faces Industry Pushback

At the heart of Exxon’s criticism is the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which aims to require large companies to monitor and mitigate human rights and environmental risks throughout their supply chains. While the law is designed to hold corporations accountable for global impacts, Exxon argues that its implementation adds further complexity and disincentivizes investment on the continent. The European Commission has yet to respond to Exxon’s comments.

Read more: Billions in Green Energy Mining Finance Linked to Rights Abuses and Environmental Harm, Report Finds

€100 Million Recycling Investment Frozen

In parallel with its critique of the due diligence directive, ExxonMobil is also putting a €100 million plastics recycling project in Europe on hold. The oil major says it is reconsidering the investment due to a proposed EU regulation that would change how recycled content is calculated. Under the draft rules, recycled content would be assessed based on the mass of plastic waste entering the recycling system versus the mass of recycled output.

Dispute Over Recycling Metrics

According to ExxonMobil, this approach disadvantages integrated petrochemical plants that use a mix of fossil and recycled feedstocks, favouring standalone recycling facilities where the input-to-output stream is easier to quantify. The company argues that this methodology unfairly penalises more complex recycling systems, even if they contribute to the circular economy. As regulatory debates continue, Exxon’s decision to pause funding signals growing tension between industrial players and EU environmental ambitions.

Global Climate Context and Economic Costs

The showdown between Exxon and EU policymakers comes at a time of rising global scrutiny over climate impacts and corporate responsibility. New figures from the World Bank reveal that Bangladesh is facing economic losses of nearly $1.78 billion annually due to heat-related illnesses and reduced labour productivity—a cost equivalent to 0.4% of its GDP in 2024. Meanwhile, Spain has recorded its hottest summer since tracking began in 1961, with temperatures soaring 2.1°C above the long-term average and pushing wildfire damage to over one million hectares across the EU this year alone.

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Looking Ahead

ExxonMobil’s latest statements reflect the mounting friction between major fossil fuel companies and rapidly evolving climate policy frameworks, particularly in regions like Europe where regulatory stringency is intensifying. As the EU moves forward with more ambitious environmental legislation, the response from heavy industries could reshape investment patterns and raise critical questions about the balance between sustainability leadership and global competitiveness.

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