No, Fossil Fuels Are Not Being “Subsidised”

The International Energy Agency defines fossil fuel subsidies as "Measures that reduce the effective price of fossil fuels below world market prices".

Interestingly, the Government said in 2021 the "U.K. does not give any subsidies to fossil fuels" and the U.K. does not appear on the IEA's Top-25 list from 2022 of countries that subsidise fossil fuels.

Figure 1 - IEA Top-25 Countries Subsidising Fossil Fuels Figure 1 - IEA Top-25 Countries Subsidising Fossil Fuels However, it should be noted that in the database buried in the IEA's website it does claim that the U.K. offered fossil fuel subsidies of around £6 billion in 2022, but none in any other year.

Where do the Claims of U.K. Fossil Fuel Subsidies Come From? Given the Government statement and the U.K. not appearing in the IEA's list of top subsidisers, we need to look at where these claims of massive subsidies come from.

The Guardian has produced similar articles over the years such as this one from 2019 claiming "The U.K. leads the European Union in giving subsidies to fossil fuels" and this one from 2023 claiming "The U.K. Government has given £20 billion more in support to fossil fuel producers than those of renewables since 2015".

A further £3.5 billion of the alleged support comes from fuel duty relief where some types of fuel pay less fuel duty for some uses than others.

Taxes on Fossil Fuels If we are to get a complete picture we should also consider the taxes the U.K. levies on fossil fuels.

These include direct taxes on fossil fuels that raised the following amounts in 2022: Fuel duty, £24.8 billion.

Plastic is made from fossil fuels, so this is effectively another tax on fossil fuels.

Figure 2 - UK Fossil Fuel Subsidies and Taxes 2022 Figure 2 - UK Fossil Fuel Subsidies and Taxes 2022 First, we can dismiss the so-called subsidies for producers as normal business expenses deducted from taxable profits.

Figure 3 - Expected UK Fossil Fuel Subsidies and Taxes 2024 Figure 3 - Expected UK Fossil Fuel Subsidies and Taxes 2024 However, we should note it is likely the fossil fuel tax take will fall with lower oil and gas prices. 

https://dailysceptic.org/2024/10/28/no-fossil-fuels-are-not-being-subsidised/