Proposals to Reduce Fossil Fuel Subsidies

This fact sheet from the Environmental and Energy Study Institute outlines current U.S. fossil fuel subsidies and the Biden-Harris Administration's proposals to reduce them through Executive Order 14008 and the FY2022 budget, including tax preference repeals and leasing reforms.

• Direct U.S. subsidies to the fossil fuel industry are estimated at approximately $20.5 billion annually, consisting of $14.7 billion in federal and $5.8 billion in state subsidies. When health, environmental, and climate externalities are included, the total estimated subsidy rises to $649 billion per year.
• The Biden-Harris Administration's FY2022 budget proposal aims to eliminate fossil fuel subsidies by repealing 13 tax preferences, which is projected to increase federal revenue by about $35 billion over 10 years. Additionally, reforming the taxation of foreign fossil fuel income could raise $86 billion over the same period.
• Federal lands provide subsidies through low royalty rates and inexpensive leases; the onshore royalty rate has been 12.5 percent since 1920 and lease prices have remained at $2 per acre since 1987. The Congressional Budget Office suggests that raising the onshore royalty rate to 18.75 percent for new parcels would generate $200 million in federal revenue over ten years.
• The U.S. has provided over $13 billion for overseas fossil fuel projects between 2015 and 2020 through the U.S. International Development Finance Corporation (DFC), the Overseas Private Investment Corporation (OPIC), and the United States Export-Import Bank (EXIM). In April 2021, the DFC committed to reaching net-zero emissions in its portfolio by 2040.
• The Department of Energy (DOE) historically subsidized fossil fuels via research and development (R&D), with 24 percent of its R&D budget spent on fossil energy between 1978 and 2018.

APA

Bertrand, S. (2021). Proposals to Reduce Fossil Fuel Subsidies. Environmental and Energy Study Institute. https://www.eesi.org/papers/view/fact-sheet-proposals-to-reduce-fossil-fuel-subsidies-2021

Chicago

Bertrand, Savannah. Proposals to Reduce Fossil Fuel Subsidies. Environmental and Energy Study Institute, 2021. https://www.eesi.org/papers/view/fact-sheet-proposals-to-reduce-fossil-fuel-subsidies-2021.

Wikipedia

{{cite report |last1=Bertrand |first1=Savannah |title=Proposals to Reduce Fossil Fuel Subsidies |publisher=Environmental and Energy Study Institute |date=23 July 2021 |url=https://www.eesi.org/papers/view/fact-sheet-proposals-to-reduce-fossil-fuel-subsidies-2021 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bertrand2021proposals, author = {Bertrand, Savannah}, title = {{Proposals to Reduce Fossil Fuel Subsidies}}, institution = {Environmental and Energy Study Institute}, year = {2021}, month = jul, url = {https://www.eesi.org/papers/view/fact-sheet-proposals-to-reduce-fossil-fuel-subsidies-2021}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }