Breaking News: Exxon sues EU in move to block new windfall tax on oil companies | Financial Times

Gunnar Larson g at xny.io
Wed Dec 28 12:37:13 PST 2022


https://www.ft.com/content/4bd2590f-3aa3-4f0b-a001-165f61c7af5f

ExxonMobil is suing the EU in a bid to force it to scrap the bloc’s new
windfall tax on oil groups, arguing Brussels exceeded its legal authority
by imposing the levy. The lawsuit is the most significant response yet
against the tax from the oil industry, which has been targeted by western
governments amid a surge in energy prices following Russia’s invasion of
Ukraine. The action threatens the viability of a levy the European
Commission said would raise €25bn “to help bring down energy bills”. Exxon
said the lawsuit was filed on Wednesday by its German and Dutch
subsidiaries at the European General Court in Luxembourg City. It
challenges the Council of the EU’s legal authority to impose the new tax —
a power historically reserved for sovereign countries — and its use of
emergency powers to secure member states’ approval for the measure.

Casey Norton, a spokesperson for Exxon, said the US supermajor recognised
high energy costs were “weighing heavily on families and businesses” but
argued the levy was “counterproductive” and would “undermine investor
confidence, discourage investment and increase reliance on imported energy”.

Exxon had spent $3bn on European refining projects in the past 10 years,
increasing output “at a time when Europe struggles to reduce its energy
imports from Russia”, Norton said.

Exxon was now considering “future multibillion-euro investments” in the
continent, Norton added. “Whether we invest here primarily depends on how
attractive and globally competitive Europe will be.”

The so-called solidarity contribution was one of several measures agreed by
the council in September to ease the burden on energy consumers, with the
money raised to be recycled to hard-hit consumers or invested in clean
energy supply.

Other measures included a cap on revenue from low-cost power generation.
Exxon was not opposing these, Norton said.

The European General Court will decide whether to rule on Exxon’s lawsuit.
If it does, any future judgment may be appealed at the European Court of
Justice. Proceedings could drag on through much of next year.
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