Overview of proposed energy industry levies across Europe and Spain
With details still unclear about Europe’s forthcoming energy sector levy and ongoing congressional discussions around the PSOE and Podemos plan in Spain, the core idea remains consistent. Both proposals aim to cushion consumers from rising energy costs by reducing the impact of profits on large players. Yet the mechanisms differ. In Spain, the approach is framed as a non tax public patrimony measure that functions like a tax in practice, while in Europe it is described as a solidarity contribution. Each country will decide the specific legal instrument to use to achieve this objective. Here are notable distinctions observed so far across the discussions.
Impact on profits and income
Spain’s proposed measure, although labeled a tax, operates as a patrimonial instrument with a public, non tax nature designed to sidestep certain legal constraints. It contemplates a 1.2 percent levy applied over two years to the total income of all energy sector players with annual turnover above one billion euros. In contrast, the European framework envisions a coordinated, single, and temporary solidarity contribution applied at a rate of 33 percent. The European model has produced unexpected benefits in 2022, with higher gains than in the preceding years of 2019, 2020, and 2021 according to official tallies.
Scope of the levy across the energy sector
Spain’s government intends the energy tax to cover the broad energy sector, including electricity, gas, and oil companies, and grouping major private operators. The National Markets and Competition Commission lists eleven key players, among them Endesa, Iberdrola, Naturgy, EDP, Acciona, Repsol, Cepsa, BP, Peninsula Petroleum, Petronieves, and DISA, based on the latest report released by the steering body in mid-2021.
Conversely, the European plan targets firms engaged in oil, gas, coal, and refining, but explicitly excludes electricity companies. Leaders from major utilities, such as Iberdrola, have criticized this focus, arguing that benefits of oil and gas sectors remain significant at present. The disagreement illustrates how different sectors and business models shape policy design across the continent.
Timing and duration
The Spanish measure is described as a patrimonial benefit that impacts income taxes for two years, spanning 2022 and 2023. The European proposal uses a 2022 fiscal year as its baseline, with the European Commission promising a review by October of the following year to assess national authorities’ visibility into the solidarity mechanism and to adapt as needed.
Where the funds go
Under Europe’s solidarity approach, funds are earmarked to support energy consumers, especially households at risk from high energy prices. Additional allocations aim to reduce energy consumption, assist energy-intensive industries, and strengthen Europe’s energy autonomy. Investments are also directed toward energy transition initiatives and new technologies at the European level. In Spain, the patrimonial tool is not tied to a single spending line, so the revenue is not automatically designated for a specific program. The design relies on broader fiscal policy mechanics rather than a targeted spending envelope.
The European framework explicitly ties the proceeds to protective and modernization goals within the energy sector and the broader economy. This reflects a broader strategy to stabilize prices, shield vulnerable households, and accelerate the transition to cleaner energy sources while supporting industrial competitiveness across member states.