EU Sets Out Plans for £101 Billion Windfall Tax on Renewable Energy Companies and “Demand Reduction” Law
The EU has set out plans to raise €140bn (£121bn) by imposing windfall taxes on energy companies, including a €117bn (£101bn) windfall tax on renewable energy suppliers, as part of an effort to halt the growing crisis. The Guardian has more.
Announcing long-awaited emergency measures to tackle the rising price of electricity, the EU official in charge of the green transition, Frans Timmermans, said the plans were a necessary response to energy supply shortages and high prices.
“The era of cheap fossil fuels is over. And the faster we move to cheap, clean and homegrown renewables, the sooner we will be immune to Russia’s energy blackmail,” he said…
Announcing further details of its long-trailed energy plan, the [EU] Commission wants oil and gas companies to pay the 33% “solidarity contribution” on their profits, although EU member states would be free to set higher levies. Low-carbon electricity generators, such as wind, solar and nuclear firms, would have their revenues capped at €180 per kilowatt hour, which is less than half current market prices.
These firms have enjoyed a profits bonanza as their revenues are linked to the price of expensive oil and gas. “A cap on outsize revenues will bring solidarity from energy companies with abnormally high profits towards their struggling customers,” Timmermans said.
EU officials expect to raise €25bn from the tax on fossil fuel producers, while the cap on low-carbon firms is expected to raise €117bn. The revenues could be recycled to consumers as direct rebates, to fund insulation and other efficiency measures or the switch to low-carbon technologies.
Both measures are in effect windfall taxes, although the Commission avoids this term because of political sensitivities. The plans are to be discussed by the bloc’s 27 energy ministers at the end of the month, with pressure for a quick approval of the law before winter.
The EU has, however, abandoned plans to cap the price of Russian gas after opposition from some countries.
The EU Commission also wants EU member states to sign up to a legally binding “demand reduction” target to cut electricity use by 10%, including by 5% during peak hours, via efficiency campaigns and incentives. Timmermans said: “Demand reduction helps rebalance the energy market, lower energy bills, reduce emissions and makes us immune to Russia’s gas games. Without demand reduction, it is not going to work.”
In the U.K., Liz Truss has said she will not extend Rishi Sunak’s energy windfall tax or ask consumers and businesses to reduce their energy use over the winter, though her own plan to deal with the looming shortages has not yet been announced.
Worth reading in full.
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So the EU is now directly interfering in raising money for its own purposes. I know they’ve interfered with VAT before but this is becoming totalitarian by the day.
“energy supply shortages and high prices.”
These are entirely self-manufactured.
“demand reduction targets” – ah that will be forcing smart meters on everybody and is just the thin end of the wedge.
“Russia’s gas games?” And EU sanctions are what exactly?
The only ones playing games, and with people’s lives, are EU politicos.
Evil furjers.
Four legs good, co2 bad.
Lower electricity use is a sure sign the prosperity of the people (but not the political class) has declined. What is unusual is to mandate it; socialists can usually do it all on their own.
I’ve just done my first conversion of a panel van (Mk7 Ford Transit) to a camper. Still a few refinements left to make, but it’s now entirely liveable for our family of four. Lovely hot shower (recirculates the water and filters and zaps it with UV along the way), kitchen, four beds, mains and low voltage. All powered by lovely DIESEL. The heater is a 5KW Eberspächer Hydronic. Use it to heat both water and space. And here’s the best bit – we travel in the van, too! Sure diesel has seen some price rises (!) but not quite to the extent of grid electricity and gas. And almost all countries are a lot cheaper than the UK right now, e.g. Turkey, Poland. All in all, an extremely efficient setup of my own design, both in terms of water and energy usage. And no, it does NOT have a solar panel on the roof. They’re a complete waste of money, a fad only. If we must be in the UK over the wintertime, we can relocate to the van in the yard if extra jumpers aren’t enough. And I say this only partially in jest – if you’re interested, get… Read more »
The relentless march towards central planning and away from the free market economy continues.
Bureaucrats make a mess with their regulations and meddling and then try to fix the problems they’ve created with more regulations and meddling. And they claim the mess the cause is actually the failure of the free market.
Sadly, the general public that doesn’t have the disposition or desire to think too deeply about these things swallow all this nonsense and go along with the idea that we need more regulation and central planning rather than less.
In short, the commies are taking over and we are all screwed.
The illustrated Road to Serfdom. http://davidmhart.com/blog/C20111228141034/E20120629095727/index.html
We are well out of this nonsense, although we are entwined with Europe. I can only hope that the promised bonfire of anything UK/EU is moved on at a good pace. They are going to crash the whole area. Germany..! Going from the richest, and an industrial powerhouse to rationing energy and food. Why can’t people see where this disaster is taking them.?
And physically connected to parts of it. Read yesterday’s article The U.K. Can Slash Energy Prices – But Only If We Stop Sending All Our Electricity to Europe which makes the point that UK based generators benefit from exporting to gain revenue via the interconnections, so we are not “well out” yet.
The barrage of lies continues unabated. The EU stopped the gas from Russia. If anyone is the enemy, these bureaucrats cause immeasurable misery and total calculated business deconstruction while they blame others. It’s sickening. I am now in the camp of CYEXIT. Cyprus Exit.
The EU cancelled the GAS and placed sanctions on Russia. These eurocrats are the enemy as they cause us misery, fear and calculated wealth destruction. It all seems so well orchestrated. Its time for CYEXIT like Brexit but for Cyprus.
As is par for the course, the EU doubles down on stupidity.
The EU and the UK governments created an existential energy problem to address a non-existential climate problem. As is the habit of governments around the world, they then want someone else to pay for the problem they made.
Windfall taxes will make the energy crunch longer lasting, if not permanent, as they rob energy companies of the incentives to produce cheap energy, not chase utopian net zero nonsense.
Net zero is exactly what Kemi Badenoch described it as, “unliateral economic disarmament.”. The Chinese, Indians, Russians and many South American countries are laughing at the West’s net zero driven self-destruction.
Kilo, or Mega? I know it’s from the Grauniad, but dividing the quoted price for a revenue cap by a thousand is more like it, if you look up open market prices at present!
The era of cheap fossil fuel is mostly over because these people are planning to tax the hell out of it. And they’re certainly well aware that this won’t affect corporate profits in the slightest, as all of this is just going to fall through to consumers. Long predicted catastrophies (We’ll run out of … in 10 years!!1) have to be manufactured if they won’t otherwise materialize themselves.
I’d prefer a headstone with The era of Frans Timmermans is now over inscribed on it. These We took it all and you shall nothing!-people are a pitiful disgrace.