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The EU’s Eighth Environment Action Programme, in line with EU and international commitments, calls for an immediate phase out of fossil fuel subsidies. Fossil fuel subsidies remained relatively stable at about EUR 56 billion (2022 prices), over the period 2015-2021, yet increased to EUR 123 billion in 2022. This can be interpreted as a result of high energy prices related to post-COVID recovery and Russia’s invasion of Ukraine. Most EU Member States have no concrete plans on how and when they will phase out these subsidies, therefore, it is unlikely but uncertain that the EU will make much progress towards phasing out fossil fuel subsidies by 2030.
Note for all figures: All monetary values are expressed in 2022 prices. Data for 2022 are provisional as fossil fuel subsidy figures (about 7% of total) are still under evaluation.
Fossil fuels are non-renewable sources of energy, and their production and use contribute significantly to climate change and pollution. In line with international commitments — such as the G20 Pittsburgh Summit and COP26 Glasgow Climate Pact — and the European Green Deal , the EU’s Eighth Environment Action Programme (8th EAP) calls for an immediate phase out of subsidies for fossil fuels (such as coal, gas and oil). Progress towards this is monitored as part of the European Commission’s State of the Energy Union report .
Fossil fuel subsidies remained more or less stable, at about EUR 56 billion (2022 prices), over the period 2015-2021. The increase of EUR 5 billion from 2015 to 2018 was mainly due to an increase in subsidies in the transport and industry sector. The decrease of EUR 4 billion from 2018 to 2021 was mostly due to decreases in the energy sector and decreases in subsidies for coal and lignite. The growth in fossil fuel subsidies in 2022 can be attributed to the energy price crisis and was intensified by the Russian invasion of Ukraine as EU Member States implemented more than 230 temporary subsidy measures to protect households and industries .
Member States are required to include information in their annual national energy and climate progress reports on phasing out energy subsidies, particularly fossil fuels. According to these reports , many countries have ambitions to move away from fossil fuel use, but only a few (Denmark, Germany, Ireland, Italy and Sweden) have translated these ambitions into laws or clear plans that specify when they intend to phase out fossil fuel subsidies .
It can be expected that the sharp rise in fossil fuel subsidies is an outlier as 47% of total fossil fuel subsidies in 2022 amounting to EUR 58 billion have a planned end-date before 2025 and only about 1% have an end-date between 2025 and 2030. There is no end-date provided or the end-date is after 2030 for the largest part of fossil fuel subsidies .
An assessment of the progress towards phasing out fossil fuel subsidies – based on the amount of fossil fuel subsidies of 2022 – is difficult in the current political and economic environment. The EU Member States responded very different as most of them provided generous financial support through fossil fuel subsidies. On the contrary, the amount of fossil fuel subsidies declined in four EU Member States (Czechia, Denmark, Poland and Slovakia) between 2021 and 2022. When analysing the trend between 2015 and 2022 then seven EU Member States made progress in phasing out fossil fuel subsidies as fossil fuel subsidies are lower in these countries in 2022 as compared to 2015 (in 2022 prices).
It should be noted that, in terms of absolute value, that more than 60% of all fossil fuel subsidies granted in 2022 were spent in three countries: Germany (EUR 21 billion), Italy (EUR 25 billion) and France (EUR 30 billion).
The extent to which fossil fuel subsidies contribute to national economies also varies considerably across Member States. Fossil fuel subsidies represent the highest shares of gross domestic product (GDP) in Portugal, Greece, Cyprus, Hungary and Malta (1.3%) and the lowest share in Slovakia, Sweden, Czechia and Denmark (less than 0.2% of GDP) .