Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what definition of a (a) fossil fuel incentive and (b) fossil fuel subsidy her Department applies for the purposes of implementing the UK’s commitments under the Coalition on Phasing Out Fossil Fuel Incentives Including Subsidies.

The UK uses the International Energy Agency’s price-gap approach to define fossil fuel subsidies. Under this approach, a fossil fuel subsidy is a government measure or programme that reduces the effective cost of fossil fuels to consumers below world market prices, including transport, refining and distribution costs, or reduces the costs or increases the revenues of fossil-fuel producing companies.

The UK’s inventory goes beyond this definition in the interests of transparency, including relevant tax reliefs and other wider support measures that may incentivise the production or consumption of fossil fuels.