ExxonMobil is suing the European Union (EU) to halt its new windfall tax on oil companies.
A windfall tax is levied on businesses that gained from something they did not cause.
Due in part to supply concerns following Russia’s invasion of Ukraine, energy companies are receiving a substantial premium for their oil and gas.
Exxon, though, has accused Brussels of exceeding its legal jurisdiction, describing the proposal as “counterproductive.”
In October, ExxonMobil announced a quarterly profit of about $20 billion (£17.3 billion).
However, the corporation and other big oil and gas industry participants have claimed that a crackdown would hinder investment.
In September, Ursula von der Leyen, the head of the European Commission, unveiled an emergency plan requiring big oil, gas, and coal corporations to pay a “crisis contribution” on their increased earnings in 2022.
A 33% tax was announced for this year’s profits, which were 20% greater than the average of the preceding three years.
In a lawsuit filed with the EU’s Luxembourg-based General Court, Exxon also contended that the tax harms investor trust.
Casey Norton, a spokesperson for Exxon, told Reuters that the company’s news to invest in Europe depended mostly on the continent’s attractiveness and worldwide competitiveness.
In a meeting with investors earlier this month, the chief financial officer of ExxonMobil projected that the EU tax would cost the company “nearly $2 billion.”
The European Commission has stated that it “notes” Exxon’s complaint.
In a statement released on Thursday, its spokesperson indicated that the General Court will now decide the case.
Arianna Podesta said in a statement, “The Commission maintains that the measures in question are completely compatible with EU legislation.”
As a result of Russia’s invasion of Ukraine, the EU is mostly attempting to wean itself off Russian energy, but this has forced it to scramble for alternate suppliers.
EU ministers estimate that they can earn €140bn (£123bn) via levies on non-gas power producers and providers who are making above-average profits due to current demand levels.
