Ambassador Clare Kelly from New Zealand, who serves as the coordinator for the Fossil Fuel Subsidy Reform (FFSR) Initiative, provided insights into the outcomes of an informal planning meeting held in March. The meeting involved co-sponsors and focused on analyzing progress made in 2024 and formulating a work plan for 2025, concentrating on the initiative's three pillars.
Under the pillar of addressing harmful fossil fuel subsidies, several sessions have been organized to enhance understanding of various subsidy categories and facilitate shared experiences among members on effective reform strategies. A notable session, following initial discussions in 2024, aimed to explore the different types of production subsidies and their impact on the environment and trade.
In one of these sessions, the Asian Development Bank introduced its Energy Transition Mechanism, highlighting efforts to hasten the retirement of coal-fired power plants in the Asia-Pacific region. Carbon Tracker, an independent financial think tank, provided an assessment of how climate change affects capital markets and fossil fuel investments, identifying risks and new opportunities while suggesting pathways toward a low-carbon future. The non-governmental organization Beyond Fossil Fuels shared strategies concerning Europe’s transition away from coal.
Focusing on the pillar of enhanced transparency, the WTO Secretariat shared updates on the utilization of the Trade Policy Review Mechanism to heighten transparency regarding fossil fuel subsidies and their reform. During 2024, there were over 46 questions asked in 15 trade policy reviews, reflecting an increase in the information about this topic in TPRs. Efforts are ongoing to explore further engagement opportunities with stakeholders.
Co-sponsors expressed their support for the consistent inclusion of fossil fuel subsidy-related questions in the TPR process, emphasizing the importance of transparency and the need for comparable data among a broad range of WTO members.
In terms of the crisis support measures pillar, co-sponsors continued exchanging experiences about designing, adjusting, and phasing out temporary fossil fuel subsidies initiated in response to energy crises. Work on developing draft guidelines to ensure that these measures remain targeted, transparent, and temporary is also ongoing.
Additionally, the International Institute for Sustainable Development (IISD) presented its recent publication titled “Options for International Agreements on Fossil Fuel Subsidies."
Ambassador Kelly concluded by stating that the upcoming FFSR meeting scheduled for July 11, 2025, will maintain the focus on experience sharing and deepen discussions on fossil fuel subsidy categories per WTO member interests. She acknowledged the participants' involvement, encouraging ongoing collaboration leading up to the 14th Ministerial Conference (MC14) in Yaoundé, Cameroon, in March 2026.
The FFSR initiative aims to achieve reduction or elimination of detrimental fossil fuel subsidies through existing mechanisms or the creation of new reform pathways. It encourages WTO members to share information and experiences to advance WTO discussions.
More information about the FFSR initiative is available here.