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Fossil fuel subsidies up; green levies down.

The 'distorted energy priorities of the Coalition government'

A damning new report on the subsidies given to the fossil fuel industry demonstrates the deeply distorted energy priorities of the Coalition government, say the Green Party.

The new report by the Overseas Development Institute (ODI) [1] suggests the UK is now the world's fifth largest subsidiser of fossil fuels after the US, Russia, Australia and Germany. The ODI claims that the UK government subsidised the fossil fuel industry to the tune of £4.3 billion in 2011. This critical report comes at a time when the Coalition government is considering a review of the green levy element of energy bills, which support energy efficiency and renewable power.

Molly Scott Cato, the Green Party’s Finance Speaker and lead South West candidate for next May’s European Elections said:

"Subsidising fossil fuels on such a massive scale while seeking to cut investment that helps reduce fuel poverty and supports renewable energy demonstrates the warped priorities of this government. Fossil fuel subsidies severely hinder the development of an efficient and low-carbon economy by distorting the market to this extent and making it harder for renewable energy technologies to compete. At the same time it is fossil fuels, not green levies, which are responsible for high fuel bills. Take dual fuel bills. Between 2004 and 2010 these rose by £455, of which £382 was due to soaring gas prices [2]."

The Green Party also point to the fact that promoting the South West of England to become a leader in renewable energy could ultimately reduce fuel bills and create an additional 34,000 jobs in the renewable energy sector [3].

Professor Scott Cato concluded:  

"The Green Party’s solution to high energy bills is to reduce demand for energy, particularly by improving the energy-efficiency of our homes, which is precisely the destination of some of the money from green levies. The party also takes inspiration from Germany's rapid move towards renewable generation, much of which is owned by local communities. This transition towards renewable energy ownership at community level is the best way of escaping the clutches of the fossil fuel energy giants and their ever rising fuel bills."


[1] ODI: Time to change the game, Executive Summary:

[2] Regen SW - Energy bills and green energy, the facts:

  • Green measures are responsible for £112 of the average £1287 family dual fuel bill.
  • Of this, £37 is down to renewable subsidy (£30 ROCs and £7 FiT) – less than three percent of the average bill.
  • £47 pounds goes to ECO and other energy saving measures that reduce bills for those in fuel poverty.
  • Fossil fuels are costing us dearly, between 2004 and 2010 dual fuel bills rose by £455, of which £382 was due to soaring gas prices
  • Globally subsidies for fossil fuels are $409 billion compared to $66 billion for renewable energy 
  • The annual government grant to the Nuclear Decommissioning Authority is £2.3 billion. Divide that by £26.3 million households and you find the average cost per household of dealing with nuclear waste is £87

[3] The South West Renewable Energy Manifesto, identifying the potential for the renewable energy sector in the South West:

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