A How-to Guide: Measuring subsidies to fossil-fuel producers

The document outlines a framework for identifying and quantifying producer subsidies in the fossil-fuel sector, drawing on methodologies from the OECD's agricultural Producer Support Estimate (PSE) and the Global Subsidies Initiative (GSI) manual. It categorizes producer subsidies into direct transfers, government revenue foregone, and government-provided goods or services. The guide highlights significant data gaps, noting that many governments lack full knowledge of their own subsidies and that information is often aggregated or confidential, particularly in countries like China and Indonesia. It suggests that the goal of estimation should be to determine the order of magnitude of subsidies to prioritize reform.

• The Global Subsidies Initiative (GSI) estimates that annual subsidies to fossil-fuel producers are likely to be at least $100 billion U.S.
• Producer subsidies are broadly categorized into three types of preferential treatment: for selected companies (such as national oil companies), for a specific sector or product compared to others, or for sectors/products in one country compared internationally.
• The OECD's Producer Support Estimate (PSE) and Consumer Support Estimate (CSE) approach, originally developed for agriculture, serves as a useful organizing framework and set of methodologies for calculating fossil-fuel subsidies.
• Common producer subsidies in the fossil-fuel sector frequently take the form of reduced royalty payments and government revenues foregone, such as accelerated depreciation allowances or reduced VAT.
• Measuring subsidies is hindered by poor data quality and availability; many governments are unaware of the full extent of their subsidies, and data is often scattered across ministries or kept confidential.
• Specific national data challenges include Germany's use of outdated tax expenditure definitions, the United States' use of multi-industry aggregates that complicate sectoral attribution, China's lack of disaggregated information on tax exemptions, and Indonesia's use of confidential production-sharing contracts.
• The guide recommends that subsidy estimation should aim to ascertain the order of magnitude of a subsidy rather than an exact figure to help governments identify priorities for reform.

APA

International Institute for Sustainable Development (2010). A How-to Guide: Measuring subsidies to fossil-fuel producers. https://www.iisd.org/gsi/sites/default/files/pb7_ffs_measuring.pdf

Chicago

International Institute for Sustainable Development. A How-to Guide: Measuring subsidies to fossil-fuel producers. 2010. https://www.iisd.org/gsi/sites/default/files/pb7_ffs_measuring.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=A How-to Guide: Measuring subsidies to fossil-fuel producers |date=July 2010 |url=https://www.iisd.org/gsi/sites/default/files/pb7_ffs_measuring.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2010howto, author = {{International Institute for Sustainable Development}}, title = {{A How-to Guide: Measuring subsidies to fossil-fuel producers}}, institution = {International Institute for Sustainable Development}, year = {2010}, month = jul, url = {https://www.iisd.org/gsi/sites/default/files/pb7_ffs_measuring.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }