ExxonMobil: EU tax on oil company profits “discourages investment”

American multinational ExxonMobil says that the new tax by the European Union on the extraordinary profits of oil companies “it will discourage investment”, after having sued the European Union (EU) considering that Brussels has exceeded its legal authority to impose the tax.

“Our challenge is directed solely at the counterproductive tax on windfall profits, and not at any other element of the package to lower energy prices. This tax will undermine investor confidence, discourage investment and increase reliance on imported energy and fuel products.”ExxonMobil’s corporate manager of media relations, Casey Norton, told EFE.

Norton also stressed that European industries “they already face a competitiveness crisis” and that “governments should support the production of reliable and affordable energy”.

According to the Financial Times, Exxon’s German and Dutch subsidiaries filed the lawsuit in the European General Court, in which the company objects that the Commission and the Council of the EU have used their emergency powers.

These powers are regulated in article 122 of the Treaty on the Functioning of the EU, which establishes that Member States may approve legislation directly in the Commission, without going through the European Parliament, “particularly if serious difficulties arise in the supply of certain products, especially in the area of ​​energy.”

However, in its lawsuit, the company has argued that taxing company windfalls will not fix supply shortages, so the Commission and Council erred in using their emergency powers.

Norton also pointed out that ExxonMobil invests in the old continent “It mainly depends on how attractive and competitive Europe is globally.”

Exxon calculated in November that this new tax will cost it $2 billion.

“We recognize that the energy crisis in Europe is weighing heavily on families and businesses, and we have been working to increase the supply of energy to Europe”Norton noted.

The governments of the European Union agreed in September on new emergency measures to lower electricity bills, including a new tax on oil companies, defined as the “solidarity contribution”, by which 33% of the extraordinary profits of oil, gas companies and the refinery sector will be taxed in both 2022 and 2023.

In the text, the EU defined said profits as profits that exceed 20% of the average registered in the last four years.

With the new cap on extraordinary benefits for energy companies, including the limit on the price of renewables and this rate, the European Commission estimated to raise $149,280.

The European General Court will now have to decide whether to rule on the company’s lawsuit in a process that could reach the European Court of Justice and last for most of 2023, according to the aforementioned publication.

Source: EFE