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Fossil Fuel Subsidies 2021

Fossil Fuel Subsidies

Fossil Fuel Subsidies were €2.9 billion in 2021

Online ISSN: 2737-7334

CSO statistical publication, 20 September 2023, 11am

COVID-19 Release Information

This release contains data on fossil fuel subsidies in 2020 and 2021, during the COVID-19 pandemic. Consumption of fossil fuels used for transport was lower in 2020 and in 2021 due to the pandemic.

Editor's Note

This release includes figures for the Capacity Remuneration Mechanism, which is a payment to generators for being available to generate electricity when needed (see Table 2.3). The inclusion of this scheme resulted in an upwards revision of the figures reported for fossil fuel subsidies.

Fossil Fuel Subsidies

Fossil fuel subsidies were estimated at €2.9 billion in 2021 (see Figure 2.1 and Table 2.1). In 2000 - the first year of the series - total fossil fuel subsidies were estimated at €1.5 billion in value. This increased to €3.1 billion in 2008. Between 2009 and 2016 the value was estimated as between €2.7 billion and €2.9 billion. Total fossil fuel subsidies increased in value in 2017 and 2018, reaching the highest value of the series at €3.3 billion in current prices in 2018. In 2020 fossil fuel subsidies fell to €2.5 billion, with the reduction in transport fossil fuel consumption due to the COVID-19 pandemic accounting for the decrease. The 2021 figure was a 16% increase on 2020.

Year	Direct Subsidies	Indirect Subsidies	Total Fossil Fuel Subsidies
2000	0.079	1.4105	1.4895
2001	0.0812	1.4985	1.5797
2002	0.1008	1.5657	1.6665
2003	0.149	1.412	1.561
2004	0.1877	1.6291	1.8168
2005	0.2316	2.0909	2.3225
2006	0.225	2.2403	2.4653
2007	0.2001	2.3051	2.5052
2008	0.2248	2.8882	3.113
2009	0.3485	2.4647	2.8132
2010	0.3571	2.4546	2.8117
2011	0.3408	2.4147	2.7555
2012	0.3891	2.3879	2.777
2013	0.3907	2.3494	2.7401
2014	0.4606	2.4659	2.9265
2015	0.3945	2.5442	2.9387
2016	0.3559	2.5044	2.8603
2017	0.3578	2.6884	3.0462
2018	0.3096	3.006	3.3156
2019	0.2687	2.883	3.1517
2020	0.2906	2.1787	2.4693
2021	0.2848	2.5737	2.8585

Direct fossil fuel subsidies accounted for 10% of total fossil fuel subsidies in 2021 while indirect subsidies arising from tax expenditures, price supports and other government revenue forgone accounted for 90% (see Table 2.1). Figure 2.1 and Table 2.1 show the value of direct and indirect fossil fuel subsidies from 2000-2021. Tables 2.2 and 2.3 provide an inventory of individual direct and indirect subsidies from 2012-2021.

Table 2.1 Fossil Fuel Subsidies by Type, 2000-2021

Table 2.2 Direct Fossil Fuel Subsidies, 2012-2021

Table 2.3 Indirect Fossil Fuel Subsidies (Tax Expenditures, Price Supports and Other Government Revenue Forgone), 2012-2021

Table 2.3 Indirect Fossil Fuel Subsidies (Tax Expenditures, Price Supports and Other Government Revenue Forgone), 2012-2021										€m
Indirect Fossil Fuel Subsidies	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Total	2,387.9	2,349.4	2,465.9	2,544.2	2,504.4	2,688.4	3,006.0	2,883.0	2,178.7	2,573.7

Fossil Fuel Production
Zero royalties on gas and oil production	..	..	..	0.0	50.2	71.0	90.6	43.7	23.9	86.1

Road Transport Fuel Consumption
Tax differential: road diesel relative to transport benchmark	295.9	310.8	330.6	360.6	386.7	414.7	416.8	427.2	367.8	394.6
Road diesel VAT refund for businesses	208.7	229.0	218.9	198.7	192.9	192.3	208.3	199.0	147.3	159.1
Diesel rebate scheme for hauliers and passenger transport	–	1.1	26.4	9.7	0.6	1.3	3.5	10.3	8.2	10.3
Fuel excise repayment for disabled drivers/passengers	7.8	7.7	7.6	5.3	–	–	–	–	–	–
Tax differential: road LPG relative to transport benchmark	0.4	1.0	1.7	2.1	2.0	1.8	1.5	1.3	0.9	0.9

