From Commitment to Implementation

The guide argues that fossil fuel subsidies (FFSs) are misaligned with climate and fiscal goals and proposes a three-step approach to phase them out: establishing a whole-of-government coordination mechanism, categorizing subsidies into three timelines based on risk and feasibility, and executing detailed implementation plans with clear accountability. It emphasizes that while developed countries should lead with faster reforms, developing countries may require longer timelines and more robust social protection measures to ensure a just transition.

• Fossil fuel subsidies (FFSs) create significant negative impacts by burdening national budgets, increasing fiscal deficits, diverting resources from essential services, and disproportionately benefiting wealthier households.
• The guide proposes a 'whole-of-government approach' to prevent siloed decision-making, suggesting the use of an interministerial task force or committee led by a high-ranking ministry to coordinate planning and reform across sectors such as energy, finance, agriculture, and transport.
• Subsidies are categorized into three phase-out timelines based on their impact on energy security, social/economic disruption, and political sensitivity: 'quick phase-out' (within 1 year), 'phase-out with a robust strategy' (within 24 years), and 'time-limited exemption from phase-out' (4+ years).
• Category 1 (Quick phase-out) includes producer subsidies for new fossil fuel development, such as tax deductions for exploration costs and royalty relief for new projects, as well as consumer subsidies for luxury uses like private jets and yachts.
• Category 2 (Phase-out with a robust strategy) covers subsidies that may trigger public backlash or affect competitiveness, such as regulated retail fuel prices below market rates or energy tax exemptions for energy-intensive industrial sectors.
• Category 3 (Time-limited exemption) is reserved for rare cases where phase-out is not yet technically feasible or would cause severe harm, such as LPG subsidies for vulnerable households without electricity or subsidies for post-production environmental remediation.
• Implementation of phase-out plans requires specific actions including affordability analysis, the design of mitigation measures like targeted cash transfers, and regular annual reporting to maintain accountability.
• The guide notes a capacity gap between developed and developing countries; developed nations are expected to move faster and lead by example, while developing nations may need longer timelines to establish necessary social protection and delivery mechanisms.
• Existing government efforts illustrate various targets: Italy committed to reducing environmentally harmful subsidies by at least EUR 2 billion in 2026 and EUR 3.5 billion by 2030, while France mandated a 30% reduction in the ratio of FFSs to positive expenditures by 2027.

APA

Kuehl, J., Skovgaard, J., & Cavolo, M. (2025). From Commitment to Implementation. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-11/fossil-fuel-subsidy-phase-out-plans.pdf

Chicago

Kuehl, Jonas, Jakob Skovgaard, and Mario Cavolo. From Commitment to Implementation. International Institute for Sustainable Development, 2025. https://www.iisd.org/system/files/2025-11/fossil-fuel-subsidy-phase-out-plans.pdf.

Wikipedia

{{cite report |last1=Kuehl |first1=Jonas |last2=Skovgaard |first2=Jakob |last3=Cavolo |first3=Mario |title=From Commitment to Implementation |publisher=International Institute for Sustainable Development |date=November 2025 |url=https://www.iisd.org/system/files/2025-11/fossil-fuel-subsidy-phase-out-plans.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kuehl2025from, author = {Kuehl, Jonas and Skovgaard, Jakob and Cavolo, Mario}, title = {{From Commitment to Implementation}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = nov, url = {https://www.iisd.org/system/files/2025-11/fossil-fuel-subsidy-phase-out-plans.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }