Ribera begins review of tax on energy companies: “We are no longer talking about extraordinary benefits”

Ribera said in an interview with Efe Agency within the framework of the Dubai climate summit (COP28), “It is important to determine whether the extraordinary benefits tried to be detected in this figure continue.” “Ordinary taxation may be adjusted modularly, but We are no longer talking about extraordinary benefits, we are talking about something else“We analyze what the real references are, what the needs are, and what is the best way to solve this issue technically.”

At the worst of the energy crisis, the Government approved a new provisional tax of 1.2% on sales (but not profits) of large energy companies billing more than €1,000 million a year, to be applied for two years. The executive, at least its socialist wing, is now open to reconsidering the tax after major groups threatened to cripple billions of dollars of investments if the government agreement between PSOE and Sumar, which pledged to extend the tax, was approved.

The most outspoken in these warnings was Repsol, the Spanish oil company most affected by the tax, and went so far as to state that projects involving a green hydrogen investment of 1 billion 500 million euros could leave Spain and go to other countries. Like Portugal and France. Other large energy groups such as Cepsa, Iberdrola, Endesa or Naturgy are demanding greater stability and regulatory predictability to be able to afford the investments necessary to promote green project plans.

Choose green investments

Vice President Ribera pointed out that it is necessary to determine whether energy companies are making extraordinary profits in the context of the current price moderation, but also emphasized that a major reinvestment is required. [por parte de las compañías] for the transformation of the energy system”.

Moreover, Ribera emphasized that the sooner this transition can be made through the widespread deployment of renewable energies, “the more stable, predictable, clean and affordable energy prices will be.” He emphasizes that “if there are extraordinary profits, let’s see how we can contribute” and “if there is a significant increase in profitable benefits that requires a response”, but we also need to think about how companies can “ensure their protection”. or increase that reinvestment.”

HE Legislative agreement between PSOE and Sumar, allowing the restoration of a progressive coalition government, he considers Continuing taxes on major energy companies and major banks beyond the two years originally planned. “We will review the taxes imposed on banks and energy companies with a view to readjusting and maintaining them once their current application period expires, so that both sectors continue to contribute to tax fairness and the maintenance of the welfare state,” according to the text. It’s a plan that puts major energy companies in a state of war over the possibility that the extraordinary tax (which has already been appealed by many of the companies involved) will become permanent.

Brussels declaration

The European Commission warned last week, in a report on the extraordinary measures adopted by member states to mitigate the effects of the energy crisis, that the price context that justified the implementation of these measures last year had changed. “Looking at the development of fossil energy markets, the situation is very different from the current situation” at the time when Brussels approved the implementation of exceptional measures in 2022.

In the report, the Commission stated that “the decline in energy prices throughout 2023, a more uncertain economic environment and the increase in capital costs led companies in the energy sectors to record a decline in oil, gas and coal.” Profits compared to 2022’s extraordinary profits.