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19 July 2021updated 05 Nov 2021 9:19am

Eliminating fossil fuel subsidies could slash emissions and save trillions – report

Governments could save $3trn and reduce CO2 emissions by 5.46 billion tonnes via the removal of fossil fuel consumption subsidies, says the International Institute for Sustainable Development.

By Energy Monitor Staff

The complete removal of fossil fuel consumption subsidies in 32 countries before 2025 could reduce CO2 emissions by almost 5.46 billion tonnes by 2030, equivalent to the annual emissions from 1,000 coal-fired power plants running non-stop at full capacity, says Canadian think tank the International Institute for Sustainable Development (IISD) in a new report.

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A petrol station employee refuels a motorcycle in India in July 2021. (Photo by Diptendu Dutta/AFP via Getty Images)

A “powerful” policy tool for lowering emissions by 6.09% by 2030, compared with a ‘business as usual’ scenario, the removal of fossil fuel subsidies could also help to finance the energy transition and save governments nearly $3trn over the same period, the report states.

The report investigates the level of emissions reductions that could be achieved via fossil fuel subsidy removal at a linear rate from 2021 to 2025, and a subsidy swap.

The latter scenario sees a removal of fossil fuel subsidies combined with a reallocation of 20% of the financial savings towards energy-efficiency improvements and 10% towards renewable energy power plans from 2021 to 2030. With a subsidy swap, emissions could fall by 9% by 2030, the IISD says.

Fossil fuel subsidy reform is a crucial tool in governments’ toolbox to reach net-zero emissions and must be used, the report concludes.

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What's the outlook for low carbon hydrogen?

The development of the hydrogen economy will support the fulfilment of decarbonization objectives, particularly for those sectors that are difficult to electrify, such as heavy industry, long-distance trucking, shipping, and aviation. GlobalData's Hydrogen Service tracks investment in the hydrogen sector, and provides you with:
  • A complete dataset of the low-carbon hydrogen projects across the globe.
  • Latest news across the hydrogen value chain.
  • Quarterly market analysis, with details of new projects, company activity and financial deals.
For more information, and to download sample pages from our quarterly market analysis, including a summary of the active and upcoming low-carbon hydrogen capacity by region, please enter your details.
by GlobalData
Enter your details here to receive your free Whitepaper.

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