Windfall Tax: Oxfam welcomes EU proposal but European countries must up the ambition to rein in corporate profiteering

Published: 14th September 2022

Today, the European Commission unveiled a package of emergency measures to curb the surge in energy prices which are hitting European consumers hard. The package includes two measures to capture extraordinary profits from energy and fossil fuel companies.    

In response, Chiara Putaturo, Oxfam EU Tax expert, said:

“Today's proposal to claw back excessive profits made by energy and fossil fuel companies to help people facing the energy crisis is a step in the right direction. Now European countries must take the leap to rein in all companies profiteering from this crisis.

“European countries must up the tax rate to at least 50 percent, and up to 90 percent as well as expanding it to all companies raking in unexpected and massive profits from this crisis. This must be done quickly to spare ordinary people from the skyrocketing energy bills which are only set to get worse this winter. This should also set a precedent for future windfall taxes such as an automatic windfall tax that kicks in every time the world faces an unexpected crisis. This will help cushion the shock to ordinary people by providing the billions of euros needed. We cannot tolerate big companies cashing in on crises while we see an explosion in poverty both at home and in the world’s poorest countries.

“It is not only energy companies who are profiting from these crises. In the last two years, 1000 of the world’s biggest companies made excess profits of over a trillion dollars. EU countries cannot keep on letting the likes of big pharma, food giants, and tech companies profit from these crises.”

Notes to editors

Today, the European Commission proposed a package of emergency measures to curb the rise in energy prices hitting Europeans hard. This includes:  

  • A “temporary solidarity contribution” on fossil fuel companies to recoup one-third (33 percent) of excess profits made in 2022. Excess profit is defined as profit exceeding the average of the last three years (2019 – 2021) by 20 percent. This is a threshold rate and EU countries can apply a higher rate. Revenue will be funnelled to consumers and companies to cushion the impact of high energy bills, and to investments in green energy. 

  • A price cap on revenue made by non-gas energy companies (wind, solar, nuclear etc): The cap will be set at 180 euro per megawatt hour – currently 300 – 400 euro per megawatt hour. The price difference will be recycled to consumers. 

The proposal will raise more than 140 billion euros for EU countries to cushion the blow directly. EU countries in the Council are set to agree on the measures at the emergency EU energy meeting on 30 September. This follows an announcement last Wednesday by Von der Leyen setting out a 5-point plan to tackle the current energy crisis.

Last Friday, Oxfam published a new media briefing, The Case for Windfall Taxes. It includes new data on how much excess profits companies have made and how much revenue a global windfall tax could recoup.

  • 1000 of the world’s biggest companies have recorded excess profits of 1.15 trillion dollars in 2020 and 2021 compared to the pre-pandemic period – an increase of 68.5 percent.  

  • A 90 percent windfall tax on 1000 of the world’s biggest companies would generate more than 1000 billion dollars globally.

Oxfam is calling for an ambitious, sector-wide, automatic windfall tax, with a rate between 50 – 90 percent (if the tax base is calculated only on excess profits and exceeds 10 percent of the average of the previous years). It should prevent an increase in costs for consumers by companies passing on the costs and redistribute revenues to those most affected by the crisis.

Many European countries have already introduced or tabled a windfall tax - see the table in Oxfam’s recent media briefing, The Case for Windfall Taxes, for the full list.

Contact information

Jade Tenwick | Brussels, Belgium | | mobile +32 473 56 22 60

Paula Andres Richart | Brussels, Belgium |

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