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Global Fossil Fuel Subsidies Hit Record High in 2023, Undermining Climate Action

A new report by the Organisation for Economic Co-operation and Development (OECD) and the International Institute for Sustainable Development (IISD) reveals that global government support for fossil fuels reached a staggering USD 1.5 trillion in 2023. This figure includes subsidies for both consumption and production, hindering the transition to cleaner energy sources and undermining global climate goals.

The report highlights that USD 1 trillion of these subsidies went towards supporting the consumption of coal, oil, and gas. Furthermore, around USD 447 billion directly incentivized new fossil fuel production through subsidies, investments from state-owned enterprises, and international public finance.

The top ten subsidizers of fossil fuels in 2023 included a mix of developed and emerging economies, with Russia, Germany, Iran, China, and Japan among the leading contributors.

The report also criticizes the G7 nations, which have committed to phasing out "inefficient" fossil fuel subsidies by 2025. Despite this commitment, fossil fuel subsidies within the G7 nearly tripled between 2020 and 2023, reaching USD 282 billion.

A particularly concerning finding reveals that developed countries, responsible for providing climate finance to developing nations under the UN climate convention, spent USD 378 billion subsidizing fossil fuels in 2023. This surpasses the USD 300 billion they have collectively committed to mobilizing as climate finance annually by 2035.

The report underscores the urgent need for governments to phase out all harmful fossil fuel subsidies and redirect these funds towards investments in renewable energy sources. Continued support for fossil fuels not only exacerbates climate change but also hinders the development of a sustainable and equitable energy future.