COFFIS | Coalition on Phasing Out Fossil Fuel Incentives Including Subsidies
COFFIS is a coalition of 16 countries working to remove fossil fuel subsidies both collectively and through domestic action. The coalition is chaired by the Kingdom of the Netherlands. IISD hosts the secretariat.
In 2022, global fossil fuel subsidies reached a record USD 1.68 trillion before dropping to around 1.1 trillion in 2023—the second highest on record. This staggering amount of public funds creates a structural disadvantage for other energy sources and represents an enormous cost to taxpayers, squeezing government budgets.
Reforming subsidies can be challenging. Fossil fuel subsidies are often seen as important for national energy security and keeping down household living costs. However, fossil fuel subsidies are regressive fiscal policies that predominantly benefit the richest parts of the population who consume the most fossil fuels. Energy poverty can be more effectively addressed by other forms of more targeted support. Such policies are also less costly than blanket subsidies.
Policy transitions need to be carefully managed, taking into account
- support for lower-income households
- competitiveness of key industries
- national energy security
- budgetary discipline
- transparency and social dialogue.
Many global fossil fuel subsidies are tied up in the tax-free status of international aviation and shipping fuel. This puts alternative forms of transport at a competitive disadvantage and slows down the adoption of sustainable fuel alternatives. These global industries require both domestic and global solutions, which COFFIS members can work together to achieve.
All United Nations member governments have pledged to phase out inefficient fossil fuel subsidies under the Sustainable Development Goals and United Nations Framework Convention on Climate Change COP 26–28 outcomes. COFFIS members intend to lead by example by setting timelines for removing financial incentives to fossil fuel production and consumption and promoting a level playing field between industries.
The coalition was launched at COP 28 with a ministerial statement signed by Antigua and Barbuda, Austria, Belgium, Canada, Costa Rica, Denmark, Finland, France, Ireland, Luxembourg, the Netherlands, and Spain. It has since added four new members, including Colombia, New Zealand, Switzerland, and the United Kingdom.
Fossil fuel subsidies discourage the climate and energy transition and come at substantial costs for our societies.
