TORONTO, Canada – As the world convenes at the United Nations Conference on Sustainable Development in Rio de Janeiro, Brazil, the Global Renewable Fuels Alliance (GRFA) reacted to an Oil Change International report that confirmed that the G20 promise to reduce crude oil subsidies is failing. According to the recently released report, no subsidies have been reduced as a result of the 2009 commitment made at the Pittsburgh G20 meeting.
Even by conservative estimates, oil subsidies are expected to more than double by 2020 from $312 billion in 2010 to $660 billion in 2020. At the Pittsburgh G20 meeting in September 2009, G20 leaders pledged to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” In their second “Phasing Out Fossil-Fuel Subsidies in the G20” report, released this month, Oil Change International has branded the G20’s efforts to do so, a failure.
“It is not surprising that the G20 has been unsuccessful in reducing fossil fuel subsidies when 9 months ago the IEA stated that oil subsidies were set to more than double in only a decade’s time,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance.
“The GRFA has repeatedly called on G20 leaders to shift their policy focus from subsidizing oil consumption towards developing biofuel – friendly policies that are proven to reduce our crippling reliance on fossil fuels. Currently, according to the Institute for Energy Research, oil subsidies completely dwarf any economic incentives to promote renewable fuels – this must change” stated Mr. Baker.
“The failure to reduce oil subsidies highlights the stranglehold oil companies have on our domestic energy policies. The G20 needs to do more to eliminate these staggering subsidies to the wealthiest industry on the planet,” added Mr. Baker
According to the recent report, one of the key factors in this failure is the practice of G20 nations changing their subsidy definitions and not their subsidy policies.
“It is discouraging that the G20 are using bureaucratic loopholes to sidestep their own commitment to reduce the billions of dollars given to big oil companies,” said Bliss Baker.
Self-reporting of subsidies is also failing. Countries have failed to report on their level of subsidies, making them invisible to the outside world. This lack of transparency and exploitation of bureaucratic loopholes has resulted in no subsidies being eliminated as a result of the 2009 G20 commitment.
“The world has an opportunity this week at Rio+20 to address the failure of the G20 and ensure that we make real progress in reducing subsidies and encourage the development of real alternatives to crude oil, such as biofuels,” concluded Mr. Baker.
The Global Renewable Fuels Alliance is a non-profit organization dedicated to promoting biofuel friendly policies internationally. Alliance members represent over 65% of the global biofuels production from 44 countries. Through the development of new technologies and best practices, the Alliance members are committed to producing renewable fuels with the smallest possible footprint.