ExxonMobil sues EU to block energy windfall tax

[Stevicus]

ExxonMobil sues EU to block energy windfall tax - UPI.com

Dec. 28 (UPI) -- ExxonMobil is suing the European Union over the bloc's new windfall tax on oil groups, arguing Brussels exceeded its legal authority over what the U.S. oil firm called a "counterproductive" measure.

The lawsuit, filed at the EU's Luxembourg-based General Court on Wednesday, claims the 33% windfall tax would "undermine investor confidence, discourage investment and increase reliance on imported energy and fuel products," according to Casey Norton, a spokesperson for Exxon.

The lawsuit also challenges the Council of the EU's legal authority to impose the new tax, as well as its use of emergency powers to secure member states' approval for the measure.

"Our challenge is targeted only at the counterproductive windfall profits tax, and not any other elements of the package to reduce energy prices," ExxonMobil said in a statement.

"European industries already face a very real competitiveness crisis and governments should be supporting the production of reliable and affordable energy."

The windfall tax, or so-called solidarity contribution agreed to in September, would require major oil, gas and coal companies to pay a "crisis contribution" on their bloated 2022 profits. The 33% tax on this year's profits is more than 20% higher than the average for the past three years.

I guess it's not a huge surprise that oil companies want to have even more money, but in this lawsuit, they seem to be arguing that it's in the best interests of all the governments involved. As if they have nothing to gain from eliminating the tax.

The EU's new windfall tax could bring in as much as $136 billion from energy companies that are reporting huge profits. The money would be returned to families and businesses struggling with soaring energy costs and high inflation.

"A cap on outsize revenues will bring solidarity from energy companies with abnormally high profits towards their struggling customers," European Commission Vice President Frans Timmermans said in September, according to the BBC.

Oil companies have seen record profits this year, due to a surge in the price of oil and natural gas following Russia's invasion of Ukraine in February.

In October, President Joe Biden accused the companies of "war profiteering," as he threatened to impose his own "windfall tax."

"Oil companies' record profits today are not because they're doing something new or innovative. Their profits are a windfall of war."

Biden accused them of "war profiteering" and could impose his own windfall tax on oil companies.

 

[sun rise]

How the rich do whine like a jet engine.

 

[exchemist]

ExxonMobil sues EU to block energy windfall tax - UPI.com







I guess it's not a huge surprise that oil companies want to have even more money, but in this lawsuit, they seem to be arguing that it's in the best interests of all the governments involved. As if they have nothing to gain from eliminating the tax.





Biden accused them of "war profiteering" and could impose his own windfall tax on oil companies.

I think Biden and the EU are right. It was no part of the business plan that underpinned the investments made by the oil and gas companies that prices would reach these heights, due to a war in Europe. So they don't need to make such profits in order to earn a good rate of return. It's a textbook case of a windfall. Ben van Beurden (Shell) has acknowledged that society will expect some of these profits to be handed back, to mitigate the effect on the cost of living. So this whining about discouraging investment is something I don't buy.

However that is not the basis of the legal challenge. ExxonMobil is arguing the EU ("Brussels") has no power to levy taxes, as this is a prerogative of member states. I think that is correct, but my understanding is it is the member states, collectively, that have agreed to levy this tax. So my guess is the legal challenge will fail. They probably hope to delay the imposition of the tax, Trump-style, by mounting litigation to slow the process down. But how typical of ExxonMobil. I would never have worked for them.