The European Union wants to raise $140 billion in windfall taxes from energy companies to soften the hit to consumers from surging prices
- The European Commission wants to raise €140 billion ($139.7 billion) in windfall taxes from energy companies.
- The European Union's executive arm wants to impose such a levy on low-cost electricity producers.
The European Commission will seek a tax on profit made by energy companies in the European Union to aid consumers facing high bills as prices climb during the region's energy shock.
The European Union's executive arm wants to raise €140 billion ($139.7 billion) in windfall taxes on low-cost electricity producers, European Commission President Ursula von der Leyen said Wednesday in delivering her State of the Union address.
"These companies are making revenues they never accounted for, they never even dreamt of," she said. "In our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers."
Member states would use the money to aid consumers and businesses contending with high bills resulting from soaring gas and electricity prices, each of which has jumped as Russia reduces gas flows into Europe.
The Financial Times, reporting on the commission's draft proposals, said a mandatory threshold would be set for prices charged by companies that produce low-cost energy from non-gas sources, such as nuclear and renewables.
The EC is also proposing a "crisis contribution" from major oil, gas, and coal companies and wants electricity users to cut their consumption by at least 5% during selected peak price hours.
Benchmark Dutch gas futures during 2022 had jumped about 1,000% from a year ago as Russia cut energy supplies to Europe in response to sanctions imposed on Moscow for launching a war against Ukraine. With gas a key component in electricity generation, electricity prices have also spiked up.
Underscoring the pain from higher gas prices, Germany is weighing nationalizing Uniper as the utility company faces growing financial losses. Uniper lost €12.4 billion in the first half of 2022 as gas prices soared after Russia reduced flows into Europe.
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