UK Leads EU Countries for Fossil Fuel Subsidies

The UK may have plans to ban the sale of all petrol and diesel powered cars by 2030, though a new report from the European Commission has revealed that the country offers the biggest fossil fuel subsidies in the EU. Despite pledges to address the continent's climate change issues, the UK leads the European Union when it comes to subsidies for coal, oil and gas.

It found that the United Kingdom currently channels around £10.5 billion into fossil fuel subsidies, which is significantly higher than the £7 billion spent on renewable energy. Furthermore, the report warned that across the EU subsidies for coal, oil and gas haven't changed since 2008, which indicates that member states aren't doing enough to combat climate change and fast-track a transition to clean energy.

EU fails to meet Paris climate agreement goals

Germany is currently leading the pack when it comes to eco-friendly subsidies, allocating £23 billion to renewable energy projects, which is almost three times higher than the funding used to support fossil fuels. Spain and Italy also won points for allocating more subsidies to renewable energy than fossil fuels.

In comparison, France, Sweden, Ireland and the Netherlands all joined the UK in budgeting more subsidies for fossil fuels than renewable energy. The report warned that while member states are implementing policies designed to meet Paris climate agreement goals and limit global warming, the efforts aren't achieving enough.

“However, despite this and the international commitments made in the context of G20 and G7, fossil fuel subsidies in the EU have not decreased,” reads the report. “EU and national policies might need to be reinforced to phase out such subsidies.”

UK slammed for slashing VAT rates

In the UK, a significant part of fossil fuel subsidies come from the 5% rate of VAT applied to domestic gas and electricity, which diverges from the standard 20% rate. Such policies have attracted criticism from environmental groups, though a government spokesperson was quick to assert that the UK does "not subsidise fossil fuels" and that the country is “firmly committed to tackling climate change by using renewables, storage, interconnectors, new nuclear and more to deliver a secure and dynamic energy market at the least possible cost for consumers.”

While the government maintains that the subsidies are designed to keep living costs low for the local population, climate change advocated stress that more focus should be placed on eco-friendly construction, smart insulation and other causes that don't support fossil fuel industries.

Craig Bennett, CEO at Friends of the Earth says, “Spiralling climate change is going to cost people and our economy huge sums of money, through the damage, disruption and instability it causes. So it’s astonishing that the UK government is still throwing taxpayers’ money at some of the world’s largest oil and gas companies. Ministers must switch funding to rapidly boost energy efficiency and renewables.”

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