Fossil Fuel Subsidies


Public subsidies for the production and consumption of fossil fuels tend to discourage investments in energy efficiency improvement, and the development of alternative, low-greenhouse energy supplies.


Fossil Fuel Subsidies Versus Renewable Energy

Fossil fuel subsidies impede renewable energy development.

Public subsidies to the production and consumption of fossil fuels are a substantial barrier to the development of a sustainable energy system. These subsidies distort the market in such a way that it is difficult for sustainable energy technologies to compete. Removal of these subsidies could significantly reduce greenhouse gas emissions while also improving economic efficiency. (Riedy 2001)

Prioritising Subsidies for Removal

Remove fossil fuel subsidies that do not result in significant social and environmental gains.

Not all subsidies to fossil fuel producers and consumers should necessarily be removed. Those subsidies that provide gains in social welfare or environmental improvement that are greater than their economic cost can justifiably be retained. (Riedy 2003)


Energy and Transport Subsidies in Australia. Chris Riedy. Greenpeace. 2007.

Public Subsidies and Incentives to Fossil Fuel Production and Consumption in Australia (PDF). Chris Riedy, Institute for Sustainable Futures. 2001

Subsidies that Encourage Fossil Fuel Use in Australia (PDF). Chris Riedy. Institute for Sustainable Futures. 2003