Fossil Fuel Subsidy Reform Initiative focuses on key areas of 2025 workplan

Ambassador Clare Kelly of New Zealand, coordinator of the FFSR Initiative, briefed participants on the outcomes of an informal planning meeting of co-sponsors in March, which had taken stock of progress made in 2024 and developed a plan to guide work across the three pillars in 2025.

Under the third pillar — “identifying and addressing harmful fossil fuel subsidies” — dedicated sessions have been planned to deepen understanding of specific subsidy categories and to facilitate experience-sharing among members on practical reform pathways. In that context, one of the dedicated sessions, which followed on from an initial discussion in 2024, aimed to further examine the different types of production subsidies in order to explore their environmental and trade impacts.

As part of this dedicated session, the Asian Development Bank presented its Energy Transition Mechanism and outlined efforts to support the accelerated retirement of coal-fired power plants in the Asia-Pacific region. Carbon Tracker, an independent financial think tank, provided an analysis of the impact of climate change on capital markets and fossil fuel investments and highlighted the risks and opportunities, as well as the potential pathways toward a low-carbon future. The non-governmental organization Beyond Fossil Fuels shared insights on Europe’s coal exit strategies.

Under the first pillar — “enhanced transparency” — the WTO Secretariat provided an update on efforts to use the Trade Policy Review Mechanism to increase transparency with regard to fossil fuel subsidies and their reform, having documented an increase in questions about fossil fuel subsidies and their reform during 2024, with more than 46 questions asked during 15 trade policy reviews (TPRs). This clearly led to an increase in the extent of information being provided on this topic in TPRs. Additional WTO avenues for further stakeholder engagement are also being explored.

Co-sponsors expressed support for the systematic inclusion of fossil fuel subsidy–related questions in the TPR process. They emphasized the value of transparency and of collecting a fuller and more comparable information base across a broader group of WTO members.

Under the second pillar — “crisis support measures” — co-sponsors continued to share experiences concerning the design, adjustment and phase-out of temporary fossil fuel subsidies introduced in response to recent energy crises. Co-sponsors also continued to develop draft guidelines aimed at ensuring that such measures remain targeted, transparent and temporary.

In addition to this work, the International Institute for Sustainable Development (IISD) presented a recent publication titled “Options for International Agreements on Fossil Fuel Subsidies”.

In concluding, Ambassador Kelly noted that the next FFSR meeting, scheduled for 11 July 2025, will continue to facilitate experience-sharing and to deepen discussions on other categories of fossil fuel subsidies, in line with WTO members’ interests. She thanked participants for their engagement and encouraged continued collaboration in the lead-up to the 14th Ministerial Conference (MC14), to be held in Yaoundé, Cameroon, in March 2026.

The FFSR initiative seeks to achieve the rationalization, phasing-out or elimination of harmful fossil fuel subsidies through the use of existing mechanisms or the development of new pathways to reform, and encourages WTO members to share information and experiences to advance discussions at the WTO. More information about the FFSR initiative is available here.