FT News Briefing EU wants tax to fight ‘astronomic’ electricity bills
Sep 7, 2022
The EU is eyeing a windfall tax on energy companies to combat soaring electricity bills, sparking debates on fairness across the energy sector. Meanwhile, Zambia's $1.3 billion IMF bailout raises questions about how China will respond to defaults, offering a cautionary tale for other debt-laden nations. In the U.S., banks are facing tighter scrutiny, leading them to overhaul messaging practices to avoid harsh penalties, highlighting a significant shift in financial industry operations.
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EU Windfall Tax Plan
- EU plans to tax windfall profits of energy companies, stemming from inflated electricity prices.
- These prices are tied to gas prices, which have surged due to the war in Ukraine, benefiting even renewable energy producers.
Scope of EU Energy Tax
- The proposed tax will likely encompass all energy producers, including renewable energy companies.
- This broad application aims to avoid disproportionately impacting renewables while ensuring fossil fuel companies contribute.
EU Tax Aims
- The EU aims to use the tax revenue to support vulnerable consumers and at-risk industries.
- Energy-intensive sectors like aluminum, zinc, and fertilizer face potential shutdowns due to high energy costs.