Key findings
- Emissions from oil and gas produced by EU-headquartered firms since the 2015 Paris Agreement are set to cause an estimated €1.5 trillion in climate damages worldwide.
- Emissions from oil and gas produced by TotalEnergies, Eni and Repsol account for €1.1 trillion of the €1.5 trillion climate damages cost.
- EU companies are forecast to spend €124 billion on new oil and gas production projects over the next 10 years. This is despite new production being incompatible with the Paris Agreement to keep climate heating below dangerous levels.
- Fossil fuel companies made an estimated €82 billion in post-tax profits from their EU operations in 2023. A 33% climate tax on the industry’s profits would have raised €27 billion to fund climate action that year.
LONDON – New Global Witness analysis, produced in partnership with US climate scientists, shows that carbon emissions from EU-headquartered oil firms’ production since the Paris Agreement are set to cause an estimated €1.5 trillion in global climate damages. The analysis reveals that fossil fuel giants TotalEnergies, Eni and Repsol are responsible for over two-thirds of that total.
The news comes as protesters call on EU leaders convening at the European Council meeting this week for a permanent tax on fossil fuel firms’ profits to support energy-poor households and communities hit by climate disasters. Campaigners point to the injustice of spiralling energy costs for consumers, whilst oil giants cash in on the fallout of the Iran war.
Analysing the profits from the last energy crisis, Global Witness’ new study found that fossil fuel firms made an estimated €82 billion in post-tax profits from their EU operations in 2023. They say a fairer tax on this amount could have raised €27 billion to fund climate action.
Despite the urgent need to shift away from fossil fuels and keep reserves in the ground, the report also found that EU oil and gas companies are set to spend €124 billion on new production projects over the next 10 years.
Dominic Eagleton, senior campaigner for Global Witness said:
“As fossil fuel firms cash in from war and another cost of living crisis, these shocking figures reveal a hidden burden that Europe’s oil industry is saddling us with – an astronomical €1.5 trillion climate damages bill.
“Our study found that EU firms’ oil and gas emissions will mete out a colossal cost on communities around the world, with heavier flooding, fiercer heatwaves and rising sea levels driving up food prices, destroying infrastructure and endangering public health.
“It’s clearly wrong that ordinary people are being forced to pay for the destructive choices of fossil fuel giants. It’s time for governments to impose permanent taxes on polluters to lower energy bills and support communities hit by climate extremes.”
James Rising, associate professor at the University of Delaware said:
“The social cost of carbon is one of the most important tools we have for understanding the benefits of climate mitigation. Every ton of CO2 released to the atmosphere has consequences globally, for centuries, across a range of economic sectors, and the total of all those damages is the social cost of carbon. This tells us how much loss we are committing to every year, and provides a benchmark to compare against the price of mitigation policies.
“This methodology provides a basis for social cost of estimates currently in use by policymakers across the globe, including in Germany, Canada, Mexico, and several US states.”
The climate damages analysis was carried out by academics from Stanford and Delaware universities, using a ‘social cost of carbon’ model developed by the US Environmental Protection Agency (EPA).
The EPA quantified how much economic harm is caused by emitting an additional tonne of carbon dioxide into the atmosphere from when it’s released up to the year 2300.
Despite the quantifiable climate damage effects of fossil fuel companies’ emissions, the study notes that there are currently no direct, EU-wide obligations to help pay for the costs of climate breakdown.
Following recent polling which showed that 87% of adults across Germany, France, Italy and Spain support taxing fossil fuel companies, campaigners at Global Witness are supporting calls for a new permanent tax on fossil fuel industry profits.