OECD and IEA data show 2020 fossil fuel support across major economies falling to USD 351 billion as wholesale energy prices tumbled in the aftermath of the COVID-19-induced economic shock, 45% off its peak two years earlier.
However, the reopening of economies has seen energy prices soaring. While complete data are not yet available, fossil fuel subsidies and other types of support measures are expected to surge in 2021. Government support for fossil fuels encourages their continued production and consumption and so is a challenge for governments’ net-zero pledges, while crowding out investment in sustainable energy infrastructure and other public services.
How can governments accelerate the transition to clean energy – and better target support for low-income households?
See also: Fossil Fuel Subsidy Tracker