Fossil Fuel Subsidies Cheat Sheet — Where Are They?

Photo: ©hicagoenergy, Creative Commons/Flickr

In Section 209 of last week’s climate Executive Order, the President directed all federal agencies to identify “any fossil fuel subsidies provided by their respective agencies, and then take steps to ensure that…Federal funding is not directly subsidizing fossil fuels.” In addition, it instructed the Director of the Office of Management and Budget “to eliminate fossil fuel subsidies from the budget request for Fiscal Year 2022 and thereafter.”  So where are all the subsidies, you ask?

In 2019, the Environmental and Energy Study Institute (EESI) published a “Fact Sheet” on fossil fuel subsidies and their societal cost. Agencies could start their search there.  Many of these subsidies have been around for a century, and often the circumstances relevant at the time subsidies were implemented no longer exist.  EESI identifies two types of fossil fuel subsidies — there are provisions in the tax code that are designed to specifically support and reward domestic fossil fuel‐related production — these are direct subsidies. And there are other provisions in the tax code aimed at businesses in general, and these are indirect subsidies.   The EESI list covers both types.

Why This Matters:  Swiftly identifying and eliminating these tax breaks will begin to make up for the damage caused by a century of fossil fuel handouts, and will save the taxpayers billions.

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