The Fossil Fuel Subsidy Tracker incorporates estimates of fossil-fuel subsidies and other support measures for 192 economies and is updated once a year as latest data from source organizations become available. The estimates are provided from three international databases: the OECD Inventory of Support Measures for Fossil Fuels, the IEA Energy subsidies database and the IMF Fossil Fuel Subsidies database. Estimates from the three organisations are based on two different approaches, which provide complementary information.
The IEA and IMF analyses of energy subsidies compares the end-use prices paid by fuel consumers, with reference prices (such as import-parity prices). The Fossil Fuel Subsidy Tracker picks up IMF “pre-tax” (see note below) for consumption subsidy estimates only (i.e. price gap). The IMF also includes production subsidies for selected countries as well as “post-tax” (see note below) subsidies to fossil fuels. The “post-tax” subsidies consider the undercharging for environmental costs and general consumption taxes and are therefore higher than the ”pre-tax” subsidy estimates. IMF production and ”post-tax” estimates have not been reflected in the Fossil Fuel Subsidy Tracker, as external costs are not commonly reflected in tax expenditure data. (Note: beginning 2021, the IMF started using the terminology “explicit” subsidies to refer to “pre-tax” subsidies and “implicit” subsidies to refer to “post-tax” subsidies.)
The OECD Inventory essentially covers direct budgetary transfers and tax expenditures that in some way provide a benefit or preference for fossil-fuel production or consumption relative to alternatives. It also covers measures that create enabling conditions for the fossil-fuel sector through the development of private or public services, institutions and infrastructure that may benefit fossil-fuel production or consumption in the long term, and fund activities to address the legacy of past mining or drilling (“general services support”).
The scope of the OECD Inventory is therefore broader than conventional conceptions of “subsidy”. Although the OECD Inventory covers measures that provide support (either absolute or relative) to fossil fuels, it does not attempt to assess the impact on prices or quantities of the measures considered, nor does it pass any judgment as to whether a given measure is justified or not. In that sense, the OECD Inventory casts a wide net that aligns well with its objective of promoting the transparency of public policies. Hence, information precedes analysis.
The estimates presented in the Fossil Fuel Subsidy Tracker may be under-estimates, as several subsidies and broader support measures documented in the OECD Inventory may have values not available, may only have partial data coverage or the complete set of fossil fuel support measures of covered countries may not have been exhaustively identified. Therefore, blank cells should be considered as values that have not been estimated.
Fossil fuels are defined in accordance with the IEA Statistical Manual (2004). Fossil-fuel subsidies are defined based on the Agreement on Subsidies and Countervailing Measures (ASCM) under the World Trade Organization (WTO) (1994). A subsidy shall be deemed to exist:
The subsidy mechanisms based on this definition include
(i) Direct transfer of government funds;
(ii) Tax expenditure, other revenue foregone, and under-pricing of goods and services;
(iii) Induced transfers (price support); and
(iv) Transfer of risk to government.
The methodology for reporting SDG 12.c.1 on fossil-fuel subsidies: “Measuring Fossil Fuel Subsidies in the Context of the Sustainable Development Goals” has been developed by UN Environment with the OECD and the IISD.
The methodology adopts the OECD Inventory approach for direct budgetary transfers and tax expenditures, and the IEA and IMF approach for induced transfers.
Due to the complexity and the limited availability of data for the fourth subsidy mechanism, transfer of risk, the methodology recommends excluding this category in the initial stages of the SDG reporting process. As such, no data under this category is included in the Fossil Fuel Subsidy Tracker.
Recognising that reporting and monitoring capacity as well as data availability differ across countries, the methodology recommends a phased approach to move from existing OECD, IEA and IMF global datasets to a process that incorporates national figures as they become available, hence the utility of bringing the three datasets together in one site.
The fossil-fuel subsidies and other support measures in the Fossil Fuel Subsidy Tracker are categorised by Fuel type, Beneficiaries, and Support mechanism.
Fuels covered by Fossil Fuel Subsidy Tracker comprise both primary fossil-fuel commodities (e.g. crude oil, natural gas, coal, and peat) and secondary refined or processed products (e.g. diesel fuel, gasoline, kerosene, and coal briquettes), following the IEA’s Statistical Manual. Primary fuels include those fossil fuels that are extracted from unconventional sources, such as oil extracted from bituminous sands, shale-based natural gas, or coal-bed methane. Measures supporting the production or use of biofuels are not included.
