Fact Sheet Proposals to Reduce Fossil Fuel Subsidies

This fact sheet from the Environmental and Energy Study Institute details the scale of fossil fuel subsidies in the United States, the discrepancy between domestic pledges and international funding, and specific legislative and budgetary proposals to reduce these subsidies.

• In 2022, fossil fuel subsidies in the United States reached $757 billion according to the International Monetary Fund, consisting of $3 billion in explicit subsidies and $754 billion in implicit subsidies related to environmental degradation and negative health impacts.
• The U.S. federal government experienced a shift in its financial relationship with natural gas and petroleum; while tax revenues exceeded subsidies by $1.1 billion in FY 2016, subsidies exceeded revenue by $2.1 billion by FY 2022. Conversely, federal tax subsidies for coal fell from $1.9 billion in FY 2016 to $590 million in 2022.
• Despite a 2021 pledge to stop funding new fossil fuel projects abroad and a goal by the U.S. International Development Finance Corporation (DFC) to reach net-zero emissions in developing countries by 2040, the U.S. committed more than $1.8 billion to overseas fossil fuel projects in 2023 through the DFC and the U.S. Export-Import Bank.
• The Biden-Harris Administration's FY 2024 budget request proposes eliminating 13 fossil fuel tax preferences and credits, including those for marginal wells and coal royalties treated as long-term capital gains, which would reduce the federal deficit by nearly $31 billion over 10 years. Combined with proposed changes to taxation rules for foreign income of U.S. oil and gas companies, the total projected savings are $96.9 billion.
• The Inflation Reduction Act (IRA) provides subsidies to fossil fuel companies, including $1.55 billion for methane emission reductions and modified 45Q tax credits for carbon dioxide sequestration. These credits offer $85 per ton for permanent storage and $60 per ton for enhanced oil recovery, increasing to $180 and $130 respectively for direct air capture projects.

APA

Environmental and Energy Study Institute (2024). Fact Sheet Proposals to Reduce Fossil Fuel Subsidies. https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2024.pdf

Chicago

Environmental and Energy Study Institute. Fact Sheet Proposals to Reduce Fossil Fuel Subsidies. 2024. https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2024.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=Fact Sheet Proposals to Reduce Fossil Fuel Subsidies |date=January 2024 |url=https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2024.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2024fact, author = {{Environmental and Energy Study Institute}}, title = {{Fact Sheet Proposals to Reduce Fossil Fuel Subsidies}}, institution = {Environmental and Energy Study Institute}, year = {2024}, month = jan, url = {https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_2024.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }