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It’s boom time for fossil fuel companies – and it’s fueling a growing call for Europe’s governments to boost their tax take.
Within a week, several of Europe’s biggest oil and gas firms announced record profits for last year – the proceeds of rising energy costs, topped by Russia’s war against Ukraine.
On Wednesday, France’s TotalEnergies announced a $20.5 billion net profit and a generous payout to shareholders – protests led by Friends of the Earth France outside its Paris headquarters. Preachers condemned The company’s “superprofits” come at a time when the energy crisis has left millions in fuel poverty in France and Europe.
Across the Channel, BP on Tuesday announced a net profit of $27.7 billion for 2022. The country’s Labor opposition called the income increase a “warfare” and demanded that Prime Minister Rishi Sunak expand and strengthen the UK’s existing windfall tax on oil and petroleum companies. Gas production in the UK area. Meanwhile, Norway’s Equinor announced a record net profit of $28.7 billion in a year that replaced Russia as the EU’s biggest gas supplier.
A week ago, Shell said it expected to make nearly $40 billion — more than double its 2021 profit forecast.
A succession of announcements have focused on how governments can use the tax system to harness oil company profits and use the revenue to reduce energy costs for consumers and aid the green transition. Can In the US, President Joe Biden on Tuesday called Big Oil profits “outrageous” and proposed quadrupling the tax on corporate stock buybacks; ExxonMobil predicts record $56 billion profit in 2022.
The EU already has a windfall tax – called the “temporary solidarity contribution” – of 33 per cent on profits which is 20 per cent higher than the four-year average. It was introduced in September, with the aim of providing financial support for citizens and businesses struggling with high energy prices. Many countries have their own claw-back schemes.
Shell said it paid $134 million in UK windfall tax and $520 million to the European Union.
here comes the taxman
But the bumper profits are calling for the authorities to grab a little more.
“I think it is popular for some politicians to make this call. The benefits are extraordinary and those who are saying they are benefiting from invasion have some good arguments – but in practice it may prove difficult, said an EU diplomat from the West European country.
exxonmobil is trial European Commission on tax policy – which makes it unlikely that any concerted effort will be made to strengthen EU policy until that matter is settled.
However, a senior Commission official said the string of benefits announcements – alongside the continuing difficulties people are facing paying their energy bills – demonstrated a “moral case for the solidarity contribution”.
These calls are already ringing in the European Parliament.
David Cormand, a French lawmaker on the parliament’s budgetary and consumer protection committees, said, “These huge profits are particularly unjust in relation to society today.” “There is clearly a contradiction between these completely whimsical profits and the resulting environmental impact in the production of these profits.”
Last week, the Green Lawmaker introduced an amendment for one parliamentary resolution Urged the commission to consider introducing a windfall tax structure for energy companies and taxing share buybacks.
“We need to regulate an economic sector that makes huge profits today and is not taxed in a way that matches these high profits,” Cormand said.
“There was no good reason not to expand the scope of impromptu taxation,” said Aurore Laluc, a French MEP and member of the economic and monetary affairs committee with the Socialists and Democrats.
He added, “Every day new valid reasons are emerging for introducing a comprehensive windfall tax … France has perhaps the best example of what superprofits are and why they should be taxed.” “It perfectly shows the arrogance of those who believe they owe nothing to the rest of society.”
So far, EU governments have been largely silent on fat profits. In France, government spokesman Olivier Veran accepted on Wednesday that the scale of TotalEnergies’ earnings could “shock” but noted that these were profits made globally, not in France, highlighting the problems countries face to siphon off profits from giant multinationals may be faced with finding, whose production activities are often far away. National Jurisdiction.
But Matthew Lawrence, director of the UK-based Common Wealth think tank, said the level of public anger at the rising cost of living could encourage politicians.
“People are facing the biggest cut in their standard of living in a generation – and when they open their newspapers and turn on their TVs they are shocked by record profit announcements,” he said. “These numbers are going to create a political blowback and there it will be a political advantage for those who say this is not acceptable and we need to change the functioning and design of the energy system.”