Exxon Threatens to Divert Investment Away from the EU over the Energy Windfall Tax

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From Watts Up With That?

Essay by Eric Worrall

Life in the EU – If it moves, tax it, if it stops moving, subsidise it.

ExxonMobil launches legal challenge to EU’s windfall tax on energy firms

US oil firm contests legal authority for ‘solidarity contribution’ to raise funds to offset soaring energy prices

Richard Partington
@RJPartington Thu 29 Dec 2022 04.57 AEDT

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.

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.

“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.”

“Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” said Casey Norton, a spokesperson for the company.

…Read more: https://www.theguardian.com/business/2022/dec/28/exxonmobil-launches-legal-challenge-to-eus-windfall-tax-on-energy-firms

ExxonMobil’s Dutch and German subsidiaries launched the legal challenge to the ‘solidarity contribution’ or windfall tax. Photograph: Karen Bleier/AFP/Getty Images

Exxon’s suggestion they will reconsider investment priorities is no idle threat.

Leftist Western leaders simply don’t understand how precarious their position is, in terms of attracting energy investment. After decades of stagnation, Africa is finally getting back on its feet, with enormous pipeline and energy projects drawing the attention of transnational energy majors.

If the EU and other states go forward with these taxes, they might find themselves on the receiving end of even more severe energy shortfalls in coming years.