ExxonMobil launches legal challenge against EUwritten by Bella Palmer
Filed on Wednesday by its German and Dutch subsidiary companies at the European general court in Luxembourg, the company’s lawsuit challenges Brussels’ legal authority to impose the new tax
ExxonMobil has launched a legal challenge against the EU in an attempt to derail the bloc’s windfall tax on the profits of energy producers.
In a high-stakes political battle as countries across Europe and the wider western world struggle with soaring energy costs and sky-high inflation, the US oil firm said it believed the EU had overreached its powers with the windfall tax.
Agreed in September as part of a package of measures to tackle the surge in oil, gas and electricity prices triggered by Russia’s war in Ukraine, the EU hopes the ‘solidarity contribution’ could raise €25bn (£22bn) in public revenue for governments across the 27-nation bloc, while acting to curtail energy demand and bring down prices.
ExxonMobil, however, said the proposals were misleading and could discourage industry investment in the production of affordable energy.
Filed on Wednesday by its German and Dutch subsidiary companies at the European general court in Luxembourg, the company’s lawsuit challenges Brussels’ legal authority to impose the new tax.
Our challenge is targeted only at the counter-productive windfall profits tax, and not any other elements of the package to reduce energy prices, ExxonMobil said in a statement.
This tax will undermine investor confidence, discourage investment, and increase reliance on imported energy and fuel products. European industries already face a very real competitiveness crisis and governments should be supporting the production of reliable and affordable energy, it said.
Exxon estimates windfall profit taxes imposed by Europe could cost at least $2bn to the end of 2023, its chief financial officer told analysts earlier this month. The company said it had invested $3bn in the past decade in refinery projects in Europe, helping to reduce European reliance on imports from Russia.
The launching of a legal case by a US oil supermajor against the EU comes as fossil fuel giants come under mounting pressure on both sides of the Atlantic over the vast profits energy companies have reported this year.
ExxonMobil reported a third-quarter profit of nearly $20bn (£17.3bn) in October, nearly triple the previous year and the most in its 152-year history.
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