Exxon sues the EU for setting a tax on windfall profits

US oil company Exxon Mobil Corp it is suing the European Union in an attempt to force it to scrap the bloc’s new windfall tax on oil groups, arguing that Brussels exceeded its legal authority in imposing the tax.

The tax on exceptional earnings it is “counterproductive,” discourages investment and undermines investor confidence, Exxon spokesman Casey Norton said Wednesday.

Exxon will take the tax into account when considering future multi-billion dollar investments in Europe’s energy supply and transition, it added.

Whether we invest here depends mainly on how attractive and competitive Europe is globally,” Norton said.

The Financial Times first reported on the lawsuit on Wednesday.

Windfall taxes imposed by Europe could cost at least $2 billion through the end of 2023, the company’s chief financial officer, Kathryn Mikells, said in a call to analysts on Dec. 8.

Exxon said it has invested $3 billion in the past decade in refinery projects in Europe. The projects are helping it deliver more energy products at a time when Europe struggles to cut imports from Russia.

“We will continue to work with EU leaders to address these issues. Thoughtful policy is critical,” the company said.