Klingbeil examines excess profit tax for oil companies - EU's windfall tax on energy firms nets €52 billion amid crisis profits
A windfall tax on energy companies was introduced across the EU in 2022 after Russia's invasion of Ukraine sent energy prices soaring. The measure, called a 'temporary solidarity contribution,' targeted firms making unusually high profits from the crisis. In its first year, the tax generated around €52 billion for EU governments. The tax applied to profits that exceeded the 2019–2021 average by more than 20 percent. Companies paid a 33 percent levy on these extra earnings. Germany led contributions with €15 billion, followed by Italy (€10 billion), France (€8 billion), Spain (€5 billion), and Poland (€4 billion). Germany alone collected nearly €2 billion from energy firms in 2022.
An additional €465 million was raised in the following year. The revenue aims to fund relief for those hardest hit by rising fuel costs. One proposed use is increasing the commuter tax allowance. Other measures to support low- and middle-income earners are also being considered. Now, German Finance Minister Lars Klingbeil is exploring a similar tax on oil companies' crisis-driven profits. Any EU-wide extension would require a proposal from the European Commission. The focus remains on providing quick financial help to those struggling with high energy prices.
The windfall tax has already brought in billions for EU governments. If expanded, it could fund further support for households facing high fuel costs. The next steps depend on decisions by the European Commission and national policymakers.
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