Fossil-fuel firms receive US subsidies worth $31bn each year, study finds

"The US currently subsidizes the fossil-fuel industry to the tune of nearly $31bn per year, according to a new analysis. That figure, calculated by the environmental campaign group Oil Change International, has more than doubled since 2017. And it is likely a vast understatement, due to the difficulty of quantifying the financial gains from some government supports, and to a lack of transparency and reliable data from government sources, the group says."

"These handouts pose a massive barrier to decarbonization, says the new report, which experts have long warned is urgently necessary to avert the worst consequences of the climate crisis. These subsidies allow for new production that would not otherwise occur, said Collin Rees, US program manager at Oil Change International and the primary author of the new analysis. They also, to an enormous extent, go to lining the pockets of shareholders and investors and fossil fuel executives."

US federal and government-funded supports for fossil fuels total nearly $31bn per year and have more than doubled since 2017. That figure likely understates actual support because many financial gains are difficult to quantify and government data lacks transparency and reliability. These subsidies create a substantial obstacle to decarbonization by enabling production that would otherwise be uneconomic and by channeling large benefits to shareholders, investors, and executives. The supports include tax breaks, discounted resource acquisition rates, direct appropriations, tax rules offsetting foreign taxes, and tax credits for carbon capture often used for enhanced oil recovery, producing extraordinary returns on investment.

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