Spain is urging the European Union to establish a climate adaptation fund financed by a permanent levy on oil and gas profits and increased common debt issuance. Spanish minister for ecological transition Sara Aagesen Muñoz outlined the proposal in a letter to EU climate commissioner Wopke Hoekstra, citing the hottest summer on record and devastating droughts and wildfires across western Europe. Triodos bank estimates extreme heat could reduce EU GDP by 1 per cent in 2026 and 2.3 per cent by 2050, while economists peg this summer's drought costs between €50bn and €180bn.

The push follows a joint letter from finance ministers of Germany, Austria, Italy, Portugal, Poland, and Spain advocating a Europe-wide windfall tax. The measure will be discussed at an informal gathering in Dublin on September 18-19. However, the European Commission has resisted new windfall taxes, suggesting member states implement national schemes instead; Portugal has already introduced a 33 per cent tax on 2026 extraordinary profits.

Industry executives have pushed back. Exxon Mobil CEO Darren Woods warned penalizing the industry is shortsighted and revealed the company cancelled European investments after the last windfall tax. BP CEO Meg O'Neill called new taxes a "highly flawed response," while Total Energies CEO Patrick Pouyanné threatened to end a French petrol price cap if new taxes are imposed.