IS FOSSIL FUEL
SUBSIDISED OR NOT?

Recent news on energy

“Wind power still gets lower public subsidies than fossil fuel tax breaks"

"Financial support for renewable energy under attack as gas, oil and coal still subsidised to far greater extent, new data shows”

This claim has gained credence to the extent that it is common to hear or read staements to the effect that “All types of energy are subsidised and coal gets more than wind".

Stuart Young Consulting Ltd was engaged by Communities Against Turbines Scotland (CATS) to examine the source and validity of the claim, which referred to an alleged subsidy for fossil fuels of £3.63 billion in 2010.

Executive Summary: the conclusions

Gas, oil and coal prices were NOT subsidised by £3.63bn in 2010.

The claim in the Guardian article has no substance or merit. It is disingenuous, totally misleading and is predicated upon a highly inventive and dubious notion of “subsidy”.

The £3.63bn “fossil fuel tax breaks” referred to in the article turn out to be an imaginary relief on a level of taxation on domestic fuel which never has and almost certainly never will be levied.

On the other hand, the £0.7bn subsidy to wind with which it was compared is indeed a true subsidy to assist an unreliable technology which is likely to rise to at least £1.06bn for 2012, and to which a further £0.72bn subsidy to other Renewables and an unknown sum for Feed-In Tariffs need to be added.

(VAT on energy, both renewables and fossil fuel, is levied at 5% instead of 20%. The Guardian was alleging that this amounts to a 15% subsidy - Ed. )


AW adds: "Some people use figures rather like a drunk uses a lamp-post, for support not illumination".

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