Home » Exxon sues EU in move to block new windfall tax on oil companies

Exxon sues EU in move to block new windfall tax on oil companies

by admin

ExxonMobil is suing the EU to force it to abolish its new bloc windfall tax on oil groups, alleging that the EU has exceeded its legal powers by imposing the tax.

The lawsuit is the most significant response yet to taxes from the oil industry Invasion of UkraineThe action threatens the viability of the levy, which the European Commission said would raise €25 billion “to help bring down energy prices”.

Exxon said the lawsuit was filed Wednesday by its German and Dutch subsidiaries in the European General Court in Luxembourg City. This challenges the EU Council’s legal powers to impose new taxes, historically reserved for sovereign states, and its use of emergency powers to secure the approval of Member States. chanting.

Exxon spokesperson Casey Norton said U.S. supermajors are aware that high energy costs “are weighing down on families and businesses,” but the tax is “counterproductive.” “It undermines investor confidence, discourages investment, and increases reliance on imported energy,” it said.

Norton said Exxon has spent $3 billion on European refinery projects over the past decade to boost production “at a time when Europe is struggling to cut energy imports from Russia.”

Exxon is now looking at “future multi-billion euro investments” on the continent, Norton added. It depends on whether there is

The so-called solidarity contribution was one of several measures agreed To ease the burden on energy consumers, the funds raised by the September Council will either be recycled to hard-hit consumers or invested in clean energy supplies.

Other measures Includes a cap on revenue from low-cost power generation. Norton said Exxon wasn’t against these.

The European General Court will decide whether to rule on Exxon’s case. Future decisions may then be appealed to the European Court of Justice. The process could continue through next year.

The Commission is an EU executive body with the power to propose legislation. The Council is the EU’s intergovernmental body, where representatives of the 27 Member States debate and agree to laws.

The new tax will come into force on 31 December and taxable profits in 2022-2023 that are 20% or more above average profits in 2018-2021 will be taxed at least 33%. Taxation applies.

ExxonOne of Europe’s largest oil suppliers..

Brussels has regularly used during the energy crisis emergency powers granted under Article 122 of the Treaty on the Functioning of the EU. The clause states that “in the spirit of solidarity” Member States can bypass the European Parliament and approve legislation directly from the Commission “in the event of serious problems with the supply of certain products, particularly in the energy sector”. increase.

Exxon’s lawsuit alleges that the windfall tax does not remedy shortfalls in energy supplies, and the Commission and Council exercised emergency powers to secure approval by majority rather than unanimous vote. is incorrect.

The European Parliament protested the Commission’s repeated use of Article 122, saying it undermined the democratic process, even if parliamentary involvement took much longer to pass the law. rice field.

Soaring oil company profits this year have irritated Western governments, putting them under pressure as higher fuel prices threaten to accelerate inflation and plunge economies into recession.

Following the EU tax, in November the UK increased its windfall tax on oil and gas producers from 25% to 35%, extending it until 2028. .

Italy, where a court dismissed a lawsuit filed by wind farm ERG last month, is also challenging the windfall tax. Spanish oil and gas group Cepsa has also threatened to sue Madrid over a similar tax on the Iberian Peninsula.

Campaigners have repeated this accusation. Agathe Bounfour, oil director for the NGO Transport & Environment, described Exxon’s lawsuit as an “attempt to intimidate” and said oil and gas companies were involved in “flashy profiteering” during the crisis.

The European Commission and European Council did not immediately respond to requests for comment.

Additional reporting by Henry Foy

Related Posts

Leave a Comment