Energy

Fuel: what are windfall profits, how much are they worth, and what are the positions of the government and the EU?

According to Transport & Environment, the windfall profits made by Europe’s major energy companies in the first half of 2026 are estimated to amount to 7.5 billion euros

by Pietro Menzani

26 August 2026

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3' min read

Translated by AI

Versione italiana

3' min read

Translated by AI

Versione italiana

In the first half of 2026, eight major oil companies – according to estimates by Transport & Environment (T&E) – are said to have generated windfall profits of 7.5 billion euros in Europe. Record revenues for energy companies and soaring petrol and diesel prices have prompted Italy and five other EU countries to call on Brussels to establish a common regulatory framework for the taxation of windfall profits.

Extra profits

Extraordinary profits are earnings that are significantly higher than expected, which companies manage to generate rapidly as a result of a particular external event, such as a geopolitical crisis that leads to a sudden rise in prices. In the case of oil companies, the event was the outbreak of the conflict between the United States and Iran, triggered by the US operation ‘Epic Fury’ which began on 28 February, creating a favourable market environment for companies in the energy sector. The companies’ profits have risen significantly due to the surge in energy costs caused by tensions in the Middle East and restrictions on traffic through the Strait of Hormuz.

T&E states that the 7.5 billion in extra profits attributable to the EU generated by the eight companies – Shell, BP, TotalEnergies, Eni, Orlen, Repsol, OMV and Moeve – would account for 42 per cent of the global total (just under 18 billion: 3.7 billion euros in the first quarter and 14.2 billion in the second). Of this, 1.6 billion euros were generated in the first quarter (which included just one month of the war) and 5.9 billion in the second quarter (the first to be entirely during the war).

The EU’s position

The Ministers of Economy and Finance from six EU countries – Italia, Austria, Germany, Poland, Portugal and Spain – have therefore once again called on the Council of the European Union, currently under the Irish Presidency, to establish a common regulatory framework regarding the taxation of oil companies’ windfall profits. A similar request had been submitted by the same countries – with the exception of Poland – last April.

Ahead of the informal meeting of the 27 Member States’ economy ministers scheduled for 18 and 19 September, the EU’s response, however, has been clear: a Commission spokesperson emphasised that this is a ‘matter for national authorities’ and that Member States can already take action in accordance with their respective laws, provided they comply with EU law.

EU countries, she continued, “can already make use of their national tax powers to address the cost of social equity and introduce measures to tax windfall profits if they so wish, as set out in the ‘AccelerateEU’ communication of 22 April”. For its part, the Commission “will respect the decisions of Member States” and “will provide assistance and best practice on national measures, as well as assessing their impact on the single market”.

Hence the criticism from Democratic Party leader Elly Schlein, who stated that ‘Meloni and Giorgetti have no excuses. They must get a move on and take action. The energy crisis is hitting households and businesses hard. Stopgap measures and temporary extensions are no longer enough. We need robust support measures, which will help, in particular, those who are most vulnerable and at risk.”

The opening of the EU Council

On the afternoon of Tuesday 25 August, the spokesperson for the Irish Presidency of the Council of the EU made a statement, noting that ‘governments across Europe are rightly paying close attention to developments in the energy markets and their impact on households, businesses and the economy as a whole’, adding that “the Tánaiste, Deputy Prime Minister and Minister for Finance, will discuss with his European ministerial colleagues the most appropriate way to address the issues raised in their letter”.

The government’s objectives

Meanwhile, the government has extended the 17-cent reduction in excise duty on diesel until Wednesday 26 August. A further extension of the measure is expected to be announced at today’s Cabinet meeting.

Sources at Palazzo Chigi have indicated that, with regard to the issue of the levy on windfall profits in the energy sector, the government’s position remains firm on the need to establish a common regulatory framework at European level: ‘Coordinated action at European level is the only means of ensuring fairness and competitive neutrality: by requiring all oil and energy companies operating within the EU single market to contribute equally, we avoid creating commercial discrimination and safeguard the competitiveness of the national industrial system.’

Indeed, according to the government, ‘action confined solely to the borders of a single country risks creating clear market imbalances. If the measure were applied exclusively at national level, it would end up penalising the state-owned energy operator (and domestic energy companies operating mainly in the domestic market), placing them at a disadvantage compared with international competitors operating in neighbouring Member States, where no such levies exist’.”

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