Proposals to Reduce Fossil Fuel Subsidies (2021)

This fact sheet by the Environmental and Energy Study Institute outlines current U.S. fossil fuel subsidies and various proposals from the Biden-Harris Administration and the 117th Congress to reduce or eliminate them across tax expenditures, land leasing, research and development, and international financing.

• 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 accounting for climate, environmental, and health externalities, the total estimated subsidy reaches $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 $35 billion over 10 years. An additional $86 billion could be raised over the same period by reforming the taxation of foreign fossil fuel income.
• The U.S. government provides subsidies through below-market lease prices and low royalty rates on public lands. Federal land lease prices have remained at $2 per acre since 1987, and the onshore royalty rate has been 12.5 percent since 1920. Increasing the onshore royalty rate to 18.75 percent for new parcels is estimated by the Congressional Budget Office to raise $200 million in federal revenue over ten years.
• The Department of Energy (DOE) is shifting its R&D funding away from traditional fossil fuels. The FY2022 budget request proposes increasing funding for the Office of Fossil Energy and Carbon Management (FECM) from $750 million to $890 million, refocusing it on "climate-centric activities" like carbon capture and clean hydrogen. Additionally, the Title 17 Innovative Technology Loan Guarantee Program would stop providing guarantees for traditional fossil fuel projects, focusing instead on net-zero emissions and a carbon-pollution free electric sector by 2035.
• Between 2015 and 2020, the U.S. provided over $13 billion for overseas fossil fuel projects through the Export-Import Bank (EXIM), the Overseas Private Investment Corporation (OPIC), and the U.S. International Development Finance Corporation (DFC). In April 2021, the DFC committed to reaching net-zero emissions in its portfolio by 2040.

APA

Bertrand, S. (2021). Proposals to Reduce Fossil Fuel Subsidies (2021). Environmental and Energy Study Institute. https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2021.pdf

Chicago

Bertrand, Savannah. Proposals to Reduce Fossil Fuel Subsidies (2021). Environmental and Energy Study Institute, 2021. https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2021.pdf.

Wikipedia

{{cite report |last1=Bertrand |first1=Savannah |title=Proposals to Reduce Fossil Fuel Subsidies (2021) |publisher=Environmental and Energy Study Institute |date=July 2021 |url=https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2021.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bertrand2021proposals, author = {Bertrand, Savannah}, title = {{Proposals to Reduce Fossil Fuel Subsidies (2021)}}, institution = {Environmental and Energy Study Institute}, year = {2021}, month = jul, url = {https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2021.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }