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Fossil fuel subsidies were €4.67 billion in 2024, down from €4.98 billion in current prices in 2023. Relative to modified gross national income (GNI*), fossil fuel subsidies went from 1.7% of GNI* in 2023 to 1.5% in 2024 (see Figure 2.1 and Table 2.1).
In 2015 total fossil fuel subsidies were estimated at €2.91 billion in value in current prices, or 1.7% of GNI* (see Figure 2.1 and Table 2.1). By 2019, fossil fuel subsidies increased to €3.12 billion before falling 22% to €2.44 billion in 2020. The value remained at a similar level in 2021, €2.86 billion in current prices, 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.
In 2022, a number of temporary measures were introduced 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 €1.10 billion in 2022 and €1.73 billion in 2023. Some of these measures were no longer in operation in 2024 while others were notably reduced, and the value reduced to €0.94 billion (see Table 2.2).
| Year | Direct Subsidies | Indirect Subsidies | % of GNI* |
|---|---|---|---|
| 2015 | 0.3946 | 2.5152 | 1.73238002821815 |
| 2016 | 0.3559 | 2.471 | 1.63156710086628 |
| 2017 | 0.3578 | 2.6796 | 1.64493632504548 |
| 2018 | 0.3097 | 2.9867 | 1.721 |
| 2019 | 0.2688 | 2.8473 | 1.50825766229743 |
| 2020 | 0.2906 | 2.145 | 1.228 |
| 2021 | 0.2825 | 2.5745 | 1.24121332186395 |
| 2022 | 1.0522 | 3.6919 | 1.77889771338148 |
| 2023 | 1.1507 | 3.827 | 1.70779746626954 |
| 2024 | 0.8908 | 3.7789 | 1.45407321129375 |
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 19% of total fossil fuel subsidies in 2024. Direct fossil fuel subsidies increased substantially in 2022 (272% on 2021), mainly due to temporary energy support measures. After remaining at a similar level in 2023, the cost of these direct payments then decreased by 23% in 2024.
Examples of indirect subsidies include tax exemptions and tax repayments on fuels used for certain purposes. Indirect subsidies accounted for 81% of fossil fuel subsidies in 2024.
Figure 2.1 and Table 2.1 show the overall value of direct and indirect fossil fuel subsidies from 2015-2024. Tables 2.3 and 2.4 provide an inventory of individual direct and indirect subsidies from 2015-2024.
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 2014 to 2023, the most recent year for which data are available for all three measures.
In 2023, €3.18 billion was raised in energy taxes, €0.60 billion was spent on environmental subsidies related to energy and air emissions, and fossil fuel subsidies were €4.98 billion.
Figure 2.3 shows a comparison of the same three indicators relative to GNI*, from 2014 to 2023.
Energy taxes relative to GNI* rose 0.10 percentage points in 2023, while environmental subsidies related to energy and air emissions relative to GNI* fell by 0.05 percentage points. Fossil fuel subsidies relative to GNI* fell by 0.07 percentage points in 2023.
The value of fossil fuel subsidies remains substantial. In contrast, environmental subsidies remain small and are stable relative to the size of the economy, and in recent years, the value of energy taxes have declined relative to the size of the economy.
| Energy Taxes | Fossil Fuel Subsidies | Environmental Subsidies (Energy & Emissions) | |
| 2014 | 2.84 | 2.891 | 0.15016 |
| 2015 | 3.043 | 2.91 | 0.21561 |
| 2016 | 3.135 | 2.827 | 0.296687 |
| 2017 | 3.258 | 3.038 | 0.411669 |
| 2018 | 3.176 | 3.296 | 0.558027 |
| 2019 | 3.04 | 3.116 | 0.39512 |
| 2020 | 2.786 | 2.436 | 0.401251 |
| 2021 | 3.232 | 2.857 | 0.697045 |
| 2022 | 2.648 | 4.744 | 0.705699 |
| 2023 | 3.176 | 4.977 | 0.599941 |
| Energy Taxes % of GNI* | Fossil Fuel Subsidies % of GNI* | Environmental Subsidies (Energy & Emissions) % of GNI* | |
| 2014 | 1.88461385323901 | 1.91845727102605 | 0.0996456395078769 |
| 2015 | 1.81155753466248 | 1.73238002821815 | 0.128356858379421 |
| 2016 | 1.80932538422915 | 1.63156710086628 | 0.17122912927298 |
| 2017 | 1.76405613791909 | 1.64493632504548 | 0.22289970111756 |
| 2018 | 1.65769790856564 | 1.72033133080364 | 0.291259505926688 |
| 2019 | 1.47147089004627 | 1.50825766229743 | 0.191252492787856 |
| 2020 | 1.40506246122966 | 1.22854707665307 | 0.202362784504975 |
| 2021 | 1.40413071622831 | 1.24121332186395 | 0.30282868041255 |
| 2022 | 0.992942905782918 | 1.77889771338148 | 0.264621909240219 |
| 2023 | 1.08980605844325 | 1.70779746626954 | 0.205862511495121 |
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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 foregone from the tax system.