The European Commission unveiled its emergency energy package in response to the Iran war shock, aimed at strengthening Europe’s energy security and accelerating electrification. While campaigners at 350.org welcomed the Commission’s recognition that electrifying Europe will reduce dependence on volatile fossil fuel markets, they warn that the package falls short by failing to include a windfall profit tax on oil and gas companies.
Since 2015, governments could have raised $1 trillion through a 20% tax on the annual profits of the world’s 100 largest oil and gas companies. Instead, that money has gone into share buybacks and expanding fossil fuel infrastructure, locking us into dependence and leaving people exposed to exactly the kind of crisis we are seeing now.
Momentum for such a tax is growing. At least five EU member states have already called for a windfall levy, while ministers and international bodies have pointed to the need for fossil fuel companies to contribute more to the energy transition. Similar proposals are gaining traction in countries including the UK, Australia and the United States.
A coordinated, EU-wide levy on fossil fuel profits would be significantly more effective than fragmented national approaches, reducing opportunities for tax avoidance while generating revenues at the scale needed to support households and fund the transition.
Fanny Petitbon, France Country Manager
“The European Commission is right on electrification as a path to energy independence. But by sidestepping a windfall profit tax, it is missing a critical opportunity to make polluters pay and to fund the transition at the scale required.
We cannot keep socialising losses and privatising gains. Without a coordinated, EU-wide levy, the burden will continue to fall on households while fossil fuel companies pocket the difference.
A permanent tax on fossil fuel profits could directly fund affordable electric transport, heating, and clean industry, while supporting climate-vulnerable countries to transition away from fossil fuels and to cope with devastating climate impacts. This is within reach through international cooperation, including ongoing negotiations under the UN Framework Convention on International Tax Cooperation
Credibility comes down to action. The question is not whether to electrify, it’s who pays. Europe should lead: polluters must contribute.”
Campaigners also cautioned that while proposals to lower electricity taxation could help reduce bills, these must not subsidise fossil fuel-based power such as LNG or coal, nor come at the expense of public investment in renewables.
In the coming days, more than 50 countries will gather in Santa Marta, Colombia for the first international conference linked to the Fossil Fuel Treaty Initiative, a key moment for global cooperation on phasing out fossil fuels. Europe’s position, campaigners say, will be judged by its domestic action.
ENDS
Notes to editors:
- The $1 trillion estimate is based on a 20% surtax applied to the annual profits of the world’s 100 largest oil and gas companies since 2015.
- The European Commission’s emergency package follows ongoing geopolitical instability impacting global energy markets.
- Launched in 2024, the UN Framework Convention on International Tax Cooperation process should be finalized in 2027.