Fossil Fuel Subsidies in EU Member States – Trends and Analytical Challenges

This paper provides a detailed picture of recent trends and discusses the methodological challenges in analysing fossil fuel subsidies.

Highlights

• The EU agreed to phase out fossil fuel subsidies. Nevertheless, they strongly increased in 2022 and to a lesser extent 2023 to address the effects of the energy crisis.
• The fossil fuel subsidies in EU Member States related to the energy crisis are likely to be underestimated.
• The strong rise in directly targeted FFS amounts in particular to support households, is likely to be temporary.
• The majority of fossil fuel subsidies in the EU are tax-related measures, though in the responses to the energy crisis price-related transfers have been dominant.
• There are different and partly complementary approaches to define and measure fossil fuel subsidies which all have specific challenges.

Information and identifiers

Discussion Paper 214. December 2024. Brussels. PDF. 26pp. Tab. Graph. Bibliogr. Free.

KC-BD-23-031-EN-N (online) 
ISBN 978-92-68-01832-3 (online) 
ISSN 2443-8022 (online)
doi:10.2765/28177 (online)

JEL classification: C8, H2, H5, Q3, Q4.

Disclaimer

European Economy Discussion Papers are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs, or by experts working in association with them, to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.