Thursday 15 September 2022

EU expects to raise €140bn from windfall tax on energy firms

 Fossil fuel extractors will be asked by the EU to give back 33% of taxable surplus profits for the 2022 fiscal year, in a move that could pile pressure on Liz Truss to reverse her decision not to extend the UK’s windfall tax on oil and gas companies, which is set at 25%. Truss has ruled out extending the £5bn windfall tax on energy companies introduced by the former chancellor Rishi Sunak.

In a further sign of the UK’s post-Brexit divergence, the new prime minister has also stopped short of asking consumers and businesses to reduce their energy use over the winter.

In contrast, the commission wants EU member states to sign up to a legally binding target to cut electricity use by 10% overall and by 5% during peak hours, via efficiency campaigns and incentives.

The plan mirrors an already agreed voluntary target of cutting gas consumption by 15% until the end of spring 2023. “Demand reduction helps rebalance the energy market, lower energy bills, reduce emissions and makes us immune to Russia’s gas games. Without demand reduction, it is not going to work,” Timmermans said.

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