Five EU Countries Want to Implement Windfall Tax
Five European Union countries have called for an extraordinary tax on energy companies’ profits, or windfall tax, in response to the rise in fuel prices due to the Iran war. This was stated by the finance ministers of Germany, Italy, Spain, Portugal, and Austria.
“That step could help fund aid for consumers facing high energy prices and serve as a signal that ‘we are united and capable of acting’,” they said in a letter to the European Commission, quoted from Reuters on Monday (27/4/2026).
“It would enable the financing of temporary aid, especially for consumers, and curb rising inflation without adding to the public budget burden,” the ministers continued.
This policy, according to the five ministers, is seen as sending a clear message that those profiting from the war’s consequences must do their part to alleviate the burden on the general public.
Oil and gas prices have surged since the US-Israel attacks on Iran began on 28 February, creating a price shock similar to the energy crisis Europe experienced after Russia’s invasion of Ukraine in 2022—although EU countries now source more energy from renewables.
In the letter addressed to EU Climate Commissioner Wopke Hoekstra, the ministers pointed to a similar emergency tax in 2022 to address high energy prices.
“Given the current market distortions and fiscal constraints, the European Commission must promptly develop a similar EU-wide contribution instrument based on a solid legal foundation,” they wrote.
A European Commission spokesperson confirmed they had received the letter and are considering the proposal.
“In general, the Commission works closely with member states on possible targeted policy measures in response to the current energy crisis facing Europe,” the spokesperson said.
The letter did not provide details on the proposed windfall tax rate or which companies should be subject to it.
The German Fuels and Energy Association, representing oil refineries and petrol stations, said the impression that these companies are unfairly profiting is inaccurate and there is no justification for a windfall tax.
“Our main goal is to maintain the supply of fuels and motor vehicle fuels in Germany under increasingly difficult conditions,” the association stated in an email.
The bloc’s energy chief said on Tuesday they are considering reviving 2022 energy crisis measures, including proposals to cap network tariffs and electricity taxes.
The EU introduced a series of emergency policies in 2022 after Russia cut gas supplies. These included an EU-wide gas price cap, a tax on energy companies’ windfall profits, and targets to limit gas demand.
Europe’s heavy reliance on imported fuels makes it vulnerable to the impact of Middle East conflicts on global energy prices. Gas prices in Europe have risen more than 70% since the US-Israel war with Iran began on 28 February.
EU Energy Commissioner Dan Jorgensen said they are highly concerned in the short term about the supply of refined petroleum products such as jet fuel and diesel to Europe.