Protecting people and businesses from soaring energy prices could cost European governments up to €38.6 billion in 2026.
That has been claimed by climate organisations across Europe.it comes with Europe currently in the grip of the second heatwave of the summer.
They are calling on political leaders to introduce a new, permanent tax on fossil fuel profits.
Campaigners argue that the companies who. they allege, are “driving the climate crisis” should “contribute more to addressing its social, economic and climate consequences.”
They are now calling for “polluter pays” taxes to be introduced at the national and EU-wide level.
They are also calling on leaders to support fossil fuel taxation in the forthcoming UN Tax Convention negotiations, arguing that a global solution “is also essential.”
Climate Action Network Europe claims that Europe’s biggest oil and gas corporations “continue to rake in enormous profits, while households and businesses struggle with the rising cost of living and communities face escalating climate impacts.”
It alleges that some leading European oil and gas companies made combined profits of $22 bn in the first quarter of this year, “the highest quarterly total since 2022.”
Isabelle Brachet, Senior Fiscal Reform Policy Coordinator at Climate Action Network Europe, said, “Protecting people and businesses from soaring energy prices could cost European governments up to €38.6 billion in 2026.
“That bill should not be paid through cuts to healthcare, education or climate action. Instead, governments should tax the colossal profits of fossil fuel companies.
“The revenues could fund energy vouchers, social tariffs, affordable public transport, and lower electricity taxes.
“An EU Regulation would ensure the coordinated introduction of such a tax in all Member States, reducing tax avoidance and sending a clear signal to investors to shift from fossil fuels to renewable energy.”
Further comment comes from Markus Trilling, Senior Policy and Advocacy Officer at the European Network on Debt and Development (Eurodad).
He said: “Revenues generated by a permanent fossil fuel tax could be invested in measures to reduce energy poverty, support public services, accelerate the clean energy transition and provide climate finance for countries facing the worst impacts of a crisis they did little to cause. We need action in Europe but we also need global action.
“Countries across the Global South are facing mounting climate damages, crippling debt burdens and economic pressures, despite contributing only a fraction of historic greenhouse gas emissions.
“European leaders have the opportunity to support a mechanism for polluter pays taxes at the global level in the UN Tax Convention at the next round of negotiations in August.”
Elsewhere, Nicolas Bormann, Climate Justice Policy Officer at CNCD-11.11.11, said, “Fossil fuel companies are banking on wars to harvest gigantic profits while benefiting from tax optimisation to an indecent degree.
“At the same time, we are bearing the costs of heatwaves, floods and major energy bills. This climate injustice must end.
“Governments have the power to reclaim these gargantuan profits by taxing them at the source, without impacting the consumers.
“Then these funds must be redistributed towards international solidarity and climate action, to ensure a just and equitable transition away from fossil fuels, both in the North and in the South.”
