Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Exxon sues over EU fossil fuel ‘windfall tax’

Exxon sues over EU fossil fuel ‘windfall tax’

Lawsuit claims EU executive lacks authority to impose taxes and contests use of emergency procedure.
U.S. oil giant ExxonMobil has challenged the European Commission's proposal to levy excess profits from European Union-based oil and gas firms at the General Court of the EU, the company said Wednesday.

The lawsuit — filed through subsidiaries in Germany and the Netherlands — argues that the measure is a tax, which is a right reserved for national governments, and contests the use of the EU Treaty's Article 122, an emergency procedure that excludes the European Parliament, to enact the legislation.

Under Article 122, the Commission initiates a legislative proposal, but it is the Council that adopts the measure via a qualified majority vote of EU member countries.

"Our affiliates, ExxonMobil Producing Netherlands BV and Mobil Erdgas-Erdöl GmbH, are suing the European Council in a bid to annul a new windfall tax on oil and gas companies," said ExxonMobil spokesman Casey Norton in Texas.

EU countries in September passed an emergency package of legislation aimed at tackling soaring energy prices. It included a temporary minimum 33 percent tax — dubbed a "solitary contribution" — on profits for fossil fuel and refinery companies that exceed a four-year historical average by 20 percent. The relevant profits could be from fiscal years 2022 or 2023, depending on the country.

"This litigation is driven by our concern about the unintended long-term effects of this policy on the competitiveness of European industry," the spokesman said via email. "This tax will undermine investor confidence, discourage investment, and increase reliance on imported energy and fuel products."

The suit does not prevent the legislation from taking effect — and without any time limits on the court to decide the case, it could be years before a judgment is pronounced.

The legislative package at issue also includes taxes dubbed "revenue limits" for electricity generators and financial relief for certain retail consumers.

“The Commission maintains that the measures in question are fully compliant with EU law,” said Arianna Podestà, a Commission spokesperson. In an email, she added that the measure aims to “ensure the whole energy sector pays its fair share in these difficult times for many to address the extraordinary energy crisis resulting from the weaponisation of the energy supply by Russia.”

The Commission estimates the temporary measure could bring in up to €25 billion, to be redistributed by member countries.

"We recognize that the energy crisis in Europe is weighing heavily on families and businesses, and we’ve been working to increase energy supplies to Europe," ExxonMobil's Norton said. "Our challenge is targeted only at the counter-productive windfall profits tax, and not any other elements of the package to reduce energy prices."

The case concerns one of the first instances of the EU's use of the emergency Article 122 for energy legislation, potentially making it a test case.

"The windfall tax will not remedy any shortage of energy supply and cannot realistically achieve a timely impact, so the European Commission and Council were wrong to use exceptional powers under Article 122(1) TFEU to speed its approval," Norton added.

EU countries have also used the emergency procedure to mandate minimum natural gas storage levels, cuts in winter electricity and gas use, the joint purchasing of gas supplies, and a maximum cap on wholesale natural gas prices within the bloc.

"ExxonMobil has been one of the largest investors in European refining over the last ten years, investing more than $3 billion in major refinery projects," said Norton, adding that "future [multibillion-euro] investments in Europe’s energy supply and transition" would "depend on how attractive and globally competitive Europe will be," and warning EU lawmakers to stick to "thoughtful policy ... at a time when Europe struggles to reduce its energy imports from Russia."

The European Council did not respond to a request for comment.

Related Articles

Budapest Post
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
Shell reports highest profits in 115 years
EU found a way to use frozen Russian funds
First generation unopened iPhone set to fetch more than $50,000 at auction.
WARNING GRAPHIC CONTENT - US Memphis Police murdering innocent Tyre Nichols
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
China is opening up for foreign investors.
Tesla reported record profits and record revenues for 2022
Germany confirms it will provide Ukraine with Leopard 2 tanks
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Opinion | Israel’s Supreme Court Claims a Veto on Democracy
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Who’s Threatening Israeli Democracy?
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Hungary ready to sue EU over cuts to Erasmus funding
EU against democracy: Hungary's mail-in poll on Russia sanctions dismissed by Brussels
2023 - The Year of the Rabbit
Israelis rally in three cities against Netanyahu legal reforms
Tesla slashes prices globally by as much as 20 percent
Japan prosecutors indict man for ex-PM Shinzo Abe murder
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
Lisa Marie Presley, singer and daughter of Elvis, dies aged 54
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Dirty bomb fears as URANIUM is found in cargo at Heathrow
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
Saudi Arabia set to overtake India as fastest-growing major economy this year 
International medical experts speak out against COVID-19 restrictions on China
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
Saudi Arabia’s female ambassadors: Who are the five women representing the Kingdom?
Hong Kong property brokerages slash payrolls in choppy market
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Effect of EU sanctions on Moscow is ‘less than zero’ – Belgian MEP
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
A Republican congressman-elect is under investigation in New York after he admitted he lied about his education and work experience.
Brazilian football legend Pele, arguably the greatest player ever, has died at the age of 82.
Hong Kong to scrap almost all its Covid rules
EU calls screening of travellers from China unjustified
Clashes erupt in central Paris after shooting at a Kurdish cultural center