Post by Fortum

How can tax policy better support Europe’s energy transition and competitiveness?   Last week, Fortum co-hosted a roundtable with Ørsted in Brussels, bringing together representatives from the European Commission, the European Parliament, industry and other stakeholders. The discussion focused on how the EU tax framework can better support investment and sustainable growth. Thank you to everyone who joined the discussion — and especially to Benjamin Angel, Peter Lund Christiansen and Mikael Lemström for their valuable perspectives and thoughtful exchange. A central message from the discussion was that Europe’s decarbonization, electrification and energy security objectives will require significant investment in long-term, capital-intensive infrastructure, including grids, cross-border connections and energy storage. Pumped storage hydropower, such as the projects under development in Finland and Sweden, are examples of the type of investments needed. The discussion also reinforced the importance of a tax framework that provides predictability, proportionality, and the right conditions for long-term capital commitment. Furthermore, the discussion highlighted that while responsible businesses see tax as a natural part of doing business, certain rules can unintentionally hinder strategically important investments through complexity and financial stress. Interest deduction limitations, lack of harmonization and overlapping regulation increase the cost of capital, especially for capital-intensive projects. At the same time, while it is important to fight against abusive tax behavior, there is an equally strong need for a balanced tax framework that provides predictability, equality, proportionality and closer alignment with realities of long-term infrastructure investments. 💡 A well-functioning EU tax framework can support investment, strengthen electrification and enhance Europe’s competitiveness.   #TaxPolicy #EnergyTransition #Competitiveness