European Court of Auditors finds that fossil fuels get more tax breaks than renewable energy

According to an external EU auditor, fossil fuels are getting more subsidies than renewable energy, and this could make it very difficult for the bloc to reach its climate goals. 

The European Court of Auditors warned that many of the 27 EU countries are taxing and subsidizing energy sources in a way that goes against their climate commitments, with a majority investing more into fossil fuels than renewable alternatives. 

For the review, the auditors looked at the current energy subsidies, carbon pricing measures, energy taxation levels in the region, and found contradictions in their policies. 

They found that tax benefits are often given to energy sources that create higher levels of pollution, and they may have an advantage over more efficient sources. 

For example, coal is, at the moment, taxed less than the more carbon-efficient natural gas, and electricity is taxed more than fossil fuels, despite them being a higher-carbon source. 

The auditors also noted that, despite most EU countries imposing high taxes on fuels, a number have chosen to keep these taxes as low as possible. 

“Low carbon prices and low energy taxes on fossil fuels increase the relative cost of greener technologies and delay the energy transition,” they said.

In the last ten years, fossil fuel subsidies have been provided consistently, and have been approximately €55 billion to €58 billion per year. In addition to this, energy taxes are worth an estimated €330 billion per year, which is 78% of the total environmental taxes. 

Many EU countries are continuing to provide aid through tax exemptions and reductions. The auditors claim that this is hindering the transition towards a greener economy. 

As part of the “European Green Deal,” the EU has committed to cutting greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels, and to becoming “climate neutral” by 2050. 

The European Court of Auditors argues, however, that renewable energy subsidies almost quadrupled between 2008 and 2019 and that the use of renewables to produce electricity increased in the last decade in all EU countries.

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