Fossil fuel companies across Europe raked in huge profits last quarter, including Italian energy giant Eni, whose net profits quadrupled while low-income Italians struggled to pay their energy bills. The EU must make the polluters pay and not the most vulnerable in our society.
Italy is a country where people spend proportionately more of their income on electricity, gas and other housing costs than the rest of the eurozone. Because of this, rising energy prices have significantly impacted the spending of households on lower incomes. However, the news was merely reported by the Italian press as an economic and financial success, overlooking the damaging social impacts of rising energy poverty.
ENI is not the only major oil company to have earned such high profits recently. On the same day, Exxon and Chevron reported big revenues for the same 2022 quarter, ranging from $5.5 billion and $6.3 billion respectively.
ENI, together with these other oil companies, benefited from increasing oil and gas prices linked to the post-pandemic recovery and Russia’s invasion of Ukraine. BP’s chief Bernard Looney even was quoted last November to have called the current energy market “a cash machine” .
In a context where oil giants continue to fuel the climate crisis, while massively profiting from the market, firm action should be taken to prevent their profits increasing at the expense of low income households.
Extraordinary times require extraordinary measures. The European Commission broke a longstanding taboo when it presented the REPowerEU plan, a set of European actions for more affordable, secure and sustainable energy. One of the more notable measures is that the Commission will allow Member States to impose a tax on windfall profits generated by energy companies and return the revenues for redistribution to consumers. According to the International Energy Agency such windfall taxes could generate up to €200 billion in 2022.
In parallel, on the other side of Rue Belliard in Brussels, the European Parliament is about to vote on the European Union’s Emissions Trading System (EUETS) revision and is frantically discussing the potential implementation of an ETS2 for transport and buildings.
One of the crucial points of the proposal is how to ensure that big polluters – and not poor households – pay the bulk of the costs related to the implementation of an ETS2.
If the climate transition has any hope of working, the fossil fuel industry should be required to absorb part of the EU’s new carbon price, while using the revenues wisely to break free from fossil fuels.