A fair and effective tool for Europe’s energy transition
Fossil fuels still account for around 70% of the EU’s energy consumption, leaving it heavily dependent on imports and exposed to price shocks. In 2024 alone, the EU spent more than €375 billion on fossil fuel imports, while fossil fuel companies made €180 billion in taxable profits in the two years following Russia’s war of aggression against Ukraine. The profits of fossil fuel companies in the EU in 2022 exceeded €104 billion, a 45% increase from the previous year. They then fell by 21% in 2023, but remained significant at over €82 billion.
These profits coincided with higher energy prices for households and businesses.
Against this backdrop, a new study commissioned by T&E and CAN Europe shows that taxing fossil fuel company profits can play a key role in financing the energy transition while protecting consumers and workers.
A race to the bottom in corporate taxation
Over recent decades, corporate income tax (CIT) rates and tax bases have declined across most sectors, including downstream fossil fuel industries. Combined with generous exemptions and incentives, this has significantly reduced the effective tax rates paid by fossil fuel companies, even as profitability remained high. (....)