The EU approved the introduction of a tax on excess profits of energy companies

Minister of Economy and Infrastructure Riina Sikkut spoke out against the introduction of a tax on excess profits. A photo: Andras Kralla

On Friday, September 30, the countries of the European Union approved the introduction of a tax on excess profits of energy companies, reports

The approved measures include imposing a tax on excess profits from fossil fuel companies earned in 2022 or 2023.

Next year, the tax will also be levied on the excess profits that cheap electricity producers make from soaring electricity prices.

According to the European Commission, the introduction of a tax on excess profits of energy companies should bring about 140 billion euros in tax revenue.

In Estonia, the excess profit tax will affect shale oil producers Viru Keemia Grupp (VKG), Eesti Energia and Kiviõli Keemiatööstus, as well as all renewable energy producers, including state-owned Enefit Green.

A five percent reduction in electricity consumption during peak periods was also agreed, and a ceiling on natural gas prices is planned to be considered as a next step.

Recall that in relation to gas and oil companies, the European Commission is going to introduce a 33% income tax based on the results of the current financial year, if this profit is at least 20% higher than the average for the last three years.

As part of this measure, the EU plans to collect 140 billion euros, and then send them to support citizens. The second part of the Brussels plan will affect low-carbon electricity producers (for example, solar and wind farms, as well as nuclear power plants). They are planned to be limited to a price ceiling of 180 euros per MWh, which is less than half of the current market prices. Everything else will be taken by the state.

Estonia has previously opposed the imposition of the tax. “Member States should remain free to do so if they so wish. The potential return in no way outweighs the fact that we will reduce the investment confidence for renewable energy producers,” Minister of Economy and Infrastructure Riina Sikkut.

Source: by

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