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Fossil fuel subsidies in draft EU National Energy and Climate Plans

Working papers

Written by Ipek Gençsü

This report reviews the information provided on fossil fuel subsidies in the draft National Energy and Climate Plans (NECPs) and confirms the European Commission’s findings, highlighting additional opportunities and pitfalls in government reporting on subsidies and subsidy phase-out efforts. It aims to serve as a benchmark for the finalisation of NECPs due by the end of 2019.

Key messages:

  • European Union (EU) Member States are required to report on their fossil fuel subsidies and their plans to phase them out as part of their NECPs. But our analysis shows that none of the draft NECPs submitted provides a comprehensive overview of the country’s fossil fuel subsidies nor a comprehensive plan to phase them out.
  • While several countries reiterate their existing commitments to end fossil fuel subsidies, many do not discuss fossil fuel subsidies at all – or report on various subsidy measures but fail to recognise them as such. Some draft NECPs, such as those of Germany, Greece, Poland, Slovenia and the United Kingdom, even discuss the introduction of new fossil fuel subsidies without recognising that this is incompatible with subsidy phase-out commitments. Others still label various subsidy measures as ‘low-carbon transition support’.
  • Despite numerous international commitments to end them, and some limited progress on reform, all EU governments continue to provide high levels of subsidies to fossil fuels.
  • According to European Commission recommendations, governments are required to significantly improve their reporting on fossil fuel subsidies, including plans to phase them out, in their final NECPs (due at the end of 2019). This report shows that EU governments have an opportunity to use a common definition, existing data sources and methodologies, and the NECP process to help turn longstanding subsidy phase-out commitments into action.
Laurie van der Burg, Markus Trilling, Ipek Gencsu