Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

UK is only G7 country to dramatically increase fossil fuel subsidies

Britain is alone among G7 nations in dramatically increasing its fossil fuel subsidies, despite an earlier pledge to phase them out, the Guardian has reported.

The revelation, revealed in a report released by the Overseas Development Institute (ODI) and Oil Change International, will embarrass ministers who want to take a leading role at the crunch UN climate change summit in Paris in December but who have been sharply cutting support for green energy at home.

The report found that as a whole, G20 nations are responsible for £297bn a year in subsidies for fossil fuel production.

The G20, which meets on Sunday in Turkey, pledged in 2009 to phase out subsidies for fossil fuels.

In the UK, production subsidies of £5.9bn have already benefited major fossil fuel companies operating in the country, mostly foreign-owned, while £3.7bn is used to subsidise fossil fuel production overseas in countries including Russia, Saudi Arabia and China, the new analysis found.

New tax breaks for North Sea oil and gas production announced by Chancellor George Osborne earlier this year will cost taxpayers a further £1.7bn by 2020, according to government figures.

The Empty Promises report states: “The UK stands out as a member of the G20 that, despite its pledge to phase out fossil fuel subsidies, has dramatically increased its support to the production of fossil fuels in recent years.”

Earlier tax breaks for North Sea exploration between 2009 and 2014 were worth £551m to French company Total, £131m to US-based Apache and £267m to Norway’s state-owned Statoil, the ODI said.

The International Energy Agency (IEA) revealed on Tuesday a further $490bn a year in subsidies for fossil fuel consumption, mainly cheap fuel. Subsidies for renewable energy are far smaller, with the IEA estimating them at $135bn a year.

Last December, it was revealed that Mr Osborne had sparked the biggest boom in UK fossil fuel investment since the North Sea industry was founded in the 1970s, with taxpayers funding seismic exploration for companies, while investment in clean energy had plummeted.

On Monday (9 December), ministers were forced by the leak of a letter to admit the UK is set to miss a key renewable energy target, while on Wednesday the country lost its top-ranked energy rating.

A spokesman for the Department of Energy & Climate Change said: “We are committed to meeting our decarbonisation targets – we’ve made record investments in renewables and are focusing on lower-carbon secure energy sources, such as nuclear and shale gas. However, this will not happen overnight – oil and gas will continue to play a role so we can ensure hardworking families and businesses have access to secure, affordable energy.”

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.