An EU surtax on fossil fuel industries’ profits, which was limited to the fiscal years 2022 and 2023,  generated an estimated €28 billion of additional tax revenues for EU Member States.

This headline figure has been published by the European Commission in its assessment of the so-called ‘solidary contribution’, a profit top-up levy on energy undertakings in the oil, gas, coal, and refinery sector with businesses in the EU.

In response to the European Commission’s report, Markus Trilling, Senior Policy and Advocacy Officer at the European Network on Debt and Development (Eurodad) said:

“The Commission’s report shows that returning a larger portion of polluting profits to public hands is fair and feasible: it generated a sizeable amount of much-needed public revenue.

“Today, we’re all paying the price of polluting industries’ profits as the impacts of climate change grow ever harsher, and the hardest consequences are felt in developing countries that have contributed the least to the problem. There is a desperate lack of climate finance to fund the green transition and climate adaptation globally, as well as for covering the cost of loss and damage.

“Fossil fuel industries are reaping billions of euros of profits from activities that emit extremely high amounts of greenhouse gasses. These industrial polluters must, at the very least, contribute their share of taxes to finance the fight against the climate crises. We need a permanent polluter pays tax on all fossil fuel profits – both in the EU and globally.

“We also must not forget that we urgently need to phase out fossil fuels – that is clear. But while these industries continue their dirty business surtaxes on their profits can create disincentives for fossil fuel companies to continue with business as usual and bring in substantial additional tax revenues.”

The EU solidarity contribution was introduced in October 2022, in reaction to the public outcry about emerging energy and fossil fuel companies’ super-profits, while large parts of society were suffering from a ‘cost of living crisis’. The tax was intended to skim-off the windfall profits, i.e. ‘profits that do not correspond to any regular profit’ and that hadn’t occurred without the Russian invasion of Ukraine.

The European Commission recommended a minimum 33 per cent tax on fossil fuel companies’ ‘surplus profits’, which were defined as profits above 120 per cent of the past five years average.

Markus Trilling said: “The EU’s so-called solidarity contribution was a timid start, since it was only applied as a temporary emergency measure on extraordinarily high profits. But it shows it can be done. The climate crisis is still raging, and it beggars belief that the EU has no plan to continue imposing top-up taxes on the profits of fossil fuel industries, which continue to be very high. This measure should be scaled up, and introduced as a permanent measure – both in the EU and globally. The upcoming negotiation of a new UN Framework Convention on International Tax Cooperation also provides a unique opportunity to introduce polluter pays taxes on the profits of highly polluting industries all around the world.”

ENDS

Media contact: 
Julia Ravenscroft, Communications Manager: [email protected] / +44 7958 184695.

Notes to editors

• The European Commission’s final stocktaking report on the EU Solidarity Contribution can be found here and the related press release from the European Commission can be found here.
• The Council’s decision to introduce the solidarity contribution as an emergency measure is contained in Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices, which can be found here.
• Eurodad is advocating for polluter pays taxes on actors with an excessively high carbon footprint. For more information see this briefing.
• For more information about the upcoming negotiation of a new UN Framework Convention on International Tax Cooperation see the UN’s website here and Eurodad’s press release from the organisational session in February 2025 here.