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 organisations become available. The estimates are gathered 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 compare the end-use prices paid by fuel consumers with reference prices (such as import-parity prices). The Fossil Fuel Subsidy Tracker picks up IMF “explicit” (see note below) consumption subsidy estimates only (i.e. price gap). The IMF also includes production subsidies for selected countries as well as “implicit” (see note below) subsidies to fossil fuels. The “implicit” subsidies consider the undercharging for environmental costs and general consumption taxes and are therefore higher than the “explicit” subsidy estimates. IMF production and ”implicit” 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 judgement 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 of actual subsidy totals. This is because the OECD Inventory may have not captured all support measures or because those that were captured have not been fully quantified. For some measures values are not available or may only have partial data coverage. Therefore, blank cells should be considered as values that have not been estimated and not as zero.
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 tracker’s methodology is aligned with the one developed for reporting SDG indicator 12.c.1 (the amount of fossil fuel subsidies provided as a proportion of GDP) and is intended to bridge any reporting gap on the indicator. The methodology for SDG indicator 12.c.1 developed by the UN Environment Programme, the OECD, and IISD, is summarised in the following document: “Measuring Fossil Fuel Subsidies in the Context of the Sustainable Development Goals.”
The SDG methodology–and therefore the FFS Tracker–adopts the OECD Inventory approach for direct budgetary transfers and tax expenditures, and the IEA and IMF approach for induced transfers – i.e. price-gap approach. The fourth subsidy category in the OECD definition, transfer of risk, is not included in the Fossil Fuel Subsidy Tracker at this stage– which is aligned with the SDG approach.
Subsidy reporting, monitoring capacity, and data availability differ across economies. The methodology therefore 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.
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 1400 national and sub-national government budgetary transfers and tax expenditures providing preferential benefit to the production and consumption of fossil fuels in 52 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 judgement 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 are complemented with IMF estimates.
To avoid double-counting, a rule-of-thumb approach is used to combine the IEA estimates of consumer price support with OECD Inventory estimates for countries covered by both datasets. The IEA quantifies the underpricing of fossil fuels. Individual support measures in the OECD Inventory that lower the domestic price of a fuel can therefore already be captured by the IEA’s price gap approach. Adding such measures from the OECD Inventory to the IEA’s price gap estimates would be double-counting. To avoid this, the Fossil Fuel Subsidy Tracker uses the larger estimate – OECD or IEA – over the last six-year period of available data for a given country and fuel type. This 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.
However, estimates for overlapping countries cannot be broken down to the level of granularity displayed in the “Country Data” section of the website (OECD, 2021). 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, the OECD and IEA estimates cover 82 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 a source for 110 out of the 192 economies 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.