Opposition to proposals for windfall profit tax on hydro and nuclear power generation

A Finnish government proposal to introduce a windfall profit tax on hydro and nuclear power generation, with the revenues raised used to fund wind power and biofuels development, is being opposed by the country's energy and industry lobbies. The proposed tax -- to be set at EUR 3/MWh -- would raise around EUR 100 million a year, says the government. It is aiming for it to come into force in 2008. The Finnish Energy Industries' Federation (FEIF), however, has called for a "comprehensive re-think" of the windfall tax plan. "What energy intensive Finnish industries need are policies that do not disturb the normal operations of the power markets. If new measures are required for political, regional, employment or domestic grounds, these measures should disturb the market as little as possible," says FEIF's Juha Naukkarinen. "Taxing windfall profits is against the whole idea of climate policy as it aims to tax carbon free energy production. The ministry proposal is not aiming to tax production from existing wind turbines and yet it plans to tax hydro and nuclear which, like wind, do not produce carbon dioxide emissions. A new tax or fee would result in higher end-user prices and impair investment conditions," adds Naukkarinen.