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Phasing out Environmentally Harmful Subsidies

Examples of EHS by category and the EHS inventory

Examples of potentially environmentally harmful subsidies are provided here by four broad subsidy categories. Determining whether the subsidies are indeed environmentally harmful requires consideration on a case-by-case basis. The EHS have been categorised by Member State, type of subsidy, economic sector, type of environmental impacts and relevant Sustainable Development Goals, type and magnitude of budget impacts, category of beneficiaries and other interested parties.

Phasing out environmentally harmful subsidies in EU Member States

Current state of play

As part of the 8th Environment Action Programme (EAP), it was agreed to look further at environmentally harmful subsidies. In particular, complementing ongoing work on fossil fuel subsidies, it was agreed that a methodology should be developed in consultation with Member States, in 2023, to identify other environmentally harmful subsidies. This will allow Member States to identify these other environmentally harmful subsidies and report them regularly to the Commission, allowing for a Commission report on the level and type of such subsidies in the Union, and on progress made on phasing them out. Work is ongoing to develop this methodology, and is set out under the Expert Group (link to Register of Commission expert groups and other similar entities (

This methodology is also relevant for reporting under the Kunming-Montreal Global Biodiversity Framework (GBF) agreed at the 15th Conference of the Parties to the Convention for Biological Diversity (CBD COP15) includes Target 18 [1] to:

Identify by 2025, and eliminate, phase out or reform incentives, including subsidies, harmful for biodiversity, in a proportionate, just, fair, effective and equitable way, while substantially and progressively reducing them by at least 500 billion United States dollars per year by 2030, starting with the most harmful incentives, and scale up positive incentives for the conservation and sustainable use of biodiversity.”

Any subsidy harmful to the environment is ultimately also harmful to biodiversity. For example, a fossil fuel subsidy would impact on biodiversity.


[1] Target 18 ( This CBD Target 18 is underpinned by OECD analysis and methodologies that are reflected in this Guidance.

More information

You can read more about the reform of EHS in the final report and the country case studies and factsheets compilation: 

A toolbox for reforming environmentally harmful subsidies in Europe

Country case studies and candidates for reform factsheets

Reporting on Fossil Fuel Subsidies takes place every year, see the “2023 Report on Energy Subsidies in the EU”  EUR-Lex - 52023DC0651 - EN - EUR-Lex (

Many international organisations have produced guidance material for the identification and assessment of EHS.