OECD Inventory of Support Measures for Fossil Fuels 2025

The fiscal cost of government support for fossil fuels fell by around one tenth in 2024 to USD 0.92 trillion, reflecting that governments reduced the fiscal cost of their emergency support measures and that energy supply costs fell from their peak in 2022. Yet, with many measures still in place, this fiscal cost remains elevated relative to its historical average. Moreover, direct budgetary transfers for fossil fuels and low fossil fuel excise rates weakened the economic incentives to decarbonise as reflected in the evolution of Net Effective Carbon Rates (Net ECR). The high fiscal cost of government support for fossil fuels and low Net ECR highlight the challenges of ensuring the effective and efficient use of public resources to support well-functioning energy markets and meet public policy goals, including net-zero commitments. Going forward, reforms should focus on better targeting those most in need and phasing out inefficient support for fossil fuels as soon as possible to free-up much-needed public resources.