Members discuss new approaches, share experiences on reforming fossil fuel subsidies

New Zealand, the coordinator of the FFSR initiative, took stock of the progress made over the past two years across the three pillars of the FFSR work programme identified at the last Ministerial Conference (MC13) in 2024. These include enhancing transparency through the continued Trade Policy Review exercise, sharing tools and methods on effectively scaling down crisis-support measures, and addressing the most harmful fossil fuel subsidies with a view to developing reform guidelines. The coordinator stressed the need to continue sharing insights on pathways to reform, in particular regarding subsidies that are provided to emissions-intensive sectors.

Colombia shared its national experience in structurally reducing public funding for fossil fuels through gradual steps while maintaining macroeconomic stability and fiscal sustainability. The country has also introduced multiple policy incentives to help industries and the public transition from fossil fuels to clean energy. Colombia reported measurable fiscal savings and a substantial reduction in structural imbalances.

The Netherlands - on behalf of the European Union - and Colombia outlined preparations for the upcoming "First Conference on Transitioning Away from Fossil Fuels," scheduled for 24-29 April 2026 in Santa Marta, Colombia. The conference aims to mobilize high-level engagement and accelerate the implementation of existing multilateral efforts on fossil fuel subsidy reform, including the FFSR initiative at the WTO. It will bring together public and private sector actors, think tanks and NGOs to identify "enabling pathways" for fossil fuel subsidy reform, providing practical options on policy, finance incentives and cooperation that can be implemented to advance the energy transition.

Vanuatu made a statement on the new International Court of Justice (ICJ)'s Advisory Opinion on "Obligations of States in respect of Climate Change", focusing on the fossil fuel subsidy reform aspects of the ICJ Opinion.  Vanuatu argued that fossil fuel subsidies not only distort markets, but also drive emissions, raising serious legal and moral concerns, particularly for vulnerable states facing existential climate impacts such as rises in sea level and intensifying storms. It called on WTO members to commit to a rapid, transparent and equitable phase-out of fossil fuel subsidies.

The International Institute for Sustainable Development (IISD) presented its study on how G20 countries can best implement the proposed framework to successfully phase out fossil fuel subsidies. The framework calls for time-bound national phase-out plans that categorize subsidies into quick removals, strategically sequenced reforms, and limited exemptions for narrowly targeted sectors, helping governments move from pledges to practical action. Studies of selected G20 countries show that a sequencing approach with tailored timelines can effectively deliver on reform commitments.

The WTO Secretariat provided an updated analytical overview of fossil fuel subsidies in high-emitting, energy-intensive sectors to support discussions under the FFSR initiative, in line with the MC13 Ministerial Statement on fossil fuel subsidies. The paper compiles existing studies (such as those by the Organisation for Economic Co-operation and Development and Eunomia) to examine how subsidies benefit high-emitting sectors - particularly steel, aluminium, cement, chemicals and plastics - and assesses their trade and environmental impacts. The negative spillovers highlighted include overcapacity, market distortions, and reduced incentives for the green transition.

New Zealand thanked members and stakeholders for the rich discussion. Looking ahead, it noted that the co-sponsors of the FFSR initiative are finalizing preparations for the upcoming 14th Ministerial Conference in March in Cameroon, with a ministerial statement and selected deliverables under consideration.

More information

The FFSR initiative seeks to achieve the rationalization, phasing-out or elimination of harmful fossil fuel subsidies through the use of existing mechanisms or the development of new pathways to reform. It encourages WTO members to share information and experiences to advance discussions at the WTO. Forty-eight members are currently participating in the initiative as co-sponsors.

More information about the FFSR initiative is available here.