ODI: At least US$63.9 billion in annual coal subsidies from the G20 countries

The Overseas Development Institute (ODI) has released a new report showing that subsidies to coal in the G20 countries are at least $63.9 billion a year.

The report entitled "G20 Coal Subsidies: Tracking Government Support for Recessive Industries" says that the annual subsidies for coal in G20 countries reach at least $63.9 billion domestically and internationally, despite pledges to phase out fossil fuel subsidies since 2009. Specifically, the report found that governments of the G20 countries support 27.6 billion US dollars in domestic and international public financing, 15.4 billion US dollars in financial support and 20.9 billion US dollars in investment by state-owned enterprises (SOEs). In addition, despite the global trend towards clean energy, support for coal has increased in recent years from the G20 government. ODI found that support increased slightly from $17.2 billion in 2013-2014 to $47.3 billion in 2016-2017. That is to say, in three years, the number has increased by 175%.

"It has been ten years since the G20 promised to phase out fossil fuel subsidies, but it is surprising that some governments have actually increased their support for coal-fired power plants," ODI said. "There is growing momentum for governments to take urgent action to deal with the climate crisis. Ending subsidies for coal will bring environmental, social and economic benefits to all and help create a level playing field for clean energy.

The report does its best to track all the ways in which the G20 countries financially support coal, but not all. ODI shows that several countries provide "substantial subsidies" for coal-fired electricity consumption, but adds that "transparency is very limited" and details are not yet clear. Indonesia, for example, is a country that can be seen as supporting coal, providing more than $2.3 billion in financial support. According to the report's authors, Indonesia's "clear reason" for offering such support is "to compensate for rising coal prices at power plants and the need to sell electricity to domestic consumers at regulated prices."

"In fact, government support for coal is much greater than the data we reported, because many G20 countries still lack transparency in many ways of subsidizing coal," explains Ivetta Gerasimchuk, head of IISD at the International Institute for Sustainable Development.

The report was released only a few days before the annual G20 summit in Japan, emphasizing Japan's continued support for overseas coal. Specifically, Japan remains one of the G20's largest overseas coal public financing providers, providing up to $5.2 billion annually. This runs counter to Japanese Prime Minister Shinzo Abe's statement in September 2018 that "climate change may endanger the lives of all people... we must take stronger action to reduce the use of fossil fuels."