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

theguardian.com:

The EU expects to raise €140bn from windfall taxes on fossil fuel companies to “cushion the blow” of the energy crisis.

The emergency levy will be placed on oil, gas and coal firms alongside a separate measure to cap revenues from renewable electricity generators at less than half of current market prices.

Fossil fuel extractors will be asked by the EU to hand 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%.

The European Commission president, Ursula von der Leyen, said on Wednesday: “In our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefiting from war and on the back of consumers.

“Profits must be shared and channelled to those who need it the most. Our proposal will raise more than €140bn for member states to cushion the blow directly.”

European governments have ploughed hundreds of billions of euros into tax cuts, handouts and subsidies to try to contain the energy crisis, fuelled by Russia’s invasion of Ukraine, which is driving up inflation, forcing industries to shut production and hiking bills in the run-up to winter.

“In these times, profits must be shared and channelled to those who need it most,” Von der Leyen told the European parliament in Strasbourg.

The former chancellor Rishi Sunak introduced the tax on North Sea oil and gas producers this year, however the government has resisted calls to expand the tax to electricity generators.

Generators such as old solar and windfarms and nuclear power stations have benefited from the soaring price of gas.

However Truss and the new chancellor,