The United States provides various subsidies to the fossil fuel industry, including profitable oil and gas companies. These subsidies come in different forms, such as tax breaks, direct funding, and implicit support.
According to the International Monetary Fund (IMF), in 2022, the U.S. provided approximately $3 billion in explicit subsidies to the fossil fuel industry. These subsidies include:
Implicit subsidies refer to the indirect costs associated with fossil fuel consumption, such as environmental degradation, health impacts, and climate change-related expenses. The IMF estimated that in 2022, implicit subsidies in the U.S. amounted to $754 billion, bringing the total support (explicit and implicit) to $757 billion.
While the IMF reports $3 billion in explicit subsidies, other organizations, considering a broader range of tax breaks and financial supports, estimate that U.S. direct subsidies to the fossil fuel industry are approximately $20 billion per year.
Subsidizing profitable oil and gas companies while regular Americans struggle with high energy costs and taxes is unjust. Redirecting these funds could support renewable energy initiatives and reduce national deficits.