Global Spotlight Report #62: Fossil Fuel Subsidies

While some debate exists around what defines a subsidy, the United Nations Environmental Program defines fossil fuel subsidies as financial contributions that benefit an external organisation. Like many other countries, Australia provides a range of subsidies that help prop up fossil fuel projects and profits. According to the International Monetary Fund (IMF), Australia spent an…

Despite having a relatively clean energy and electricity matrix, Brazil has a strong structure of fossil fuel subsidies, which stimulates the country’s production and consumption of oil, natural gas, and mineral coal.A survey by the Institute of Socioeconomic Studies (INESC), released on November 16, 2022, at COP27 in Egypt, shows that Brazil spent BRL 118.2…

Federal greenhouse gas emissions (GGEs) data by economic sector in Canada has been relatively unchanged between 2005 and 2019 as emissions from oil and gas extraction, gas-powered trucks, and heavy-duty diesel vehicles continued to climb and be offset by decreases in other sectors. For example, a 66 Mt or 8.9% reduction in 2020 from 2019…

According to an IMF working paper on fossil fuel subsidies, East Asia and the Pacific region account for 48% of global energy subsidies. By country, China has been the biggest subsidizer in absolute terms, contributing 2.2 trillion  USD in subsidies in 2020, or nearly 15% of GDP and approx. 1,600  USD per capita. However, different…

Under the Regulation on the Governance of the Energy Union, EU Member States must phase out fossil fuel subsidies to meet the EU’s climate goals. The phase-out date is 2050; however, talks are underway within the EU to set an earlier end date. Additionally, in November 2021, the Glasgow Climate Pact, adopted by UN member…

France has limited domestic fossil-energy resources and, as a result, imports most of its oil and natural gas and all of its coal. Nuclear power drives the majority of French energy production and consumption; however, petroleum products still account for about 28% of energy use. All energy products are subject to a standard Value Added…

According to the report published by the International Institute for Sustainable Development (IISD) in 2021, Germany spent approximately 5.4 billion euros (5,97 billion dollars) on fossil fuel subsidies in 2019, including direct and indirect subsidies. According to the data provided by the OECD Inventory of Support Measures for Fossil Fuels: Country Notes, the German government’s…

Fossil fuel subsidies are intended to protect consumers by keeping prices low. Still, it comes with sizable fiscal costs, promoting inefficient allocation of an economy’s resources and encouraging pollution without being targeted at people with low incomes. Fossil fuel subsidy removal also reduces energy security concerns related to volatile fossil fuel supplies. Recent estimates reveal that…

According to Statista Research Department, in 2022, the Indonesian government invested approximately 77.5 trillion IDR in fossil fuel subsidies. This investment is less than the 2020 COVID-19 recovery budget, which heavily supported the fossil fuel sector and provided 95.3 trillion IDR directly to state-owned enterprises. The total fossil fuel bill in 2020 was 206 trillion…

According to the Public Finance for Energy Database, Japan’s finance from major government institutions for fossil fuels totaled  US$5.75 billion in 2021 (Figure 1). Figure 2, which shows the amount of public money spent on fossil fuels and clean energies from 2015 to 2021, shows that Japan has spent an average of 6-7 times more…

Fossil fuel subsidies have significantly contributed to Mexico’s environmental degradation, exacerbating climate change and worsening air pollution levels, among other detrimental effects. For example, According to a study by the International Institute for Sustainable Development (IISD), Mexico provided $16.6 billion in direct and indirect subsidies to the fossil fuel industry in 2018. Direct subsidies are…

The inventory in South Africa shows a total of ZAR 172 billion (USD 10.4 billion) of energy subsidies in 2020/21 see table below. The subsidies include fossil fuels, electricity, hydroelectricity, and nuclear, as well as carbon tax exemptions and bailouts for several carbon-intensive industries. About 77% of the subsidies are delivered as transfers of funds…

Like many other countries, Nigeria has a long history of providing subsidies to the fossil fuel industry. These subsidies were initially introduced to support the country’s oil industry’s development and ensure that fuel was affordable for Nigerian consumers. However, these subsidies have become a significant drain on the country’s finances and a barrier to developing…

Fossil fuel production has historically played a vital role in energy balance and the industrial sector of the Russian Federation. Everybody knows about the weight and importance of the sector, which has been among the top contributors to the federal budget for decades. (Russia’s export of goods and services in 2022 accounts for 628 billion…

Despite EU member states laying out comprehensive climate action plans to galvanize momentum in phasing out fossil fuels by 2030, analysts have conflictingly documented a 4% growth in fossil fuel subsidies across the EU between 2015 and 2019, displaying firm resolute in preserving significant flows of fossil fuel subsidies (FFS) that threaten to derail climate…

Despite all the efforts to increase the share of renewable energy sources in the domestic energy portfolio, fossil fuel-based power plants still comprise nearly 45 % of the total local installed energy capacity. A significant number of these plants are gas-fired, and some are imported coal-fired power plants. Local coal is by and large very…

The fossil fuel industry knew about the effects of CO2 on the planet as early as 1977 when their scientists sounded the alarm, 11 years before it became public. This hasn’t prevented oil companies from increasing production and profiting heavily from the world’s reliance on and addiction to oil, nor has governments globally subsidized the…