Legal action

ExxonMobil sues EU over windfall profits tax

ExxonMobil says the levy exceeds the EU’s legal powers

ExxonMobil has filed a lawsuit against the European Union’s decision to impose a windfall levy on oil and gas company profits, claiming that it undermines investor confidence.

Two of Exxon’s Dutch and German subsidiaries filed the lawsuit today against the EU in the European General Court in Luxembourg.

It argues that the EU exceeded its powers as any levy must be approved by individual member states.

The EU introduced the levy in a bid to shield consumers from high energy prices caused by Russia’s invasion of Ukraine.

It intends to cap producers’ revenue from electricity generated by fuels other than natural gas and demands that oil and gas companies forfeit a third or more of profit considered to be excessive.

The EU is hoping to generate €140bn in revenues and funnel it back to households and businesses.   

The European General Court will decide whether to rule on Exxon’s lawsuit. However, any future judgement may be appealed via the European Court of Justice.

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.

An ExxonMobil spokesperson said: “Our challenge is targeted only at the counter-productive windfall profits tax, and not any other elements of the package to reduce energy 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.”

“We will continue to work with EU leaders to address these issues. Thoughtful policy is critical.”

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