• Europe is imposing a windfall tax on energy companies.
• The EU intended to raise more than €140 billion.
• It would be distributed among its 27 member nations.

In order to relieve the burden that this winter’s spike in costs is putting on people and businesses, Europe is imposing a windfall tax on energy companies.

According to Ursula von der Leyen, president of the European Commission, the EU intended to raise more than €140 billion (£121 billion), which would be distributed among its 27 member nations.

She also demanded a minimum 5% reduction in electricity use during peak hours, despite plans to control the price of natural gas, a significant import from Russia, having been postponed.

“It is wrong to reap incredible record profits and revenues while the war is going on and on the backs of our customers,” Ms von der Leyen said. The fee would go toward helping consumers pay their rising energy bills since Russia cut back on gas shipments after invading Ukraine.

Following her remarks, the benchmark gas price in Europe increased to €208 per megawatt hour (MWh), a significant decrease from the record-breaking €343 paid in August but a 200 percent increase over the previous year.

In contrast, the new Liz Truss administration has decided against a windfall tax and plans to use borrowing to fund the UK’s $150 billion energy bill reduction program.

In response to worries about potential delays, it yesterday pledged to retroactively implement an energy assistance program for struggling firms.

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