Global fossil fuel subsidies reach all-time high of $1 trillion in 2022, up two-fold against 2021

Even as countries across the globe are trying to reduce their carbon footprint and cut their reliance on fossil fuels, the global subsidy bill for fossil fuels - including subsidies for oil, natural gas, electricity and coal - reached an all-time high of $1.1 trillion in 2022 due to the global energy crisis.

According to the Paris-based inter-governmental organisation --International Energy Agency,  the oil majors have also recorded high profits in 2022. The report added that this increase in subsidy for fossil fuels is a substantial jump over 2010.

In 2010, the subsidy bill for fossil fuels was around $590 billion and moved to the levels of $750 billion in 2012. However, it started coming down in 2016 to the levels of $370 billion but went higher to $580 billion in 2018.

2020 saw a sharp downtick, due to the Covid-19 pandemic and a sharp decline in energy prices, at $220 billion. It picked up in 2021 at $530 billion and now doubled in 2022 to $1.1 trillion, an all-time high.

When split further, the subsidies for natural gas and electricity consumption had more than doubled as against 2021 and oil subsidies rose 85 percent during the same time. Most of the subsidies were given in emerging markets and developing economies as well.

Interestingly, more than half of the subsidies were from fossil fuel exporting countries. Europe spent around $350 billion on energy subsidies, coupled with issues around supply from Russia. Moreover, everyone wanted to focus on renewables but the energy crisis didn’t allow that.

According to a Bloomberg report, fossil fuel subsidy was more than double the total investment seen in renewable energy sources. However, it should be noted that this increase in fossil fuel subsidies happened right after 2021’s United Nations Climate Change Conference, where all the nations agreed to accelerate efforts to phase out fossil fuel subsidies.