Fossil fuel subsidies were €4.9 billion in 2023, up from €4.7 billion in current prices in 2022 and €2.8 billion in current prices in 2021. Relative to modified gross national income (GNI*), fossil fuel subsidies went from 1.2% of GNI* in 2021 to 1.8% in 2022 and 1.7% in 2023 (see Figure 2.1 and Table 2.1).
In 2022 and 2023, a number of temporary measures were implemented in response to rises in energy prices. The temporary measures included direct subsidies to households and businesses to reduce energy costs, as well as tax rate reductions on fossil fuels such as petrol and diesel. The total amount in fossil fuel subsidies resulting from these measures was estimated at €1.1 billion in 2022 and €1.6 billion in 2023 (see Table 2.2).
In 2000 (the first year of the series) total fossil fuel subsidies were estimated at €1.5 billion in value, or 1.6% of GNI* (see Figure 2.1 and Table 2.1).
In current prices, fossil fuel subsidies were €3.1 billion in 2008 and €3.3 billion in 2018 before falling to €2.4 billion in 2020. They were €2.8 billion in current prices in 2021, with the relatively lower values in 2020 and 2021 being mainly due to the reduction in transport fossil fuel consumption during the COVID-19 pandemic.
The trend in fossil fuel subsidies relative to GNI* is shown in Figure 2.1. As a percentage of GNI*, fossil fuel subsidies were highest in 2010 at 2.2% and lowest in 2020 and 2021 at 1.2%, before increasing to 1.8% in 2022 and 1.7% in 2023.
| Year | Direct Subsidies | Indirect Subsidies | % of GNI* |
|---|---|---|---|
| 2000 | 0.079 | 1.412 | 1.582 |
| 2001 | 0.081 | 1.5 | 1.527 |
| 2002 | 0.101 | 1.568 | 1.479 |
| 2003 | 0.149 | 1.414 | 1.263 |
| 2004 | 0.188 | 1.631 | 1.372 |
| 2005 | 0.232 | 2.092 | 1.612 |
| 2006 | 0.225 | 2.24 | 1.562 |
| 2007 | 0.2 | 2.303 | 1.513 |
| 2008 | 0.225 | 2.884 | 1.988 |
| 2009 | 0.349 | 2.456 | 2.088 |
| 2010 | 0.357 | 2.446 | 2.17 |
| 2011 | 0.341 | 2.4 | 2.12 |
| 2012 | 0.389 | 2.362 | 2.141 |
| 2013 | 0.391 | 2.321 | 1.96 |
| 2014 | 0.461 | 2.43 | 1.916 |
| 2015 | 0.395 | 2.502 | 1.721 |
| 2016 | 0.356 | 2.461 | 1.623 |
| 2017 | 0.358 | 2.657 | 1.631 |
| 2018 | 0.31 | 2.96 | 1.704 |
| 2019 | 0.269 | 2.836 | 1.501 |
| 2020 | 0.291 | 2.133 | 1.222 |
| 2021 | 0.282 | 2.558 | 1.23 |
| 2022 | 1.052 | 3.668 | 1.768 |
| 2023 | 1.153 | 3.771 | 1.693 |
Direct fossil fuel subsidies are direct payments to beneficiaries such as household and businesses to reduce costs associated with fossil fuel activities. They accounted for 23% of total fossil fuel subsidies in 2023.
Examples of indirect subsidies include tax exemptions and tax repayments on fuels used for certain purposes. Indirect subsidies accounted for 77% of fossil fuel subsidies in 2023. Figure 2.1 and Table 2.1 show the value of direct and indirect fossil fuel subsidies from 2000-2023. Tables 2.3 and 2.4 provide an inventory of individual direct and indirect subsidies from 2014-2023.
Figure 2.2 shows a comparison in current prices of energy taxes, fossil fuel subsidies, and environmental subsidies aimed at reducing fossil fuel use and protecting the air and climate, for the ten-year period from 2013 to 2022, the most recent year for which data are available for all three measures.
In 2022, €2.6 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 €4.7 billion.
Figure 2.3 shows a comparison of the same three indicators relative to GNI*, from 2013 to 2022.
Environment taxes relative to GNI* fell 0.4 percentage points in 2022; environmental subsidies related to energy and air emissions remained the same relative to GNI* as in 2021; while fossil fuel subsidies relative to GNI* increased by 0.6 percentage points in 2022.
| Energy Taxes | Fossil Fuel Subsidies | Environmental Subsidies (Energy & Emissions) | |
| 2013 | 2.721 | 2.711 | 0.128 |
| 2014 | 2.84 | 2.891 | 0.15 |
| 2015 | 3.043 | 2.896 | 0.216 |
| 2016 | 3.135 | 2.816 | 0.297 |
| 2017 | 3.258 | 3.015 | 0.412 |
| 2018 | 3.176 | 3.27 | 0.558 |
| 2019 | 3.04 | 3.105 | 0.395 |
| 2020 | 2.786 | 2.424 | 0.401 |
| 2021 | 3.232 | 2.84 | 0.697 |
| 2022 | 2.648 | 4.72 | 0.696 |
| Energy Taxes % of GNI* | Fossil Fuel Subsidies % of GNI* | Environmental Subsidies (Energy & Emissions) % of GNI* | |
| 2013 | 1.967675453 | 1.960444011 | 0.092562462 |
| 2014 | 1.881829085 | 1.915622494 | 0.099392381 |
| 2015 | 1.808747132 | 1.721370915 | 0.128389543 |
| 2016 | 1.806479123 | 1.622661949 | 0.171140127 |
| 2017 | 1.762557819 | 1.631096324 | 0.222889448 |
| 2018 | 1.655304689 | 1.704296704 | 0.290824942 |
| 2019 | 1.469806121 | 1.501232897 | 0.190978098 |
| 2020 | 1.404297574 | 1.221829619 | 0.202126105 |
| 2021 | 1.400298083 | 1.230459949 | 0.3019826 |
| 2022 | 0.991838309 | 1.767929313 | 0.260694661 |
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Editor's Note
In this release the term fossil fuel subsidies refers to the fiscal cost of support to fossil fuel production and consumption, through direct payments as well as through revenue forgone from the tax system.