A new policy paper, A framework for the phase-out of fossil fuel subsidies in the European Union, by Stop Fossil Subsidies, ClientEarth and CAN Europe, sets out how the European Union can finally phase out fossil fuel subsidies through binding law, ahead of the Commission’s planned Q4 2026 revision of the Climate and Energy Governance framework.
Despite repeated EU, G20 and COP commitments, fossil fuel subsidies remain widespread across the Union. Latest EU data show that nearly half of all fossil fuel subsidies — over €50 billion annually — have no planned end date. Member State reporting is inconsistent, definitions are fragmented, and existing governance tools lack enforcement.
The paper is addressed to the European Commission, arguing that fossil fuel subsidy reform is no longer optional. It is a legal, fiscal and governance obligation. The July 2025 Advisory Opinion of the International Court of Justice confirms that continued public support for fossil fuels risks breaching states’ duties to prevent climate harm. At EU level, the 8th Environmental Action Programme already mandates a binding framework to phase out fossil fuel subsidies in line with the 1.5°C objective.
“The EU has spent over a decade repeating the same promises while allowing to pour public money into fossil fuels,” said Paolo Destilo, spokesperson for Stop Fossil Subsidies. “This is not a lack of ambition. It is a failure of governance. Without binding rules, clear definitions and enforcement, Member States will keep delaying.”
The paper identifies systemic weaknesses in the current framework, including National Energy and Climate Plans, the European Semester, State aid control and the stalled revision of the Energy Taxation Directive. It proposes an integrated legislative package to close these gaps.
“Fossil fuel subsidies distort markets, lock in dependence on volatile imports, and slow down clean industrial investment,” Destilo added. “Phasing them out is one of the fastest ways to free public money for energy security, competitiveness and a just transition.”
Download the paper here.