Higher reported tax expenditures for some countries may therefore reflect higher levels of taxation or greater transparency in reporting rather than a higher level of support.
The difference between the end-use price and the reference price (that which would prevail in a competitive market, reflecting the full cost of supply) amounts to the price gap or induced transfer. For countries that import a given product, consumer subsidy estimates derived through the measurement of price gaps are explicit. That is, they represent net expenditures resulting from the domestic sale of imported energy at lower, regulated prices. In contrast, for countries that export a given product – and therefore do not pay world prices – subsidy estimates are implicit and have no direct budgetary impact. Rather, they represent the opportunity cost of pricing domestic energy below market levels. For countries that produce a portion of their fossil-fuel consumption themselves and import the remainder, the estimates represent a combination of opportunity costs and direct government expenditures.
The Fossil Fuel Subsidy Tracker uses data from three sources: the Organisation for Economic Co-operation and Development (OECD), the International Energy Agency (IEA) and the International Monetary Fund (IMF). The sub-sections above in this “Methodology” section provide detailed information on the different but complementary approaches used by these organisations to estimate support for fossil fuels.
The OECD Inventory of Support Measures for Fossil Fuels documents over 1 400 national and sub-national government budgetary transfers and tax expenditures providing preferential benefit to the production and consumption of fossil fuels in 50 OECD, G20 and European Union (EU) Eastern Partnership (EaP) countries. As mentioned above, the Inventory does not attempt to assess the impact on prices or quantities of the fossil-fuel support measures considered, nor does it pass any judgment as to whether a given measure is justified or not.
The IEA provides “price-gap” estimates for 42 economies. In countries where OECD and IEA country coverage overlap (e.g. Argentina, Azerbaijan, People’s Republic of China, Colombia, Indonesia, India, Korea, Mexico, Russia Federation, South Africa and Ukraine), the OECD and the IEA have produced a joint estimate. The global map presented in the “Home” page includes this joint OECD-IEA estimate. However, the individual “Country Data” section of the website presents only OECD-sourced data. For countries not covered by either the OECD or the IEA, data is complemented with IMF estimates.
In the joint OECD-IEA estimates, a rule-of-thumb approach is used to combine the IEA estimates of consumer price support with OECD Inventory estimates for these overlapping countries. Since the IEA quantifies the price transfers resulting from underpricing fossil fuels or from selling products at prices lower than international prices, individual support measures in the OECD Inventory are sorted according to whether they lower the domestic price and then used to estimate an equivalent price transfer estimate. The rule of thumb then instructs to choose the estimates for which the total of the last six-year period of available data is the larger of the two. This rule of thumb addresses the potential discrepancies between the two estimates that can stem from budgetary reporting rules, measurement errors, or time lags in the price pass-through, but means that the joint OECD-IEA estimates for overlapping countries cannot be broken down to the level of granularity displayed in the “Country Data” section of the website (OECD, 2018). This is why only OECD-sourced data is displayed for those countries in the individual “Country Data” section of the website. Global aggregates derived from the individual “Country Data” section may therefore differ from total aggregated estimate published on the home page. Given this limitation, users should use data from the “Home” page to obtain an estimate at the global level, and data from the ”Country Data” page to obtain estimates for individual countries.
Taken together, both the OECD and IEA estimates cover 81 economies. The remaining countries not covered by the OECD and IEA estimates are obtained from the IMF, which is used by the Fossil Fuel Subsidy Tracker as source for 111 countries out of the 192 countries covered in the IMF’s fossil fuel subsidy database.
Gross Domestic Product data series for OECD and G20 economies are sourced from the OECD National Accounts Statistics database, complemented and expanded with the OECD Economic Outlook, World Bank World Development Indicators, IEA World Indicators and the IMF World Economic Outlook database. Data series are available in the OECD Green Growth Indicators database. The share of FFS per unit of GDP is calculated as the ratio of total subsidies over GDP, both expressed in nominal USD.
National population data are sourced from the UN World population prospects database complemented and expanded with the World Bank World Development Indicators. Data series are available in the OECD Green Growth Indicators database. Per capita figures are expressed in nominal USD of country total subsidies per inhabitant.