New Analysis Shows Governments Spent Five Times More Public Money on Fossil Fuels than Renewables, Putting Energy Security at Risk
As senior government officials arrive in Santa Marta, new analysis from the International Institute for Sustainable Development shows that governments’ public finance decisions remain out of step with a credible transition away from fossil fuels. It argues that any credible transition roadmap must begin by ending public financial support for fossil fuels and redirecting it toward cleaner, more resilient energy systems.
April 27, 2026—Today, one day before the high-level segment of discussions begins at the world’s first International Conference to Transition Away from Fossil Fuels in Santa Marta, IISD released a new analysis showing that public financial support for fossil fuels still far outweighs support for clean energy.
The analysis finds that in 2024, public financial support for fossil fuels exceeded USD 1.2 trillion, compared with USD 254 billion for clean energy—meaning fossil fuels still received around five times more public support than renewables. It also demonstrates a clear pattern: when oil prices spike, governments have repeatedly chosen to increase public spending on fossil fuels, with subsidies reaching USD 1.7 trillion in 2022.
“Governments need to stop making the same mistakes and expect different outcomes. When energy prices spike, the instinct is often to spend more public money on fossil fuels. But that approach is costly, hard to unwind, and leaves people exposed to the next crisis. The better option is to protect households in the short term while using public finance to scale up renewables and build more resilient energy systems over time.”
The analysis examines four major public finance flows: fossil fuel subsidies, G20 government support for renewable energy, state-owned enterprise capital expenditure, and international public finance. Together, they show both the scale of the imbalance and where governments can change course.
Four findings from the analysis:
- Fossil fuel subsidies remain the biggest pressure point—and are likely to rise again. Global fossil fuel subsidies reached USD 921 billion in 2024. One of the clearest findings is that subsidies remain closely tied to spikes in global fuel prices. With oil prices elevated again in 2026, governments risk falling back into the same pattern as 2022, when subsidies shot up to USD 1.7 trillion.
- G20 governments are financing renewable energy, but not yet at the pace needed. Government support for renewable energy in the G20 reached an estimated USD 169 billion in 2024. This is significant, but still far below fossil fuel support and not yet sufficient to match today’s energy security, affordability, and resilience challenges.
- State-owned enterprises (SOEs) remain out of step with the transition. In 2024, G20 energy SOEs spent close to USD 360 billion on energy capital expenditure, with 81% still going to fossil fuel infrastructure. This leaves public balance sheets exposed to potential stranded assets. At the same time, there are signs of change, with some SOEs—particularly in China, India, and France—increasing support for renewable energy and grid upgrades. Globally, state energy firms deliver on their security and affordability mandates by diversifying into renewables, storage, and electrification.
- International public finance is moving in the right direction, but it can go further. Fossil fuel finance from G20 governments and major multilateral development banks fell to USD 37 billion in 2024, while clean energy finance rose to USD 47 billion. This is an important shift, but more progress is needed to align international public finance with long-term energy security and climate goals.
The costs of staying on the current path are rising.
“Energy crises hit low- and middle- income households hardest, eroding purchasing power and forcing difficult trade-offs between essentials such as food, transport, and heating. Yet governments have repeatedly responded to price spikes with broader fossil fuel support, especially subsidies, that are costly, inefficient, and often poorly targeted. Over time, these measures deepen fiscal pressure, reinforce fossil fuel dependence, and leave households exposed to the next shock.”
IISD’s analysis argues that governments do not need to repeat the 2022 playbook. The analysis highlights several practical steps governments can take:
What governments should do now
- Replace blanket fossil fuel subsidies with targeted social protection, especially during crises. Prioritize cash transfers, cost-of-living support, and energy assistance for low-income households to protect purchasing power quickly and fairly.
- Use public finance to reduce exposure to future shocks. Scale up investment in renewables, grids, storage, electrification, and efficiency to lower bills, reduce volatility, and build more resilient energy systems.
- Give SOEs clear transition mandates so public investment aligns with national energy security and clean energy goals.
- Use Santa Marta and the lead up to the 31st United Nations Climate Change Conference (COP 31) to advance credible national roadmaps for transitioning away from fossil fuels, backed by concrete public finance commitments.
- Redirect international public finance faster toward clean energy and resilience, especially for countries most exposed to import dependence and price volatility.
The full analysis is published alongside IISD’s new Public Financial Support for Energy resource, which brings together data and explainers on how public money is shaping the global energy system.
Notes for editors
The Public Financial Support for Energy website brings together data, explainers, and deep-dive analysis on how public financial flows are shaping the global energy system. The analysis combines major international data sources and original IISD research on fossil fuel subsidies, renewable energy support, state-owned enterprise spending, and international public finance to provide a consolidated picture of public support for energy. Together, they are intended to support governments and civil society experts working to align public finance with energy security, affordability, and climate goals.
Access the website here, and the explainers here:
- Fossil Fuel Subsidies
- G20 Support for Renewable Energy
- State-Owned Enterprises Capital Expenditure
- International Public Finance
- Access deep-dive analysis here.
Media Contact
Mark Raven, Senior Communications Officer at IISD: [email protected], +44 7841 474125
About IISD
The International Institute for Sustainable Development (IISD) is a globally recognized think tank with 3 decades of experience working to solve the world’s most pressing sustainable development challenges. We combine deep expertise in a wide range of issues with a collaborative approach to research, policy advice, and hands-on support to ensure these solutions are brought to life. Headquartered in Winnipeg, Manitoba, we are a diverse team of over 300 professionals working from offices in Canada, Switzerland, and other locations around the world.
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