Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels 2013

Attributed Authors:
  • Jehan Sauvage, Jagoda Sumicka Egelan, Caroline Gomes Nogueira, Ronald Steenblik
 Published: Jan 2013

The Inventory Of Estimated Budgetary Support and Tax Expenditure for Fossil Fuels 2013 collects details on more than 550 fossil fuel support measures in the 34 OECD member countries, including many provided by state and provincial governments. The report also highlights progress made and the benefits identified by a number of OECD countries in reforming support to fossil fuels in recent years. It updates an earlier report released in 2011.

Note:  Earth Track provided background data on US fossil fuel subsidies for this OECD report.

Governments support fossil-fuel production through market intervention, direct transfers of funds, undercharging of government-supplied goods or assets and tax concessions. Consumption of fossil fuels is supported by mechanisms including price controls, rebate schemes and tax relief. As tax treatment varies considerably across countries, the value of this support, which includes tax expenditures, is not internationally comparable.

Petroleum products benefitted from around two-thirds of the value of all support measures identified in the Inventory, with the remainder equally split between coal and natural gas.

OECD analysis identifies common strategies among governments that have successfully reduced fossil-fuel and electricity subsidies:

  • Increase the availability and transparency of data on support.
  • Provide better-targeted and transparent compensatory measures for economic restructuring or poverty alleviation to smooth the path for fossil-fuel subsidy reform.
  • Integrate reforms to fossil-fuel subsidies in a package that includes broader structural reforms, where possible.
  • Ensure public trust in the reform agenda through broad communication strategies, appropriate timing of subsidy removal, and implementation of compensatory social policies.

Data underlying the Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels 2013, as well as more work by OECD and the International Energy Agency (IEA) on fossil-fuel subsidies and support, can be found at www.oecd.org/iea-oecd-ffss.

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