Energy Giant ExxonMobil Sues EU To Block Energy Windfall Tax

Energy giant Exxon Mobil has sued the EU to block energy windfall tax.

EKO HOT BLOG reports that the United States, US energy giant ExxonMobil is suing the EU in a bid to force the bloc to scrap its new windfall tax on oil firms.

A windfall tax is imposed on firms that benefitted from something they were not responsible for.

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Energy firms are getting much more money for their oil and gas, partly due to supply concerns as a result of Russia’s invasion of Ukraine.

But Exxon accuses Brussels of exceeding its legal authority, calling the measure “counter-productive.”

ExxonMobil reported a quarterly profit of almost $20 billion (£17.3 billion) in October.

In September, European Commission chief Ursula von der Leyen announced the plan for major oil, gas, and coal companies to pay a “crisis contribution” on their increased 2022 profits.

A 33% tax on this year’s profits was announced, which were more than 20% higher than the average for the three previous years.

But Exxon argues that the levy discourages investments and undermines investor confidence in a challenge filed at the EU’s Luxembourg-based General Court.

“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 largely trying to wean itself off Russian energy, but that has left it scrambling for alternative, more expensive, sources.

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EU ministers estimate that they can raise €140bn (£123bn) from the levies on non-gas electricity producers and suppliers that are making larger-than-usual profits from the current demand.

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