ExxonMobil sues EU to block energy windfall tax
ExxonMobilsues EU to block energy windfall tax. The major US energy giant is suing the EU in an effort to get the EU to abolish its new windfall tax on oil companies.
Firms that benefited from something they were not responsible for must pay a windfall tax.
Due in part to supply issues brought on by Russia’s invasion of Ukraine, energy companies are receiving significantly more money for their oil and gas.
Exxon, however, claims that Brussels went above its legal powers and labels the action as “counter-productive.”
In October, ExxonMobil announced a nearly $20 billion (£17.3 billion) quarterly profit.
Major oil, gas, and coal corporations will be required to pay a “crisis contribution” on their enhanced 2022 profits, according to a plan presented by European Commission President Ursula von der Leyen in September.
Profits for this year were announced to be subject to a 33% tax, which is more than 20% higher than the average for the three years prior.
Exxon, however, contends in a lawsuit brought before the EU’s General Court in Luxembourg that the tax deters investment and erodes investor trust.
“Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Exxon spokesperson Casey Norton told the Reuters news agency.
In an investor meeting earlier this month, ExxonMobil’s chief financial officer estimated that the EU tax would cost the group “over $2 billion”.
The European Commission said it “takes note” of Exxon’s legal application and said that “it will be now up to the General Court to rule on this case”, the Financial Times reported.
The EU is primarily attempting to wean itself off Russian energy, but this has forced it to look for more expensive other supplies.
According to EU ministers, taxes on non-gas energy suppliers and producers who are profiting more than usual from the current demand might earn €140 billion (£123 billion).