Other Transport Fuel Consumption & Fuels used in Industry
Jet kerosene excise exemption	332.7	383.5	425.0	480.9	493.4	580.3	626.6	633.9	233.6	272.5
Jet kerosene VAT exemption	101.6	108.0	111.7	89.6	73.1	105.4	140.9	139.4	31.5	52.5
Aviation gasoline excise repayment	..	..	..	..	..	..	0.1	0.1	0.2	0.2
Free ETS emission permits: aircraft operators	50.6	23.7	31.9	40.9	28.4	31.0	85.2	132.3	131.8	218.4
Fuel excise repayment for commercial sea navigation	9.5	9.9	11.4	10.8	12.3	11.6	13.1	13.3	16.6	20.9
Marine diesel scheme (VAT)	0.1	0.2	0.1	0.1	0.1	0.1	0.0	0.0	0.0	0.0
Capacity remuneration mechanism/Capacity payment mechanism	528.1	529.9	565.8	575.0	514.8	519.2	546.1	387.8	344.8	358.3
Free ETS emission permits: stationary installations	160.0	23.5	28.4	40.9	27.7	29.9	78.7	120.8	116.8	206.5
Fuel oil excise exemption for manufacture of alumina	6.7	6.7	3.0	0.2	0.0	0.0	0.0	0.0	0.0	0.0
Tax differential: fuel oil relative to heating and transport benchmarks	40.7	36.8	31.9	30.6	29.2	30.6	26.1	23.7	21.8	18.6
Carbon tax repayments	–	–	–	–	–	0.9	5.7	5.5	7.0	10.0
NORA levy exemptions	19.4	21.7	23.4	26.5	26.9	29.9	31.4	32.2	16.0	23.0
Tax differential: marked gas oil relative to heating and transport benchmarks	234.9	248.7	257.8	253.3	257.2	255.5	267.4	272.2	285.0	302.2
Fuel excise repayment for horticulture	0.1	0.1	0.1	0.1	0.0	0.1	0.1	0.1	0.1	0.1
Relief for increase in carbon tax on farm diesel	2.1	2.7	2.4	2.3	2.4	2.5	2.7	2.8	6.2	10.4

Fuels used for Heating
Tax differential: kerosene relative to heating benchmark	47.1	47.1	44.6	52.2	53.2	55.2	58.0	54.0	63.5	55.9
Tax differential: LPG relative to heating benchmark	32.5	39.8	47.0	47.6	56.2	61.7	64.7	68.6	65.0	26.6
Reduced VAT rate on energy products	296.8	305.6	284.7	305.2	285.5	282.2	327.4	304.2	285.4	341.0

Electricity Consumption
Electricity tax exemption for household use	6.5	6.3	5.9	5.9	5.8	5.6	5.5	5.2	5.3	5.6
Electricity tax reduction for business use	5.7	5.6	5.6	5.7	5.8	5.6	5.6	5.4	–	–
.. Not available
– Scheme not in operation or no payments made

Open in Excel: Fossil Fuel Subsidies 2021 Table 2.3 (XLS 13KB)

Year	Index of Fossil Fuel Subsidies 2015=100	WPI Energy Products 2015=100
2000	50.6856773403206	59.825
2001	53.7550617620036	59.7
2002	56.7087487664614	63.4083333333333
2003	53.1187259672644	67.3083333333333
2004	61.8232551808623	72.1833333333333
2005	79.03154456052	82.375
2006	83.8908360839827	89.3833333333333
2007	85.2485793037738	97.5
2008	105.931194065403	105.575
2009	95.7294041583013	98.4083333333333
2010	95.6783611801137	101.408333333333
2011	93.7659509306836	106.008333333333
2012	94.4975669513731	108.466666666667
2013	93.2419096879573	111.516666666667
2014	99.5848504440739	110.058333333333
2015	100	100
2016	97.332153673393	86.675
2017	103.658080103447	93.6083333333333
2018	112.825398985946	114.475
2019	107.248102902644	97.8916666666667
2020	84.0269506924831	78.0666666666667
2021	97.2709020995678	203.491666666667

The CSO Wholesale Price Index (WPI) for energy products is shown alongside total fossil fuel subsidies in current prices in Figure 2.2. The WPI for energy products provides a measure of changes in the wholesale price of imported and home-produced energy products, such as petrol, road diesel, fuel oil and electricity, sold by manufacturers and wholesale outlets. As fossil fuel subsidies are not shown in constant prices, the WPI for energy products provides an indication of price changes over the time series.

