(Montel) The Danish government is considering ways to raise taxes on energy traders, it said on Thursday, one day after its largest trading firm posted a record EUR 2.2bn profit for 2022.
The coalition government had started looking into how it could tax windfall profits from energy traders, akin to what it has done to power producers since December last year, taxation minister Jeppe Bruus Christensen told a hearing in Parliament.
Energy traders are exempt from the EUR 180/MWh revenue cap introduced on power generation as a temporary measure across the EU late last year to re-distribute some of the sector’s extraordinary high earnings amid the energy crisis.
His comments come a day after Aarhus-based Danske Commodities posted a near 10-fold increase in pre-tax profit to a record EUR 2.2bn for 2022, with the company benefitting from its ability to swiftly move energy to where demand was highest.
Record high bill
Energi Danmark and Norlys Energy Trading have previously posted profits of EUR 1.2bn and EUR 0.5bn respectively for last year by exploiting similar market mechanisms at the same time as consumers faced record high power and gas bills.
“In my opinion, it is not obvious that some companies at a time of a crisis make extraordinary profits at the expense of ordinary consumers,” said Bruus Christensen. However, he added that it had so far been technically difficult to find a fair method for taxing windfall profits from energy traders.
One reason for this was that it was hard to find exact definitions on how to separate trading companies from other companies in the energy sector, he said.
Bonus moderation urged
The government also urged energy traders to show moderation on bonus deals, after media reports suggested some companies had offered lucrative schemes without caps to key employees.
“I have had a friendly conversation with the energy business, where the government made it clear that bonuses without caps are unacceptable for several reasons,” said energy and climate minister Lars Aagaard.
“One is that the size of the bonus in itself can be attackable, but also because it can require risk-taking in the companies, which means we are moving into a form of systemic risk.”
Energi Danmark recently sacked three traders because they refused to agree on substantial cuts to bonus deals that would have earned them around DKK 250m (EUR 33m) each, according to various media reports.