Energy ministers at last week’s G20 meeting in China failed to agree to set a date to end fossil fuel subsidies. Previously, the G7 had agreed to end subsidies by 2025. However, this was something of a fudge as it failed to define what was meant by a subsidy.
The situation in Britain is a particular problem. The UK government claims that it does not provide any subsidy to fossil fuels. However, this is only true of direct grants and tax rebates that would be against EU state aid rules. But successive governments have worked around EU rules by hiding the subsidies in consumers’ bills.
It is likely that negotiations will continue for some time to try to get an agreement on the precise meaning of the word “subsidy”, with the result that the date for ending subsidies will get pushed back. But ultimately this is a meaningless argument because to have any chance of keeping global warming below 2C, rather than ending subsidies we (in the West) need to stop using fossil fuels by 2025.