Government Support and Policies For Fossil Fuel Production

Report by Chandra Bushan, Lucile Dufour, Lisa Fischer, Ipek Gençsü, Patrick Heller, Robin Hocquet, Natalie Jones, David Manley, Miquel Muñoz Cabré, Greg Muttitt, Angela Picciariello, Luma Ramos, Leo Roberts, Bronwen Tucker
Published on 28 October 2021


Governments have injected trillions of US dollars into the economy to respond to the consequences of the COVID-19 pandemic. Many governments have committed to using some of these funds to “build back better,” including through public investment in low-carbon development, high-quality clean energy jobs, and a just transition for all. However, the policies, investments, and measures adopted so far have yet to match up with this “build back better” commitment.

Key messages

  • Governments continue to commit more funds to fossil fuels than to clean energy through their COVID-19 recovery plans
  • Since the adoption of the Paris Agreement, public finance institutions have spent at least USD 294 billion supporting fossil fuels overseas
  • Major multilateral development banks (MDBs) and G20 countries have significantly decreased new international public finance for production since 2017. MDBs and G20 development finance institutions (DFIs) holding a total of over USD 2 trillion in assets have adopted policies that exclude fossil fuel production activities from future finance
  • Governments have an opportunity to reduce production through their leverage in state-owned companies, which control 50% of global oil and gas production and 55% of global coal production. However, current trends instead show an increase in government support for fossil fuel production and infrastructure
  • Seven of the 15 major fossil-fuel producing countries analysed in this report have made net-zero emissions pledges. At the same time, most still plan on increasing their oil and gas production until at least 2030, in contradiction with the global production declines needed to limit warming to 1.5°C or 2°C

Read full report

This chapter is in The Production Gap: 2021 report. This year’s report presents the first comprehensive update of the production gap analysis since our 2019 assessment. The report also tracks how governments worldwide are supporting fossil fuel production through their policies, investments, and other measures, as well as how some are beginning to discuss and enact policies towards a managed and equitable transition away from fossil fuel production. This year’s report features individual country profiles for 15 major fossil fuel-producing countries, and a special chapter on the role of transparency in helping to address the production gap.

Subscribe to our mailing list to get our latest updates