Finance ministers from Austria, Germany, Italy, Portugal and Spain have written to EU Climate Commissioner Wopke Hoekstra urging the bloc to introduce a windfall tax on oil and gas companies that are profiting from the energy price surge. The letter argues that the levy would 'send a clear message that those who profit from the consequences of the war must do their part to ease the burden on the general public.'
The call comes as energy prices remain elevated due to the Iran war and the closure of the Strait of Hormuz. An analysis by The Guardian, using Rystad Energy data, found that leading oil and gas companies could make an extra $234 billion (€200 billion) by year-end if oil prices average around $100 per barrel. BP reported an 'exceptional' first quarter in 2026, with profits more than doubling to $3.2 billion.
The EU previously imposed a temporary 'solidarity contribution' in 2022, taxing at 33% any profits exceeding 120% of the average of the previous four years. That measure raised over €26 billion. However, the EU's April 22 measures stopped short of reintroducing such a tax.
Critics argue that windfall taxes rest on fragile legal ground. Cristina Enache of Tax Foundation Europe notes that national implementations often become retroactive, 'clashing with a core legal principle in most EU countries: non-retroactivity in taxation.' She also highlights unequal treatment, unclear tax bases, and lack of proportionality as reasons the taxes are likely to face legal challenges.
Antony Froggatt of Transport & Environment defends the tax, saying 'instead of governments putting the burden on taxpayers, it's time that oil companies pay up.' He points to the 2022 precedent as evidence of feasibility and urges EU leadership to target multinational firms. 'It's not unprecedented, there is a mechanism and there is an experience with doing it,' he said.
Legal battles have already emerged: ExxonMobil sued the EU in 2022 over the windfall tax, and Klesch also took legal action. Enache warns that while such taxes can generate short-term revenue, they come 'at the cost of higher uncertainty, weaker investment, and higher prices down the line.' Both experts agree the crisis underscores the need for stronger EU energy security, but differ on whether temporary taxes or long-term reforms are the answer.
Source: www.dw.com