Europe is undermining its own climate policy by continuing to subsidize fossil fuels on a large scale. According to a critical report by the European Court of Auditors, Member States still spend more than 55 billion euros a year on this.
Subsidies for clean sources have almost quadrupled in the period 2008-2019, but that is of little benefit because subsidies for coal and gas have remained practically constant over exactly the same period.
Even today, fifteen Member States spend even more money on fossil fuels than on clean sources such as sun and wind, according to the Court of Audit. “That stands in the way of an efficient energy transition,” says PvdA tax specialist in Europe Paul Tang. “Mopping with the tap open. These multi-billion dollar subsidies are slowing down the transition to cleaner energy and polluting our planet.”
According to the Court of Auditors, the fault lies partly in the energy taxes. This means that the tax on coal is lower than on gas and on fossil fuels in general significantly lower than on electricity. It should be just the other way around.
Not working out
According to Tang, in 2009 the EU promised to phase out all fossil fuel subsidies by 2020. Not only has that not happened, the Court of Audit does not believe that this will succeed in the coming years. “The phasing out of fossil fuel subsidies by 2025 will represent a challenging social and economic transition,” said Viorel Stefan, the Romanian Court of Auditors responsible for the study.
Tang, chairman of the EP tax committee, sees every reason in the Court of Auditors’ report to also take a look at Dutch energy policy. “While the Netherlands performs the second-worst in the transition to sustainable energy, it also has one of the lowest subsidies for this. We need to boost our energy transition. Smart subsidies can help with this. Instead of 5 billion in a new nuclear power plant, the government should stop subsidies in ready technologies, such as solar panels. Last year, that subsidy pot was used up within six months, as a result of which many projects were delayed.”
Brussels does not seem to be turning its back for the time being. Precisely next Wednesday, it will come up with proposals to label gas and nuclear energy as clean, in the hope of freeing up tens of billions for these two energy sources from banks and other large investors. According to the environmental movement, this puts sun and wind further and further behind.
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