The global energy crisis has led to a surge in fossil fuel consumption subsidies, which reached a new all-time high in 2022. According to new estimates from the International Energy Agency (IEA), these subsidies exceeded USD 1 trillion for the first time, as global turmoil in energy markets pushed fuel prices well above what many consumers actually paid.
This record level of subsidies is more than double the 2021 levels, which were already nearly five times higher than in 2020, according to the IEA.
The IEA said that their analysis of the subsidies showed that “many of these government measures were not well targeted, and while they may have partially protected customers from skyrocketing costs, they artificially maintained fossil fuels’ competitiveness versus low-emissions alternatives.”