News

Fossil fuel subsidies are 12 times support for renewables, study shows

Global subsidies for fossil fuels dwarf support given to renewable energy sources such as wind and solar power and biofuels, according to a new report by Bloomberg New Energy Finance.

(Source: Bloomberg New Energy Finance) Governments last year gave US$43 billion to US$46 billion of support to renewable energy through tax credits, guaranteed electricity prices (feed-in tariffs) and alternative energy credits, the London-based research group said in a statement. That compares with the US$557 billion that the International Energy Agency last month said was spent to subsidise fossil fuels in 2008.

“One of the reasons the clean energy sector is starved of funding is because mainstream investors worry that renewable energy only works with direct government support,” said Michael Liebreich, chief executive of New Energy Finance. “This analysis shows that the global direct subsidy for fossil fuels is around ten times the subsidy for renewables.”

Countries from the USA and Germany to Brazil and China are trying to boost power derived from crops, the wind and the sun in order to lower emissions of greenhouse gases while increasing the security of energy supplies. The Group of 20 nations a month ago renewed a commitment to phase out fossil fuel subsidies “over the medium term.” No target date was set.

The single most expensive clean energy subsidy last year was Germany’s feed-in tariff, which cost ratepayers US$9.6 billion, New Energy Finance said. Across Europe, such tariffs amounted to US$19.5 billion.

The USA in 2009 provided the most clean energy subsidies, at US$18.2 billion, according to New Energy Finance. China provided about US$2 billion of support, a “deceptive” figure because the country’s state-owned banks also provide “much crucial support” through low-interest loans, the group said.

So far this year, the state-controlled China Development Bank has extended US$24 billion in loans to Yingli Green Energy Holding Co., Trina Solar Ltd., Suntech Power Holdings Co., . Xinjiang Goldwind Science & Technology Co., and Solarfun Power Holdings Co.

Share this article

More services

 

This article is featured in:
Policy, investment and markets