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Tuesday, July 16, 2024

In an effort to prevent Europe from imposing a windfall tax, Exxon Mobil has initiated legal action

Exxon Mobil has made an effort to thwart what it deems to be a “counterproductive” new windfall tax that has been imposed by the European Commission. This tax is part of an initiative to mitigate the negative effects of soaring energy prices across the 27-nation bloc. Exxon Mobil has attempted to thwart this tax.

On Wednesday, a complaint was submitted to the General Court of the European Union in Luxembourg by the German and Dutch branches of the American oil giant. It is up to the court to determine at this point whether or not it will take up the case, which argued that the European Council did not have the right to levy the tax.

Since Russia’s invasion of Ukraine in February, which disrupted delivery of fossil fuels to Europe, large oil and gas businesses have raked in multibillion-dollar profits, while consumers have faced the prospect of energy costs that have more than quadrupled.

This year, Exxon estimated that the tax will result in a loss of $2 billion for the corporation until 2023. This year, the corporation said that it made $20 billion in earnings around the world.

Casey Norton, a spokeswoman for Exxon Mobil, said that despite the fact that the firm acknowledged the strain that high energy prices had imposed on households and companies in Europe, the company did not believe that a windfall tax would be an effective solution to the issue.

Mr. Norton warned that the new levy would reduce trust among investors, deter new ones, and force the country to rely more heavily on foreign sources of oil and gasoline. Governments in Europe should encourage the generation of stable, low-cost energy since the region’s companies are already struggling to compete.

The European Council, which is the executive arm of the European Union, is the body that enacted the tax under a rule that permits it to transcend the bloc’s Parliament in emergency circumstances. Exxon contends that this is an abuse of the power that the group has. On Saturday, the new tax rate will go into effect.

The member states of the European Union have each passed their own legislation in an effort to alleviate the financial burden caused by rising energy prices.

This month, the German Parliament enacted legislation that put a ceiling on the price of gas and electricity based on the levels that were in effect the previous year. The goal of the law was to stop the upward spiral of electricity and gas bills for homes and business. The package, which places restrictions on the amount of incentives that managers of firms that benefit from the bill may get, is supported by a fee on the excessive profits that energy producers make. The measure, which is anticipated to bring in 100 billion euros, which is equivalent to $106 billion, will go into force in March but will work retrospectively beginning in January.

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