And the UK is one of the worst offenders, becoming the only G7 nation to increase fossil fuel subsidies. (Scroll down for interactive map).  

That’s according to a new study from the Overseas Development Institute (ODI) and Oil Change International, which investigates the scale and structure of fossil fuel production subsidies in the Group of Twenty major economies.

“The evidence points to a publicly financed bailout for some of the world’s largest, most carbon-intensive and polluting companies,” the report states. “The G20 countries are creating a ‘lose-lose’ scenario.

“They are pouring large amounts of finance into uneconomic, high-carbon assets that cannot be exploited without driving the planet far beyond the internationally agreed target of limiting global temperature increases to no more than 2ºC.

“At the same time, they are diverting investment from economic low-carbon alternatives such as solar, wind and hydro-power.”

The G20, which meets on Sunday (16 November) in Turkey, pledged in  phase out fossil fuel subsidies back in 2009.


The UK is highlighted as a ‘laggard’ in this area, due to its stated goal of extracting an additional three to four billion barrels of oil and gas in the next 20 years.

Chancellor George Osborne also introduced a new set of tax breaks for oil companies in 2015 that will reportedly cost UK taxpayers $2.7bn between 2015 and 2020. 

The report adds: “The UK stands out as a major industrialised economy that, despite the G20 pledge, has dramatically increased its support to fossil fuels in recent years.

“While other nations have responded to the drop in energy prices by reducing fossil fuel consumer subsidies, the UK has reduced taxes on fossil fuel production, increasing subsidies to fossil fuel producers.”

The report claims that, in total, the UK provides $9bn in national subsidies and $5.5bn in public finance to fossil fuel projects.


Germany is highlighted as a leader in the report for its commitment to ending coal subsidies by 2018. France and the US have also taken steps to limit funding of coal projects.

The ODI report is the latest controversy surrounding the UK energy system after a leaked letter from Energy Secretary Amber Rudd earlier this week raised concerns that the UK will miss its 2020 renewable energy targets.

The UK was also downgraded from the top tier of the World Energy Trilemma Index this week, over concerns about the future security of its energy supply and rising energy bills.

Interactive map: leader or laggard?

Brad Allen 

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