The Big Lie About Fossil Fuel Subsidies

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The IMF’s media release on fossil fuel subsidies is a big lie.

The International Monetary Fund (IMF) claimed that 2022 fossil fuel subsidies were $7 trillion in its IMF Fossil Fuel Subsidies Data: 2023 Update released last week. Although the report implied that much of this was not money given directly to fossil fuel companies, the explanation was confusing at best and misleading at worst.

That doesn’t really matter because its news release and ensuing media reports stated that $7 trillion was a gift to an industry that is destroying the planet.

Figure 1. IMF blog post, August 24, 2023. Source: IMF.

I do not want to defend the fossil fuel industry but the IMF’s message is opportunistic, political, journalistically dishonest and more appropriate to Fox News than to an international opinion leader and supposedly honest broker.

Only $1.3 trillion (23%) of $7 trillion in government fossil fuel support is really a subsidy—what the IMF calls “explicit” subsidies—and only $51 billion (4%) of that goes directly to support fossil fuel companies (Figure 2). $5.7 trillion (77%) are “externalities” for environmental damage & under-pricing—what the IMF calls “implicit” subsidies.

Figure 2. Only $1.3 trillion (23%) of $7 trillion in government fossil fuel support is really a subsidy and only $51 billion (4%) of that goes directly to support fossil fuel companies. $5.7 trillion (77%) are “externalities” for environmental damage & under-pricing. Source: IMF & Labyrinth Consulting Services, Inc.

The IMF news release shown in Figure 1 went on to say that

“Subsidies for oil, coal and natural gas are costing the equivalent of 7.1 percent of global gross domestic product. That’s more than governments spend annually on education (4.3 percent of global income) and about two thirds of what they spend on healthcare (10.9 percent).”

Figure 3 puts that hyperbolic statement in perspective. The 2022 $1.3 trillion “explicit” subsidy was 1.3% of world GDP. The $51 billion true subsidy to fossil fuel companies was 0.0001% of world GDP.

Figure 3. The 2022 $1.3 trillion “explicit” subsidy was 1.3% of world GDP. The total $7 trillion 2022 “subsidy” was 7.1% of world GDP. The $51 billion true subsidy to fossil fuel companies was 0.0001% of world GDP. Source: IMF & Labyrinth Consulting Services, Inc.

More detailed data for U.S. provides further clues about how subsidies are distributed. Renewable energy accounted for 53% of 2022 U.S. subsidies compared to 11% for fossil fuels (Figure 4). Energy conservation accounted for 34%.

Critically, 77% of all 2022 subsidies were in the form of tax credits.

Figure 4. Renewables accounted for 53% & conservation for 34% of 2022 U.S. energy subsidies Fossil fuel subsidies accounted for only 11% of total and 77% of all 2022 subsidies were tax credits. Source: EIA & Labyrinth Consulting Services, Inc. EIA Current/EIA Federal Financial Interventions and Subsidies in Energy in Fiscal Years 2016–2022_AUG 2023_DATA TABLES

This is quite a different picture than the IMF report and media headlines suggest.

There is little doubt that fossil fuels are the principal source of carbon emissions. Nor should we excuse the intentional efforts by companies to conceal early knowledge of these dangers from the public.

Neither should we excuse the IMF’s intentional effort to blame fossil fuel companies for subsidies that they do not receive. Ninety-six percent of the “explicit” subsidies in 2022 went to help consumers bear the strain of higher fossil fuel prices. Should they be criticized for taking money from education and healthcare as the IMF falsely implies that fossil fuel companies did?

Our global economy is more than 80% dependent of fossil fuels. All economic players for the last 200 years are accountable for that. The IMF report implies that fossil fuel companies are solely responsible for climate change when we’re all to blame for not only using their products but demanding them in ever greater volumes and at lower prices.

Lisi Krall recently observed in a podcast with Nate Hagens that,

“We have a system that’s been in play in various forms for 10,000 years…Fossil fuel did not create capitalism…We can’t manage to have the expansionary kind of [economic] dynamic that we have going on now without fossil fuels.”

Blaming fossil fuel companies for climate change is a childish form of behavior that does nothing to help clarify our present planetary predicament.

Art Berman is anything but your run-of-the-mill energy consultant. With a résumé boasting over 40 years as a petroleum geologist, he’s here to annihilate your preconceived notions and rearm you with unfiltered, data-backed takes on energy and its colossal role in the world's economic pulse. Learn more about Art here.

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  1. Peggy Sue Richards on September 22, 2023 at 4:02 pm

    So it’s the solution I’m interested in – not the accuracy of blaming. We are still looking for a solution I imagine so let’s focus on how that is going!

    • Art Berman on October 17, 2023 at 4:58 pm

      Peggy Sue,

      The solution is to use less energy as a society. That is not going to happen. All other purported “solutions” are false IMO.

      All the best,


    • Art Berman on October 17, 2023 at 5:03 pm

      Many thanks environMENTAL!

  2. environMENTAL on September 15, 2023 at 2:17 am

    Superb, Art.

  3. R Baird on September 7, 2023 at 7:37 pm

    “Fox News”. I’d say it was more likely to come from MSNBC News. Good points, though. Thanks for the update.

    • Art Berman on October 17, 2023 at 5:10 pm


      All news today is partisan. Fox abuses the privilege.

      All the best,


  4. Nick B Pollard on September 6, 2023 at 6:28 pm

    I have never considered the IMF an “honest broker” when it relates to climate change.

  5. EnergyAndEntropy on September 3, 2023 at 11:30 am

    It might be that the IMF embedded in the figures the cost of protecting oil fields worldwide – or locals would have a bigger share of their oil.

    In the last two weeks, Iraq has been stormed by the news of that – the US 5th Fleet is back in the Middle East – ready for business – worrying the already war-torn public – immensely.

    Fresh fighting around oil-rich fields has almost immediately erupted since – in what seems a new wave of – self-destruction.

    “In any system of energy, Control is what consumes energy the most.
    No energy store holds enough energy to extract an amount of energy equal to the total energy it stores.
    No system of energy can deliver sum useful energy in excess of the total energy put into constructing it.
    This universal truth applies to all systems.
    Energy, like time, flows from past to future” (2017).

  6. Robert lowrey on September 2, 2023 at 5:14 pm

    Hi Art, although I agree with your last statement, referring to fosssil-fuel finger pointing as childish is methinks accurate, it seem s it would be more helpful to simply accept the IMF figures and use them against the idiotic meme of suing Exxon because we burnt the oil they excavated (Exxon had no gun to our head forcing such use of their product). If a democratically-elected gov’t subsidizes a company to produce a product, it is the govt that is at fault, not the enterprise, n’est-ce pas?

    However, not having to pay for their externalities means that the citizens who got no dividends from the profits thus realized are on the hook, while the share-holders are paid dividends on what is basically a GSE. Corporate ability to slough off the cost of externalities onto the public is so rampant, implicit back-stopping so pervasive, that the USSA is basically a nation,not of independent Corporations, but GSE’s; without govt support, there would be no automobilie industry, e.g. I believe such cozy canoodling between the corporate & government spheres is what Mussolini termed Fascism.

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