A monthly update on policy development, campaigning and communications

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A monthly update on policy development, campaigning and communications by CAN Europe - Newsletter No.3 - November 2016 (for browser version, click here)

COP22 and the avenues to kick fossil fuels out of financing


Just before COP22 kicked off last week, CAN Europe and ODI crafted a briefing that provides countries with a clear idea of how the Paris Agreement sets down pathways to phase out fossil fuel subsidies. Moving beyond the usual parameters of providing and mobilising climate finance, the Paris Agreement contains an overarching objective to make financial flows consistent with low greenhouse gas and climate resilient development. This objective brings in a new paradigm to the role of finance in the UN climate discussions; we understand it as an eventual end to any and all financial support for fossil fuels, including subsidies in all their forms.

Building on that objective, there are a number of other avenues in the Paris Agreement for removing subsidies to fossil fuels. Our briefing sets out to show those avenues and recommend how governments can effectively use them to pursue phase out of fossil fuel subsidies. The key messages and recommendations are set out below:

  • Ensure that global financial systems and flows (including those driven by government subsidies) work towards climate action and not against it.

  • Include fossil fuel subsidy reform, and other fiscal policy tools, such as carbon pricing, in Nationally Determined Contributions (NDCs).

  • Use the 2018 Facilitative Dialogue to integrate coherent fiscal policies and decisions which will strengthen countries’ Intended Nationally Determined Contributions and increase their greenhouse gas emission reductions.

  • Use the development of the Transparency Framework under the Paris Agreement to guarantee that climate finance is not used to support the production and consumption of fossil fuels, and instead is fully directed towards enhanced low-carbon and climate resilient development, including through supporting efforts to phase out fossil fuel subsidies.

  • Include reporting on fossil fuel subsidies and tracking of progress in phasing out fossil fuel subsidies as part of national communications and provide clear and understandable information to the public regarding the scope and scale of fossil fuel subsidies and efforts to address them.

  • Use the global stock-take as an opportunity to re-visit and increase mitigation ambitions, including through phasing out of fossil fuel subsidies.

Looking at all the opportunities laid out, it is clear that the Paris Agreement can be a concrete framework for action on subsidies. Countries should look to their international commitments as an impetus to phase out harmful fossil fuel subsidies and pursue a sustainable transition to clean and low carbon energy systems.

As discussions continue at COP22 in Marrakech, countries are digging into the details surrounding the rules and implementation plans of the Paris Agreement. But these discussions take place with the backdrop of a collective understanding that the national climate plans currently on the table will not limit global temperature rise to well below 2°C. More speedy and effective action is needed, and that is where the removal of subsidies can make a positive difference. It will be essential that the discussions capture how countries can phase out fossil fuel subsidies and reflect their efforts within the broader scope of the Paris Agreement.

Looking towards the coming years where action becomes more concrete, we anticipate that finance will start playing a much more constructive role, starting with the removal of fossil fuel subsidies.

To view the briefing, click on the image:

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The leaked draft proposal of the regulation on the Electricity Market design would further allow subsidizing coal power stations through the so called capacity mechanisms. And the regulation got leaked just the same day as Climate Analytics' new report was launched in Marrakesh pointing out that, to reach 1.5C, OECD countries need to phase out coal by 2030 at the latest.

State aid: Commission approves revised French market-wide capacity mechanism

- The Commission en direct October edition's dossier takes a look at the EU Budget Focused on Results initiative, and how it is shaking up the spending culture in the Commission.


- Germany: The German Climate Plan 2050, its long-term road-map to achieve 80%-95% GHG reduction by the middle of the century, was adopted on November 14th. The plan mentions abolishing environmentally harmful subsidies and developing a more climate friendly tax system. However, it does not propose any concrete measures or targets in this regard. It is therefor even more important that Germany puts in its full weight during its upcoming G20 chair next year to get an ultimate agreement on a date and conditions of the G20's fossil fuel subsidies phase out.

- Spain: The Government authorizes new aid for domestic coal

- Nordic Council of Ministers: ‘Learning from Leaders: Nordic and International Best Practice on Fossil Fuel Subsidy Reform’



- Politico: How to spend it, EU-style: Brussels may get better at helping countries share the wealth, but will people see the benefit?

- Euractiv: European Parliament demands EU budget reform

- Euractiv: A budget that connects citizens with the EU


On the bright side...

- France 24: UN chief calls for 'elimination' of fossil fuel subsidies

- bne IntelliNews: Czech Export Bank baulks at backing Skoda Praha's Montenegrin contract

- Irish Examiner: 'Climate advisors urge wind farm builds

- TornosNews: VAT hike comes into effect on Greek islands and mainland on Wednesday

... but on the downside...

- Reuters: France to drop carbon tax plan: Les Echos

- Guardian: Greece set to win €1.75bn from EU climate scheme to build two coal plants

- Climate Home: Bosnia faces legal action over Chinese-backed coal dash

- Natural Gas World: EBRD Funds Polish Plant Conversion

- Carbon Capture Journal: Synthetic Fossil Fuels – backdoor subsidies, climate on the backburner

- Huffington Post (op-ed): Turkey: Notes from a state of (climatic) emergency 

... and some additional developments

- Automotive News Europe: France will end diesel-gasoline tax gap for companies' car fleets

- Romania-Insider: Environment tax to be replaced with tax on fuel consumption in Romania

- Hortidaily: European Commission approves German support to cogenerated electricity



- Oil Change International,, Greenpeace, the Center for Biological Diversity and many others:
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On Monday, November 14th, people from around the world joined together to take action at the UN climate talks in Marrakech. They delivered a letter signed by over 375 organizations calling for an end to new fossil fuel development. Additional information on the action can be found on Twitter: #ZeroFossil, #COP22, #KeepItInTheGround, @PriceofOil, @350, @Greenpeace, @CenterForBioDiv.

- Friends of the Earth Europe: Winter package plays Russian roulette with climate

- CEE Bankwatch: Historic win for frontline communities: plans for coal power project in Turkey shelved

- Platform London: New UK Oil Drilling Round Could Bust Us Through Climate Limits & Subsidising spills – British public pays BP $300 million to drill and spill

- Legambiente: Green finance to revive Italy

- Green Budget Europe: presentations from the ‘17th Global Conference on Environmental Taxation'


(to open a report, click on the related image)

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Pathway to Reform: Events on Fossil Fuel Subsidy Reform at CoP 22, Marrakech

- 21-22/11, Brussels: Meetings of the Energy and Managing Authorities Network

- 30/11-2/12, Bratislava: SET Plan 2016 - Central European Energy' Conferencemore info

- 1/12, Brussels: State aid in the management of the ESI Funds: Thematic seminars - State aid in Transport

- 5/12, Bruxelles: Just Transition: Conference organised by the Delegation DIE LINKE. in the European Parliament and the Rosa-Luxemburg-Stiftung Brussels, in cooperation with Transform!

Click on the calendar image to view events and add them to your calendar:

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The voice against fossil fuel subsidies has internationally grown stronger the last couple of years - both among civil society and world leaders - but it is apparent that European decision makers don’t feel enough pressure to start putting their money where their mouth is. A united voice from NGOs and other actors will help to steer the debate in the right direction – towards enhanced and fair climate action.  CAN Europe is working with members and non-members across Europe to support the development of a strong, common narrative on phasing out public financial support for fossil fuels. What is your story? Make it heard! Contact: Caroline Westblom




Have any news you want to share or comments on the content ? Contact: Martin O'Brien

For continual news updates and useful resources, visit our website.



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