In 2017, the costs of unpriced externalities and the direct subsidies for fossil fuels (USD 3.1 trillion) exceeded subsidies for renewable energy by a factor of 19. The actual level of total energy sector subsidies is however and, in all probability, larger due to data gaps. The main factors are a lack of harmonised subsidy definition and the boundary conditions for the application of the definition – as well as a lack of harmonised calculation methodologies – and the difficulty of calculating many forms of subsidy (e.g., lax regulations for environmental remediation).

Following the International Renewable Energy Association’s (IRENA) technical paper ‘Energy Subsidies: Evolution in the global energy transformation to 2050’, the association hosted a webinar in September 2020, providing key insights on globally used subsidy definitions and calculation methods, explaining how a first ever estimate of total energy sector subsidies was arrived at and the strengths and limitations of the approach. The webinar presented the current level of energy sector subsidies and the trends in total energy subsidies by fuel or source and across sectors, and shared views on what needs to be done to facilitate a more robust debate around the reform of energy subsidies.

Note: The presentation has been sourced from IRENA’s website and the webinar video can be accessed by clicking here