27th Jan 2022

EU 'missed chance' to set fossil-fuel subsidies deadline

  • Some €52bn was spent on fossil-fuel subsidies in the EU in 2020 alone (Photo: x1klima)
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EU institutions reached a common agreement late on Wednesday (1 December) over the 8th EU Environment Action Programme (EAP) - after months of intense negotiations, but without concrete deadlines for phasing out fossil-fuel subsidies.

MEPs failed to convince national capitals of the need to set deadlines for phasing out these and other environmentally-harmful subsidies under this legally-binding commitment - that will guide the EU's environmental policy until 2030.

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The new EAP, which builds on the previous 2013 version, includes provisions for a 'wellbeing economy', to be measured 'beyond GDP' indicators, which has been welcomed by civil society as a step in the right direction.

However, green groups like WWF Europe attacked EU policy-makers for missing "a critical opportunity to set an end date for public finance for fossil fuels and environmentally harmful activities".

"The EU has failed the first post-COP test on firmly committing to a deadline for phasing out fossil fuel and other environmentally harmful subsidies," said Rebecca Humphries from WWF Europe, referring to the major UN climate talks (COP26) that took place in Glasgow last month.

While the 8th EAP's initial proposal aimed at "phasing out environmentally harmful subsidies at Union and national level," EU lawmakers strengthened the commission's proposal significantly, by setting concrete deadlines.

Specifically, they argued that the phase-out of fossil fuel subsidies should take place in 2025 at the latest and for all other environmentally-harmful subsidies in 2027 at the latest.

EU capitals, however, were not ready to support setting such a clear deadline under the EAP - since this would have made such commitments legally-binding and trigger a legislative process.

Nevertheless, MEPs manage to secure a commitment to phase out all environmentally-harmful subsidies, in particular fossil-fuel subsidies, at Union, national, regional and local level "without delay".

'Hell of a fight'

Under the compromise, they agreed to set out "a deadline for the phasing-out of fossil fuel subsidies, consistent with the ambition of limiting global warming to 1.5. degrees" – with a binding legislative framework to monitor member states' progress towards phasing out of such public funding.

Additionally, co-legislators agreed to set up a common approach to identify other environmentally-harmful subsidies.

By 2023, the EU commission should present criteria to identify member states' progress made in phasing these other subsidies out.

According to Green MEP Grace O'Sullivan, the parliament's lead negotiator during the trilogue negotiations, "setting a deadline" for the phasing out of fossil fuel subsidies that is consistent with the ambition to limit global warming to 1.5c was "a hell of a fight".

"[But] COP26 and COP15 have shown that ending public funding for activities that destroy our planet are finally on the global agenda and the EU must lead on their phase out by adopting concrete deadlines," she also said.

According to the EU commission own figures, €52bn was spent on fossil fuel subsidies in the EU in 2020 – only fractionally down on €56bn in 2019.

However, even this reduction is explained by the falling consumption triggered by the Covid-19-related restrictions.

In fact, fossil-fuel subsidies have increased in 11 member states since 2015.

At COP26, 11 EU member states pledged to end public funding for fossil-fuel projects abroad by 2022.

"The fact that the pledge is for the end of next year shows an impressive level of ambition: If we can be this ambitious about fossil-fuel subsidies abroad, we can and must be ambitious about ending fossil-fuel subsidies at home in the EU," O'Sullivan told EUobserver.

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