Dear Minister,

FuelsEurope has taken note of the letter of 21 August, co-signed by six Member States, calling for discussion on a possible EU-wide framework for the taxation of so-called windfall profits, in response to the current supply constraints affecting oil and oil products and the resulting surge in energy prices.

We fully recognise the significant burden high energy costs place on European households and businesses, as well as the responsibility of governments to consider effective and proportionate responses.

It is equally important that any policy response does not undermine investments and energy security. In this respect, renewed extraordinary taxation of Europe’s refining and fuels manufacturing industry would risk producing consequences contrary to the objectives pursued.

Refining is structurally a cyclical business. Periods of stronger margins, driven by global supply conditions and product-specific shortages, are not indicative of sustained profitability. Assessing the sector's performance solely based on short-term market conditions, while disregarding periods characterised by weak or negative returns, would result in an unbalanced policy approach that risks undermining the resilience and competitiveness of European refining operations.

Moreover, recurring recourse to windfall taxation would send a deeply concerning message to both domestic and foreign investors, at a time when the sector must mobilise substantial long-term investment to upgrade, transform and decarbonise its operations in support of the European Green Deal, the Clean Industrial Deal and the Union's long-term energy transition objectives.

Such measures risk:

• Discouraging investments in the efficiency, resilience and environmental performance of existing refining assets, as well as investments in the transition towards renewable and synthetic fuel production;
• Accelerating the closure of strategically important European industrial facilities;
• Increasing dependence on imported fuels and refined products, thereby exposing the EU greater external supply and price shocks;
• Weaken the security and affordability of energy supply for households, industry, defence and other critical sectors of the EU economy.

At a time when strengthening Europe's competitiveness, industrial base and strategic autonomy is high on the political agenda, policy predictability and investment certainty are more important than ever.

Against this background, FuelsEurope urges Member States to refrain from introducing new extraordinary taxation measures at either EU or national level and instead to preserve a stable, predictable and proportionate regulatory and fiscal framework.

Thank you for your attention.

Yours sincerely,  

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