Brussels has said it will raise more than €140bn from windfall taxes on energy companies’ profits to soften the blow of record high energy prices this winter.

With energy prices soaring in the wake of Russia’s invasion of Ukraine and fears growing of shortages this winter, Brussels plans to funnel some of the windfall profits from energy companies back to households and businesses to lower bills.

European Commission president Ursula von der Leyen said on Wednesday that, “in our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefiting from war and on the back of consumers.”

“Profits must be shared and channeled to those who need it the most,” she added. “Our proposal will raise more than €140bn for member states to cushion the blow directly.”

The emergency levy, which will be applied to non-gas power producers, will be accompanied by proposals for a mandatory cut to electricity demand and a

“solidarity contribution” from fossil fuel companies that will go towards easing the impact of rising energy bills. Energy ministers from member states are due to meet on September 30 to discuss the commission’s proposals.

Von der Leyen also told the European parliament that the commission would work on a comprehensive reform of its energy markets to break the “dominant influence” of the price of gas on electricity costs.

The design of these markets was not “fit for purpose” and needed to be redesigned so consumers could better reap the benefits of low-cost renewables, she said.

Von der Leyen was giving her State of the Union address in a plenary session of the European Parliament in Strasbourg, with Olena Zelenska, wife of Ukraine’s president Volodymyr Zelenskyy, in the audience.

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