High RWE profits reignite debate about windfall profit tax for energy companies

The high earning posted by many energy companies in the current supply crisis, including Germany’s RWE, have rekindled the debate on a windfall profit tax, according to an article in Rheinische Post (RP). “While many are struggling with rising prices, the accounts of some companies are filling up more and more,” Anja Weber, regional leader of the German Federation of Trade Unions in North Rhine-Westphalia (NRW) told the newspaper. “These excessive profits should be skimmed off to pay for further relief.” The regional leader of chancellor Olaf Scholz’s Social Democrats (SPD) in NRW said that a windfall tax would give companies and their shareholders a chance to show solidarity and take social responsibility. While the federal leadership of the Green Party has come out in favour of such a tax, chanceloor Scholz has said its implementation would be “technically very challenging,” RP wrote. The finance ministry, led by Free Democrat (FDP) minister Christian Lindner, rejected the demands, however. “I understand very well that high profits are perceived as unfair in view of rising energy prices,” said state secretary Florian Toncar from the pro-business FDP. “However, higher taxes for companies would only be a comforting measure that would not help consumers much or, in the worst case, would drive prices even further up.”

Rising fossil fuel prices have brought windfall gains to oil and gas producers around the world. However, higher electricity prices also benefit big companies with a focus on renewables, such as RWE. The company has argued that the profits it makes benefit the energy transition and announced it would spend about 5 billion euros – 30 percent more than originally planned – on expanding its green portfolio in 2022. The company also said it would not claim losses from a shortfall of Russian gas supply via a new gas levy.