Governance of the EU-Wide Phase-Out of Fossil Fuel Subsidies by 2020

The EU has established a framework to phase out fossil fuel subsidies by 2020, including a legal obligation to end hard coal mining subsidies by 2018. While the EU has reduced its own direct budgetary support and some member states have implemented tax reforms, significant challenges remain. The document highlights a tension between official commitments and actual practice, noting that some countries may use transparency measures to avoid eliminating a broad range of subsidies. A significant portion of coal-related fiscal support in countries like Germany, Spain, and the Czech Republic has been redirected toward just transition measures for workers and site rehabilitation.

• Between 2014 and 2016, the annual average value of all government support—including fiscal support, public finance, and state-owned enterprise investment—for the production and consumption of coal, gas, and oil in the EU was EUR 112 billion.
• The European Union established a legal requirement for member states to remove subsidies for hard coal mining by the end of 2018.
• In January 2018, the European Parliament supported three specific measures to track fossil fuel subsidy phase-outs: requiring progress reports in the State of the Energy Union report, mandating national policies and timelines within National Energy and Climate Plans (NECPs) by the end of 2019, and providing updates in the 2018 report on energy prices and costs.
• A substantial majority of fiscal support for coal mining in Germany, Spain, and the Czech Republic (between 75% and 99%) was dedicated to decommissioning and rehabilitation of sites and supporting a just transition for communities and workers.
• The German government spent an estimated EUR 18.6 billion between 2005 and 2014 to support the sale of coal from hard coal mines to steel and electricity producers, with annual costs in North Rhine Westphalia alone estimated at EUR 1.86 billion.
• There is a risk that EU member states may use transparency and reporting mechanisms to avoid actual reform; for example, while OECD data showed Germany had 23 fossil fuel subsidies worth EUR 3.9 billion in 2016, Germany claimed in its G20 peer review that only two were 'inefficient' and required removal.
• The EU has integrated fossil fuel subsidy reduction into international agreements, including commitments to the G7 to phase out inefficient subsidies by 2025, annual commitments to the G20 since 2009, and a goal of 'progressively reducing subsidies for fossil fuels' in the EU–Singapore Free Trade Agreement.

APA

International Institute for Sustainable Development (n.d.). Governance of the EU-Wide Phase-Out of Fossil Fuel Subsidies by 2020. https://www.iisd.org/sites/default/files/publications/stories-g20-eu-en.pdf

Chicago

International Institute for Sustainable Development. Governance of the EU-Wide Phase-Out of Fossil Fuel Subsidies by 2020. n.d. https://www.iisd.org/sites/default/files/publications/stories-g20-eu-en.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Governance of the EU-Wide Phase-Out of Fossil Fuel Subsidies by 2020 |url=https://www.iisd.org/sites/default/files/publications/stories-g20-eu-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndgovernance, author = {{International Institute for Sustainable Development}}, title = {{Governance of the EU-Wide Phase-Out of Fossil Fuel Subsidies by 2020}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/sites/default/files/publications/stories-g20-eu-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }