ExxonMobil’s CEO, Darren Woods, has called on the Trump administration to use ongoing trade negotiations with the European Union to counter what he described as “bone-crushing” EU climate and human rights regulations. Woods argues that the new European laws risk entangling U.S. companies in excessive bureaucracy and undermining their global competitiveness.
Exxon Criticizes EU Corporate Sustainability Law
The focus of Woods’ concern is the EU’s Corporate Sustainability Due Diligence Directive, a law expected to be phased in starting in 2027. It mandates both EU and non-EU companies with substantial business in Europe to monitor their supply chains to ensure they do not violate environmental or human rights standards.
Penalties for non-compliance could reach up to 5% of a company’s global turnover — a prospect that Woods claims could severely burden U.S. businesses operating in the bloc.
“This is counter to everything the Trump administration has been trying to do on deregulation,” Woods stated in a press call following Exxon’s quarterly earnings release. “As the U.S. rolls back regulatory burdens, the EU is imposing new ones.”
Trade Talks as a Regulatory Battlefield
On Sunday, President Donald Trump and European Commission President Ursula von der Leyen unveiled the framework of a new EU-U.S. trade agreement, including a 15% tariff on most EU exports to the U.S. and a pledge by EU firms to purchase $750 billion in American energy exports.
Although described as a major first step, negotiations are expected to continue. Exxon hopes the talks will address EU regulatory pressures.
Criticism from Both Sides of the Atlantic
Exxon is not alone in its criticism. U.S. business groups argue that the directive’s extraterritorial reach and costly compliance requirements will harm non-EU companies’ competitiveness.
Surprisingly, pushback is also coming from Europe itself. French President Emmanuel Macron and German Chancellor Friedrich Merz have warned that the directive could damage European businesses as well.
As a result, the European Commission is considering raising the compliance threshold so only the largest companies would be affected.
Environmentalists Push Back
Despite corporate resistance, the EU’s sustainability rules have garnered support from over 180 investors and companies, including Ikea, EDF, and Nokia. They argue the directive is essential for Europe’s climate and economic ambitions.
However, environmental advocates have criticized efforts to dilute the law, warning that fossil fuel companies are exerting disproportionate influence to roll back key climate regulations.
Exxon’s Position on Climate Policy
While Exxon says it remains committed to reducing emissions from its operations — such as minimizing flaring — it does not include end-use emissions (from burning its oil and gas products) in its environmental calculations.
Woods acknowledged that U.S. climate policy is likely to shift again depending on political changes in Congress or the White House.
“As administrations change, the emphasis on regulation will shift. We plan for that,” he said.
Legal and Financial Pressures
Exxon is currently facing multiple lawsuits in the United States from states alleging the company misled the public about climate change and its impacts. The company denies all allegations.
Meanwhile, Exxon and Chevron both reported lower second-quarter profits due to falling oil prices.
Conclusion
With EU-U.S. trade talks underway, Exxon is pushing hard to ensure climate regulations — especially those impacting global supply chains — are part of the discussion. The outcome could significantly influence the regulatory landscape for multinational energy companies in both markets.
