Fossil fuel subsidies in the UK: Who pays, who profits?

Date: 13 May 2025

Summary and demands

• The UK government currently provides an estimated £17.5 billion in fossil fuel subsidies and support per year. This figure includes subsidies for the fossil fuel industry (producers) and for consumers of energy (the public). Taxpayer-funded financial support for the fossil fuel industry stands at its highest level since 2016, demonstrating the continued inefficiency of our fossil-fuelled energy system.

• Since coming to power, the Labour government has shown its willingness to tackle fossil fuel subsidies by joining the Coalition on Phasing Out Fossil Fuel Incentives Including Subsidies (COFFIS) at COP29 last year. But it has taken little concrete action to reduce subsidies so far. In fact, current policies will result in a slight increase in fossil fuel subsidies over this parliament, totalling an estimated £87.5 billion over five years.

• Continued support for the fossil fuel industry goes against the interests of working people in the UK and globally. Climate-vulnerable countries in the global south have been clear – through actions like pushing for a Fossil Fuel Non-Proliferation Treaty – that a managed phase-out of fossil fuels is the only fair solution to the climate crisis. Continued subsidies are an obstacle to that phase-out.

We call on the UK government to commit to:

• Immediately end all tax reliefs for the trillion-dollar fossil fuel industry.

• Close loopholes in the ban on UK overseas finance supporting fossil fuels.

• Redirect as much as possible of the £21.7 billion promised to carbon capture and storage (CCS) projects to a just, worker-led transition to renewable energy, and ensure that any remaining funding is structured to enable any profits to be recouped for public spending.

• A clear plan for phasing out consumer subsidies that ensures working people in the UK are protected, and that the fossil fuel industry is first to pay any additional costs.

• Redirect fossil fuel subsidies to renewable energy, with the goal of developing a system where consumers can benefit from affordable, domestically produced energy that is not subject to global price spikes, reducing the risk of needing subsidies.

• Work with other governments to achieve a fair global phase-out by, for example, joining the Fossil Fuel Non-Proliferation Treaty.