Amid growing calls from climate campaigners and United Nations experts to reform fossil-fuel subsidies, new research by Oil Change International reveals that the U.S. government is still providing substantial financial support to fossil fuel companies. The study indicates that these subsidies, which amount to approximately $31 billion annually, have more than doubled since 2017. The funds come in the form of tax breaks, royalty reductions, and other financial incentives, many of which continue to benefit some of the world’s largest oil, gas, and coal companies.
Fossil Fuel Subsidy Increase Despite Climate Pledges
In 2021, President Joe Biden vowed to eliminate subsidies for fossil fuel companies as part of his broader commitment to tackling climate change. “Unlike previous administrations, I don’t think the federal government should give handouts to big oil,” Biden said following his inauguration. However, the latest study finds that the U.S. is moving in the opposite direction, particularly after the passage of the tax-and-spend bill in July 2025.
Former President Donald Trump’s signature tax reform bill, which was approved in 2025, is expected to hand the fossil fuel industry an additional $4 billion per year for the next decade. Among the largest incentives in the bill are expanded credits for carbon capture technology and a reduction in royalty rates for oil, gas, and coal production on public lands. According to experts, these enhanced supports could become even more valuable to the industry in later years.
Global Trends and U.S. Contradictions
Between 2015 and 2020, at least 53 countries around the world reformed or eliminated fossil fuel subsidies in response to pressure from climate experts and global campaigns. Despite these global shifts, the U.S. government’s continued support for the fossil fuel industry is seen as a major obstacle in the fight against climate change.
This new report from Oil Change International highlights the contradiction between U.S. promises to address climate change and the ongoing support for industries that contribute heavily to global warming. Environmental advocates argue that these subsidies not only incentivize the continued use of fossil fuels but also delay the transition to cleaner, renewable energy sources.
Implications for Climate Action
The continued financial support for the fossil fuel industry poses significant challenges to the U.S.’s decarbonization goals. These subsidies make fossil fuel production more profitable and viable, which undermines efforts to transition to renewable energy solutions.
Experts suggest that eliminating these subsidies could drastically reduce emissions and accelerate the shift towards sustainable energy. Redirecting these funds to renewable energy technologies and energy efficiency initiatives could support long-term environmental and economic stability.
Calls for Reform
With climate change becoming an increasingly urgent issue, experts are urging policymakers to reconsider the financial support for the fossil fuel industry. Advocates for climate action argue that eliminating these subsidies is essential to achieving the U.S.’s climate goals and fulfilling international commitments.
As the debate continues, the growing support for fossil fuel companies raises concerns about whether the U.S. is genuinely committed to tackling the climate crisis or simply maintaining the status quo for political and economic gain.
The U.S. government’s continued subsidies to the fossil fuel industry remain a significant barrier to achieving a sustainable, low-carbon future. The expansion of these subsidies under recent legislation further complicates efforts to address climate change and calls into question the government’s commitment to climate action.
By redirecting financial support away from fossil fuels and towards renewable energy, the U.S. can foster a more resilient economy, promote energy independence, and ultimately help mitigate the effects of climate change.
