Energy companies warn of halting renewable energy investments due to tax

this great energy and big banking rebel against the government for the new provisional tax which will demand 7,000 million euros from them over two years. The manager’s plan is to tax the net commissions and interest of financial institutions with annual revenues of more than 800 million, at a rate of 4.8%, and the sales of energy companies with a turnover of more than 1,000 million, at a rate of 1.2%.

According to El Periódico de España, a new tax that began the parliamentary process after the submission of a bill by the PSOE and United We Can, aimed at large corporations to finance some of the measures taken to alleviate the impact of the inflationary spiral on the economy. homes and businesses in the midst of an energy crisis. Major energy companies in the electricity and oil sectors warn that the new tax is curbing investment in the sector.

this Employers of major electricity companies Aelec, which brings together Iberdrola, Endesa and EDP– the industry finds the application of the new tax unfair as it does not have the extraordinary benefits that the Government wants to cut, and warns of the impact this will have on the renewable distribution schemes of companies that require million-dollar investment, and with it in general. economic activity and employment.

“The inclusion of a new tax, Additional uncertainty in companies undermines Aelec’s partners’ ambitious investment plans to accelerate investment. decarbonization Employers of electricity companies say it will reduce the dependence of our economy and energy on fossil fuels from abroad. “Imposing such a tax is clearly against the goal of mass incorporating renewable energy into the electricity system and facilitating the energy transition.”

this Employers of AOP oil companies integrating major companies in the industry such as Repsol, Cepsa, BP, Galp or Eni It also warns that “the resources of companies in the industry are essential to continue to invest, despite the regulatory uncertainty surrounding these investments, to achieve climate neutrality, which will require billions of euros in Spanish refineries with a commitment to industry and jobs.”

Oil companies grouped under the AOP, “billionaire investments and projects to make the refinery system the most sustainable” emphasizes the association. “Not putting these investments at risk requires a stable legal framework and an energy transition design that allows all alternatives to compete on an equal footing.”

No extra benefits?

Iberdrola Y Endesa, the country’s two largest electricity companies, They have already taken advantage of the presentation of their half-year results this Wednesday to inform the government that they will not find the extra benefits. a person who claims to seek taxes to prevent large corporations from taking advantage of the energy crisis and the spiral of price increases. In fact, both companies are directly taking advantage of the drop in profits they have recorded in the Spanish market so far this year.

Electricity companies have insisted on denying the existence of millionaire aid, which the Government says it wants to cut, since in recent months they have been selling all their electricity generation at prices much lower than the prices set in advance and by the electricity market. , therefore, therefore, they are not taking advantage of the increases.

Aelec emphasizes that the energy crisis has caused a very significant increase in costs that have reduced margins and profits. “A tax that is only based on income and does not take into account costs affects income that does not translate into higher margins for companies”, the Government proposed tax will derive some of its collection from regulated activities as regulated electricity. distribution networks whose rate (known as PVPC) or margins are determined by the Government and are not affected by the market situation.

The AOP emphasizes that the Government’s decision to tax unexpected earnings is arbitrary and unfair. “Profits are not distinguished by their ordinary or extraordinary nature, but are cyclical and are the result of market conditions developed by investments made at risk,” the employers of oil companies emphasize. “Profits that seemed extraordinary today were extraordinary losses in 2020 (…) It is pointless to want to tax these gains today. Basing the new tax on short-term benefits would only make sense if relief was provided for short-term losses such as those experienced in 2020.”

In this context, Iberdrola, which caused a conflict between the sectors, showed the natural gas and oil companies as the winner of the crisis this week. “The companies that increase their profits in Europe are not integrated electricity companies, but gas and oil companies,” he said.Iberdrola President Ignacio Sánchez Galán, at a conference where analysts indirectly pointed to competitors like Naturgy or Repsol. “We don’t have extraordinary advantages. Gas and oil companies are not in the same situation,” he said.

Repsol and the rule of law

Repsol, Spain’s largest oil company, now transformed into a multi-energy group with a growing presence in electricity and renewable energy, warned it would do everything it could to prevent “any arbitrary measure” from affecting the company.

“I firmly believe and believe that we live in a safe jurisdiction and I tell you that I have no doubts that our constitutional framework, the Spanish legal system and European legislation will protect us from any possible arbitrary interference,” he said. Josu Joan Imaz, CEO of Repsol. Against arbitrary measures, the rule of law and legal certainty are fortunately key in the EU. So I will be very clear: I am confident because we know that we have a solid constitutional and legal framework and that both the Spanish and European markets are markets that protect business activities from any arbitrary interference”.

Banking and credit shock

this financial sector employers AEB and CECA They are forming a common front to warn the government that the new tax will not serve to fight inflation and will even hamper economic recovery and job creation by stopping the issuance of loans by corporations.

According to the financial unions, such a measure will affect the credit and risk decisions of the institutions themselves and their competitive capacity in the single European market. Santander has come to estimate the credit contraction in the Spanish market at 50,000 million euros in the two years the tax will come into effect.

Source: Informacion


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