Exxon tries to block new EU windfall tax on oil companies

Exxon tries to block new EU windfall tax on oil companies

Exxon Mobil is suing the European Union in an attempt to force the bloc to scrap its new windfall tax on oil companies, according to reports on Wednesday.

The US oil giant argues Brussels has gone beyond its legal authority by imposing the levy.

Oil companies posted record profits this year, benefiting from soaring energy prices that have helped trigger a cost of living crisis across Europe.

The windfall tax on profits is "counter-productive," discourages investment and undermines investor confidence, Exxon spokesperson Casey Norton said on Wednesday.

He warned that the oil company will factor the tax into future decisions on whether to channel multi-billion-euro investments into Europe’s energy supply and transition.

"Whether we invest here primarily depends on how attractive and globally competitive Europe will be," Norton said.

The Financial Times first reported the lawsuit on Wednesday.

Several EU member states have introduced windfall taxes on oil and gas companies in a bid to reign in excess profits, help protect their populations from high prices and help diversify energy supplies.

Some 80 million European households are struggling to stay warm due to rising energy costs, reports the European Cooperation in Science and Technology (COST).

Windfall profit taxes imposed by Europe could cost at least 2 billion euros by the end of 2023, Exxon Chief Financial Officer Kathryn Mikells said in December.

Exxon said it invested 3 billion euros in the past decade in refinery projects in Europe.

The projects are helping it deliver more energy products at a time when Europe struggles to reduce its imports from Russia, the company said.

"We will continue to work with EU leaders to address these issues. Thoughtful policy is critical," the company said.