	Energy Taxes	Environmental Subsidies (Energy and Emissions)	Fossil Fuel Subsidies
2000	1.491	0.0005	1.4895
2001	1.436	0.0008	1.5797
2002	1.674	0.0034	1.6665
2003	1.763	0.0132	1.561
2004	2.084	0.0231	1.8168
2005	2.213	0.0219	2.3225
2006	2.247	0.0182	2.4653
2007	2.251	0.0513	2.5052
2008	2.25	0.0566	3.113
2009	2.267	0.0584	2.8132
2010	2.52	0.1837	2.8117
2011	2.692	0.1684	2.7555
2012	2.634	0.1219	2.777
2013	2.721	0.1281	2.7401
2014	2.84	0.1501	2.9265
2015	3.043	0.2156	2.9387
2016	3.135	0.2966	2.8603
2017	3.258	0.4116	3.0462
2018	3.176	0.558	3.3156
2019	3.015	0.3951	3.1517
2020	2.768	0.3973	2.4693
2021	3.203	0.6945	2.8585

Figure 2.3 shows a comparison of the amount raised in energy taxes with expenditure on fossil fuel subsidies and expenditure on environmental subsidies aimed at protecting the air and climate, and reducing fossil fuel use.

In 2021, €3.2 billion was raised in energy taxes, €0.7 billion was spent on environmental subsidies related to energy and air emissions, and fossil fuel subsidies were €2.9 billion.

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Fossil Fuel Subsidies 2021

Fossil Fuel Subsidies

Fossil Fuel Subsidies

Fossil Fuel Subsidies were €2.9 billion in 2021

COVID-19 Release Information

Editor's Note

Fossil Fuel Subsidies

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Table 2.2 Direct Fossil Fuel Subsidies, 2012-2021										€m
Direct Fossil Fuel Subsidies	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Total	389.1	390.7	460.6	394.5	355.9	357.8	309.6	268.7	290.6	284.8

Fossil Fuel Production
Petroleum exploration and production promotion and support scheme	1.3	0.5	1.6	2.0	2.4	2.1	1.2	1.4	2.1	0.9
Science Foundation Ireland fossil fuel R&D funding	–	–	–	0.3	0.9	1.3	1.3	0.8	0.2	0.0
Government fossil fuel R&D funding	–	–	–	–	–	–	–	–	–	–

Fossil Fuel Consumption
PSO levy: electricity generation from peat	94.2	94.8	119.0	121.9	115.4	117.8	65.5	25.5	31.4	7.7
PSO levy: security of supply	42.2	61.0	104.7	47.1	–	–	–	–	–	–
Electricity allowance	141.7	126.8	118.2	111.4	110.3	110.2	108.6	105.7	104.9	115.7
Gas allowance	20.6	16.3	21.8	18.8	19.2	20.6	19.3	21.2	20.9	22.1
Fuel allowance	84.6	91.3	87.1	85.7	92.4	90.5	96.1	96.0	116.2	126.3
Other supplements (including heating)	4.5	–	8.1	7.4	6.7	5.8	7.7	7.7	4.9	4.1
Smokeless coal allowance	–	–	–	–	–	–	–	–	–	–
Fuel grant for disabled drivers/passengers	–	–	–	–	8.6	9.5	10.0	10.5	10.0	8.1
– Scheme not in operation or no relevant payments made

Table 2.1 Fossil Fuel Subsidies by Type, 2000-2021			€m
Year	Direct Subsidies	Indirect Subsidies	Total Fossil Fuel Subsidies
2000	79	1,411	1,490
2001	81	1,499	1,580
2002	101	1,566	1,667
2003	149	1,412	1,561
2004	188	1,629	1,817
2005	232	2,091	2,323
2006	225	2,240	2,465
2007	200	2,305	2,505
2008	225	2,888	3,113
2009	349	2,465	2,813
2010	357	2,455	2,812
2011	341	2,415	2,756
2012	389	2,388	2,777
2013	391	2,349	2,740
2014	461	2,466	2,927
2015	395	2,544	2,939
2016	356	2,504	2,860
2017	358	2,688	3,046
2018	310	3,006	3,316
2019	269	2,883	3,152
2020	291	2,179	2,469
2021	285	2,574	2,859