The Jesuit European Social Centre (JESC) has signed an open letter calling on Ireland’s Tánaiste and Minister for Finance, Simon Harris, to put the taxation of fossil fuel windfall profits on the agenda of the next EU finance ministers’ meeting, taking place in Dublin on 18-19 September.
The issue first gained prominence in Europe during the 2022 energy crisis, when Russia’s invasion of Ukraine disrupted energy supplies and sent prices soaring. While households and governments faced major costs, fossil fuel companies recorded extraordinary profits. The EU responded with a temporary solidarity contribution on surplus profits in the fossil fuel sector.
The revenues generated were significant: the EU measure collected €26.15 billion, with total proceeds estimated at around €28.7 billion. Yet this remained small compared with the roughly €340 billion that EU Member States spent on energy-support measures for households and businesses.
The issue is returning to the European agenda amid the war in the Middle East and renewed disruption to energy supplies. Six EU governments, Germany, Spain, Portugal, Italy, Poland and Austria, are calling for discussions on taxing oil companies’ extraordinary profits, as oil and fuel prices have risen sharply.
This is also a question of justice and of financing the ecological transition. Fossil fuel companies are major contributors to climate change, while the impacts of a changing climate are becoming increasingly costly and disruptive. A summer of extreme temperatures across Europe has once again highlighted the growing need for investment in both climate mitigation and adaptation, at a time when significant funding gaps remain.
Windfall taxation can therefore help ensure that companies benefiting from exceptional market conditions make a greater contribution to addressing the costs associated with them. Revenues could support vulnerable households while also helping finance the energy transition, climate adaptation and measures to protect communities from increasingly severe climate impacts.
The open letter, coordinated by Climate Action Network (CAN) Europe with the support of the Laudato Si’ Movement, brings together organisations from the environmental, social justice and faith sectors, including Global Witness, Transport & Environment, ActionAid Ireland, Friends of the Earth Ireland and now JESC.
With Ireland holding the Presidency of the Council of the EU, the September meeting provides an opportunity to bring the issue back to the European table. JESC’s support for the letter reflects a broader call for Europe to ensure that extraordinary fossil fuel profits contribute to a fairer and more resilient transition, rather than leaving the costs of energy and climate crises to society as a whole.
Telmo Olascoaga
JESC Ecology Officer
Read the open letter here.
