Fossil fuel subsidy reform ^*

News

Participation

Coordinated by New Zealand, the FFSR initiative is open to all WTO members. It currently has WTO members as co-sponsors. The initiative actively seeks the involvement of stakeholders from the private sector, civil society, international organizations and academia, who support discussions through technical expertise, experience-sharing and transparency about their activities.

Meetings

Key documents

FFSR Ministerial Statement, 26 February 2024	WT/MIN(24)/19 (including Work Plan for 2024-2025)
FFSR Ministerial Statement, 10 June 2022	WT/MIN(21)/9/Rev.2 (Revision of 14 December 2021 statement: WT/MIN(21)/9/Rev.1)
FFSR Work Plan 2022-23, 10 June 2022	WT/MIN(22)/8

Objective of the initiative

In February 2024, the 48 co-sponsors of the FFSR initiative issued an updated Ministerial Statement (WT/MIN(24)/19) accompanied by a comprehensive Work Plan for 2024-2025 and an annex with a non-exhaustive list of sample questions on fossil fuel subsidies and fossil fuel subsidy reform for regular use in WTO Trade Policy Reviews.  The Ministerial Statement builds on earlier statements from the 11th Ministerial Conference (MC11) in December 2017 (WT/MIN(21)/9/Rev.1) and the 12th Ministerial Conference in June 2022 (WT/MIN(21)/9/Rev.2).

Phasing out as soon as possible fossil fuel subsidies that do not address energy poverty or the just transition to low-carbon energy can make an important contribution to the objectives of the Paris Agreement on Climate Change and continued efforts to limit the temperature increase to 1.5 degrees above pre-industrial levels, the 2024 Ministerial Statement highlights. It can also lower global climate-related risks, significantly reducing the risks and impacts of climate change. The statement further recognises the role fossil fuel subsidy reform can play in delivering wider trade, economic, social and environmental benefits, including promoting more energy-efficient consumption, reducing pollution, and freeing up government funds to support a green and climate-resilient economy.

Co-sponsors of the initiative pledge to work to achieve the rationalisation, phase out or elimination of harmful fossil fuel subsidies, including through use of existing mechanisms or the development of new pathways to reform, as appropriate, via the following three pillars:

• Enhanced transparency
• Crisis support measures
• Identifying and addressing harmful fossil fuel subsidies

Co-sponsors further commit to take fully into account in all aspects of the WTO FFSR Initiative work programme consideration of the particular needs and circumstances of developing economies and the identification of approaches to address them in the adoption and implementation of fossil fuel subsidy reform. They also commit to minimise possible negative impacts and address essential energy needs of vulnerable groups, particularly in developing economies.

The FFSR initiative is part of broader discussions at the international level through which WTO members aim to address fossil fuel subsidy reform. These broader discussions include UN Sustainable Development Goal 12 (c) of the 2030 Agenda, the G20, the G7, Asia-Pacific Economic Cooperation, the Agreement on Climate Change, Trade and Sustainability, the V20 Group of Finance Ministers from climate-vulnerable economies, the Paris Agreement on Climate Change and the Addis Ababa Action Agenda on Financing for Development.

State of play

The FFSR co-sponsors adopted a Work Plan for the years 2024-25 at the 13th Ministerial Conference in February 2024. The Work Plan maps out in-depth action steps under three key pillars.

First, members have agreed to make fuller use of WTO mechanisms to enhance transparency and improve the exchange of information on fossil fuel subsidies and on fossil fuel subsidy reform efforts. To support this work, members of the FFSR Initiative have put together a set of sample questions to promote the regular incorporation of information on fossil fuel subsidies and their reform in WTO Trade Policy Reviews. They also plan to extend the transparency analysis to other WTO processes and review information from other international processes.

Second, members are working to tackle crisis support measures, including by learning from members' experience with the design, review, adjustment and roll-back of temporary fossil fuel support measures to address energy crises. They also plan to develop guidelines to help make any such measures targeted, transparent, and temporary in the future. In addition, they will periodically review how members are reforming, reducing and removing such temporary measures.

Third, members are working on identifying key types of fossil fuel subsidies and how they harm the environment and trade. On this basis, they aim to build broader recognition and support for pathways to reform, and to reduce and eliminate those fossil fuel subsidies. This work includes workshops and experience-sharing on successful approaches to reform. Members are also committed to fully considering the social and development dimensions of reform.

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* The documents on this page relate to an initiative among a group of WTO members and are not part of a multilaterally agreed WTO process. Back to text