US Energy companies make legal challenge to block EU windfall tax

U.S. oil major Exxon Mobil
U.S. oil major Exxon Mobil sues the EU

US Energy giant Exxon sues EU in move to block new windfall tax on oil

US oil major Exxon Mobil Corp XOM.N is suing the European Union in a bid to force it to scrap the bloc’s new windfall tax on oil groups, arguing Brussels exceeded its legal authority by imposing the levy.

Record profits this year by oil companies benefiting from high energy prices have boosted inflation around the world and led to fresh calls to further tax the sector.

The windfall profits tax is “counter-productive,” discourages investments and undermines investor confidence, Exxon spokesperson Casey Norton said on Wednesday. 

Exxon will factor in the tax as it considers future multibillion-euro investments in Europe’s energy supply and transition, he said.

“Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Norton said.

The Financial Times first reported the lawsuit on Wednesday.

Several EU member states have introduced windfall taxes on oil and gas companies in a bid to reign in excess profits, help protect their populations from high prices and help diversify energy supplies. 

Some 80 million European households are struggling to stay warm due to rising energy costs, reports the European Cooperation in Science and Technology (COST). 

Windfall profit taxes imposed by Europe could cost at least 2 billion euros by the end of 2023, Exxon Chief Financial Officer Kathryn Mikells said in December.

Exxon said it invested 3 billion euros in the past decade in refinery projects in Europe. 

The projects are helping it deliver more energy products at a time when Europe struggles to reduce its imports from Russia, the company said.

“We will continue to work with EU leaders to address these issues. Thoughtful policy is critical,” the company said.

Chevron Corp (CVX.N) had also warned that taxing oil production would serve only to reduce energy supply by discouraging company investments.

“That goes against the intent of increasing suppliers and making energy more affordable,” Chevron’s chief financial officer, Pierre Breber, told Reuters in October.

But let’s all be honest, the energy companies are ripping us off. The only solution for Europe is to reclaim our own minerals and nationalise Energy.

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