EU Energy Crisis Response Needs a Windfall Tax on Oil Companies to Fund Electrification of Transport

Transport & Environment (T&E) has criticised the European Commission’s recent emergency measures addressing the ongoing energy crisis, describing them as insufficient and lacking ambition. While the Commission has introduced steps to ensure fuel supply stability and provide limited consumer and industrial protections against rising oil prices, it notably refrained from implementing a windfall tax on oil companies. This omission is seen as a missed opportunity to curb excessive profits generated by oil firms amid the conflict in the Middle East and to channel those funds into accelerating the electrification of transport across Europe. T&E highlights that oil companies stand to gain an estimated €37 billion in windfall profits from European consumers during the current crisis. The organisation argues that taxing these gains could finance vital incentives for the adoption of electric vehicles (EVs) and e-trucks, which are currently absent from the EU’s strategy. Furthermore, T&E urges EU lawmakers to uphold stringent CO2 targets for carmakers under the Automotive Package, warning that weakening these standards—as industry lobbyists are demanding—could result in 40 million fewer EVs on European roads by 2035, undermining efforts to reduce fossil fuel dependency. The NGO also emphasises the need for substantial investment in energy infrastructure to support a resilient and balanced energy network. While the Commission’s financial initiatives under AccelerateEU to promote sustainable aviation and maritime fuels mark a positive development, T&E stresses that electrification and efficiency improvements in shipping could yield immediate cost savings. The organisation warns against diluting existing fuel mandates or emissions trading schemes, which are crucial for achieving long-term energy independence and reducing Europe’s vulnerability to future crises. Antony Froggatt, Senior Director for Aviation, Shipping and Energy at T&E, expressed disappointment at the Commission’s approach, describing it as a “half measure” that fails to provide the necessary tools to alleviate financial pressures on households and small businesses. He called for robust windfall taxes on oil companies to redistribute the unexpected profits and fund the transition to affordable EVs. The response, he argued, should have been more comprehensive to meet the scale of the challenge and accelerate the shift away from fossil fuels.