Phasing out fossil fuel subsidies

Scope and objectives

On Friday, 24 January 2025, the EESC will hold a public hearing in connection with its ongoing own-initiative opinion on Phasing out fossil fuel subsidies while ensuring European competitiveness, mitigating the cost-of-living crisis, and promoting a just transition. The EESC has already called for phasing out harmful fossil fuel subsidies and now would like to focus on how to phase them out responsibly while ensuring European competitiveness and a just transition.

This approach aims to include:

• scaffolding of the phase-out (which subsidies must be phased out first and which later) to minimise the effects on competitiveness and society,

• redirection of resulting public budget savings to decarbonisation, clean energy production and infrastructure,

• support for vulnerable enterprises and households, and benefits for businesses, consumers and the environment from the transition to a clean energy system.

The identified pathways must be considered from the perspective of different industries and SMEs, workers, consumers and households.

The opinion would also consider phasing out fossil fuel subsidies in relation to developments outside of the EU to drive decarbonisation and ensure a level playing field.

This event will be webstreamed and interpreted into EN, ES, and PL. For any question, please contact us by replying to this email. Participants will be able to interact using Slido with code #FFsubsidies.

Context

Fossil fuel dependency continues to burden household finances, businesses and industries, energy security and public health. Phasing out harmful fossil fuel subsidies is a key part of transitioning to a low-carbon economy and society while transitioning away from fossil fuels to a clean energy system which will contribute to a stronger, fairer and more competitive Europe.

On the other hand, phasing out subsidies can have negative impacts for households and businesses, for example in the costs of energy – particularly in the short term – or in the need to replace fossil fuel-based equipment and technologies with low carbon one, with a mid- to long-term view. Therefore, it is crucial to identify pathways for a responsible phase out that reconcile environmental, economic and social sustainability. This can be done for example by introducing parallel incentives and by transitionary periods, and also by categorising and prioritising the subsidies based on their harmfulness and feasibility of phase out.

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