Making It Happen
How the G20 can end fossil fuel subsidies in practice
This report explains how G20 members can finally deliver on their pledge to phase out inefficient fossil fuel subsidies. It proposes a three-tier categorization of subsidies—quick phase-out, phase-out with a robust strategy, and time-limited exemptions—and applies it to five G20 countries to show how national phase-out plans can work in practice.
Key Messages
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G20 governments should adopt national fossil fuel subsidy phase-out plans to move from high-level pledges to transparent, time-bound reform.
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Analyzing fossil fuel subsidies from Brazil, Germany, Italy, Mexico, and South Africa shows that many subsidies can be removed quickly, while most fiscal value lies in measures requiring well-planned, medium-term reforms.
As G20 countries seek productive investment in infrastructure, energy, education, health, and climate resilience both individually and as a group, one immediate opportunity remains underutilized yet actionable—fossil fuel subsidy reform.
In 2023, G20 countries spent USD 794 billion on fossil fuel subsidies. These subsidies undermine climate goals, strain public budgets, distort markets, and weaken energy security by locking countries into volatile fossil fuel supply chains.
While emergency measures during the energy crisis explain the fossil fuel subsidy spike in recent years, the failure to implement the G20's commitment "to phase out inefficient fossil fuel subsidies," dating back to 2009, underscores that the G20 has fallen short of finding a constructive way to fossil fuel subsidy reform beyond blanket statements.
This is exactly what the policy report acts on: our proposed framework categorizes fossil fuel subsidies in three tiers—quick phase-out, phase-out with a robust strategy, and time-limited exemptions—and offers a practical roadmap to deliver national reforms.
Analyzing fossil fuel subsidies from Brazil, Germany, Italy, Mexico, and South Africa shows that many subsidies can be removed quickly, while most fiscal value lies in measures requiring well-planned, medium-term reforms.
G20 economies can pursue these efforts individually and do not need to wait for every member to move at the same pace. Three G20 countries—Canada, France, and the United Kingdom—have already joined the Coalition on Phasing Out Fossil Fuel Incentives including Subsidies (COFFIS) to continue combining collective and national efforts and make reforming fossil fuel subsidies both actionable and achievable.
Participating experts
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