Brussels warns of fossil fuel subsidies

30/01/2019 12:00 - 170 total view

The European Commission has warned that the total subsidies for coal, oil and gas across the EU remain at 2008 levels, despite both Brussels and the G20 pledging to phase out the subsidies to ease the transition to renewable energy. 

Germany provided the largest energy subsidies, with €27 billion for renewable energy, which was almost triple the €9.5 billion given to fossil fuels. Spain and Italy also provided more subsidies to renewable sources than fossil fuels.

Fossil fuels provided EU member states and Norway with more than €400 billion in gas and oil taxation in 2017, according to the International Association of Oil and Gas Producers.

The commission reported that the UK spent the most – €12 billion a year – supporting fossil fuels in the UK, significantly more than the €8.3 billion spent on renewable energy.

Some anti-EU observers and the UK government disagree with the report’s definition of “subsidy”, which is based on London’s 5-per-cent VAT rate on domestic gas and electricity bills. UK VAT is 20 per cent on all other purchases.
France, the Netherlands, Sweden and Ireland all gave more to fossil fuels than renewables, according to the report based on 2016 Eurostat information, the latest data available. Across the bloc, renewables received 45 per cent of subsidies and fossil fuels 33 per cent.

The commission report said: “Despite this and the international commitments made in the context of G20 and G7, fossil fuel subsidies in the EU have not decreased. EU and national policies might need to be reinforced to phase out such subsidies.”

Combined fossil fuel subsidies in the EU were €55 billion in 2016, Brussels reported.

The European Investment Bank is still signing off on fossil fuel projects, including coal and has already disbursed almost €12 billion in fossil fuel projects.

The UK fossil fuel subsidies identified by the commission is the 5-per-cent rate of VAT on domestic gas and electricity, cut from the standard 20 per cent. London did not dispute the data but denied that it providing subsidies.

“We do not subsidise fossil fuels,” a UK government spokeswoman told the Guardian. “We’re firmly committed to tackling climate change by using renewables, storage, interconnectors, new nuclear and more to deliver a secure and dynamic energy market at the least possible cost for consumers.”

Shelagh Whitley of the Overseas Development Institute dismissed this interpretation, saying: “They are lying. It’s absurd. They are playing games and continuing to prop up a centuries-old energy system.”
January 30, 2019
Source: Energy Reporters