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Fossil-Fuel Subsidies in the EU’s Eastern Partner Countries

Estimates and Recent Policy Developments

image of Fossil-Fuel Subsidies in the EU’s Eastern Partner Countries

Based on the OECD standard methodology, the study presents quantitative estimates of government support to consumers and producers of coal, oil and related petroleum products and natural gas, and electricity and heat generated from these fossil fuels. This report summarises the main findings of the analysis of fossil-fuel subsidy schemes in the six European Union's Eastern Partner (EaP) countries – Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine. The study updates the 2018 Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries by providing data and estimates for 2016‑19. The analysis focuses on measuring two major types of fossil-fuel subsidies: direct transfers of funds to producers and consumers; and tax expenditure. This report also briefly discusses the taxation and energy pricing policies that have had direct or indirect impact on the evolution of fossil-fuel subsidies in the region. Detailed estimates of all individual support measures for each of the six countries are provided in Annexes to the report.

English Also available in: Russian

Setting the scene

This chapter introduces some of the main issues that frame the analysis of and the debate on fossil-fuel subsidies and their reforms. It examines the need to monitor and measure fossil-fuel subsidies, including the difficulty of removing them once they are in place. Subsequently, it looks at drivers of fossil-fuel subsidy reform, including international frameworks such as the Sustainable Development Goals, the Paris Summit on Climate Change and the European Green Deal. Next, it discusses two complementary databases developed by the OECD and IEA to track government support to fossil-fuel production and consumption. The chapter ends with reflections on the COVID-19 crisis and its impact on energy markets and fossil-fuel subsidies.

English Also available in: Russian

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