Fossil fuel companies in the United States receive around $31 billion in subsidies every year, according to a new report by Oil Change International. The figure, which has more than doubled since 2017, highlights the scale of public financial support for oil, gas and coal despite commitments to curb emissions.
A sharp rise in support
The research shows that annual subsidies have surged from an estimated $15 billion in 2017 to $31 billion today. This increase reflects both direct government spending and tax breaks designed to support fossil fuel producers. The study suggests that the real figure could be far higher, as several forms of indirect support and state-level incentives are not fully captured in the calculations.
The findings contrast sharply with the Biden administration’s climate ambitions, which include net zero targets and large-scale investment in renewable energy.
Types of subsidies identified
Subsidies cover a range of measures, from favourable tax regimes and deductions for drilling costs to funding infrastructure projects that benefit oil and gas firms. The report also notes government support for maintaining strategic reserves and covering environmental liabilities, which further reduces the financial burden on fossil fuel producers.
Critics argue that these mechanisms distort markets by keeping fossil fuel projects profitable even as cleaner alternatives become increasingly competitive.
Implications for climate policy
Campaigners warn that continuing subsidies undermines U.S. credibility in international climate negotiations. The International Energy Agency has repeatedly stated that no new oil and gas projects should proceed if the world is to meet Paris Agreement targets. Yet the scale of support for fossil fuels in the U.S. indicates that the industry remains deeply entrenched in policymaking.
Environmental groups argue that redirecting subsidies to renewable energy, electrification and energy efficiency could deliver far greater economic and environmental benefits.
Industry and political response
Industry representatives defend subsidies as essential for energy security and job creation, particularly in regions dependent on oil and gas production. Some policymakers also argue that removing subsidies abruptly could lead to higher energy prices and threaten domestic supply.
However, with public pressure mounting and evidence of accelerating climate risks, the debate over phasing out fossil fuel support is expected to intensify in the run-up to the U.S. presidential election.
Global context
The U.S. is not alone in heavily subsidising fossil fuels. A recent IMF report estimated that global fossil fuel subsidies reached $7 trillion in 2022, underscoring the gap between climate commitments and current policy. Analysts suggest that the persistence of subsidies worldwide continues to slow the transition to clean energy.
Newshub Editorial, 10 September 2025
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