Spokesman Joost Thus: “The A12 blockades have ensured that the injustice of fossil subsidies is clear to everyone. 72% of Dutch people want to get rid of fossil subsidies [1] and more than three quarters of the Second Last October, the House voted in favor of a motion on phase-out plans. The success of the A12 blockades has set in motion an international movement. An international coalition of 25 movements from 14 countries will fight at EU level for an end to fossil subsidies. This week there are Stop Fossil Subsidies actions in 6 European countries. It will be announced on Saturday on the A12 how we will increase the international pressure on politics and the fossil industry in the near future.”
Phasing-out plans for the outgoing cabinet The outgoing cabinet presented the phasing-out plans for fossil subsidies in February. The abolition of fossil subsidies is postponed again until 2030 or even 2035. Moreover, the outgoing government states that phasing out a large part of fossil subsidies is difficult due to international agreements. But this goes directly against the international agreements that the Netherlands made at the G20 in 2009 (!) to phase out fossil subsidies before 2020.
Need to abolish fossil subsidies Fossil subsidies stimulate the large-scale consumption of fossil fuels. Companies such as Shell, Tata Steel and KLM receive huge discounts on the use of oil, gas and coal in the Netherlands. In total, this amounts to between 39.7 and 46.4 billion euros per year in the Netherlands alone. Globally, the IMF reserves an amount of $7 trillion for 2022 [2]. In this way, the use of energy sources whose emissions drive the climate and ecological crisis is supported and stimulated. While this crisis endangers the lives of millions of people, animals and ecosystems.
Greta Thunberg was detained by police in The Hague along with other climate protesters. Photograph: Peter Dejong/AP
Greta Thunberg was detained by police at a demonstration in The Hague, in the Netherlands.
The climate activist was put in a bus by local police along with other protesters who tried to block a major highway into the city on Saturday.
Thunberg had joined a protest by hundreds of activists and was detained when she joined a group of about 100 people who tried to block the A12 highway.
Before she was detained, Thunberg said: “We are in a planetary emergency and we are not going to stand by and let people lose their lives and livelihood and be forced to become climate refugees when we can do something.”
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The Extinction Rebellion campaign group said before the demonstration that the activists would block a main highway into The Hague, but a heavy police presence, including officers on horseback, initially prevented the activists from getting on to the road.
A small group of people managed to sit down on another road and were detained after ignoring police orders to leave.
Extinction Rebellion activists have blocked the highway that runs past the temporary home of the Dutch parliament more than 30 times to protest against subsidies.
The demonstrators waved flags and chanted: “We are unstoppable, another world is possible.”
The Guardian article didn’t make clear that Dutch Extinction Rebellion is continuing it’s campaign against huge fossil fuel subsidies by the Dutch government that support the fossil fuel industry.
The Trans Mountain project would not have been possible without considerable direct federal government financial support. Credit: Adam Jones/Flickr(CC BY 2.0 DEED)
A new Environmental Defence analysis reveals that despite government promises to cut, the amount of taxpayers’ money given to the industry remains high.
Last year was one of the worst on record for climate change-related disasters, yet Canada’s federal government spent $18.6 billion supporting the fossil fuel and petrochemical industry.
A new report by the nonprofit Environmental Defence indicates that, despite record profits for the fossil fuel industry and Canadian claims to eliminate subsidies, the government of Justin Trudeau continues to spend massive quantities of public money supporting the primary cause of climate change.
“As people across Canada faced a fossil fuel affordability crisis, and climate disasters continued to ravage the country and the world, the government of Canada continued providing financial support to an industry that we need to be winding down in order to avoid catastrophic levels of warming,” Julia Levin, associate director of National Climate at Environmental Defence told DeSmog.
“Taxpayer handouts to Canada’s wealthiest companies means that less money is available for the types of investments that could actually help people across the country who are deciding between food and energy bills,” she said.
To put that in context, Environmental Defence’s “Canada’s Fossil Fuel Funding in 2023” report estimates that the Canadian government’s accumulated subsidies to the oil and gas sector over the last four years was at least $65 billion.
“That level of support could have fully funded every major wind and solar project in Canada from 2019 to 2021 12 times over,” said Levin. “It is 10 times what the government has invested in climate change adaptation since 2015. Around half of that, $35 billion, is enough to double transit ridership across the country over the next 12 years.”
The report identified specific subsidies including loan guarantees of $8 billion for the Trans Mountain Expansion pipeline (TMX), and $7.3 billion in public financing through Crown corporation Export Development Canada. The report also noted over $1.3 billion in subsidies for carbon capture and storage projects, and approximately $1.8 billion in tax breaks for the oil and gas and related sectors.
The Trans Mountain project, controversially acquired by the Trudeau government early in 2018, would not have been possible without considerable direct federal government financial support. Initially estimated to cost $5.4 billion to complete, the most recent cost estimates are $34 billion. In addition to the added climate risk of a new pipeline exporting Canadian oil, with an anticipated drop in the global demand for oil, the project remains a substantial financial risk—one of the reasons Kinder Morgan abandoned it in the first place. The pipeline has been called a ‘global warming machine.’
Major Cost to Society
Environmental Defence’s report further notes the oil and gas sectors’ cost to society — in terms of air pollution, climate change-related natural disasters, and/or extreme weather — is estimated at $52 billion for 2023 alone.
Environmental Defence has been tracking the Canadian government’s subsidies to the oil and gas sector for several years, and as Levin explained in an interview with DeSmog, the organization has noticed certain trends.
“With the exception of 2020 as a COVID year, federal support to the oil and gas industry has been consistently around $18 to 20 billion in recent years,” she said. “We are seeing an increase in subsidies for carbon capture, and we know these are set to rise as the CCUS [Carbon Capture, Utilization, and Storage] investment tax credit gets finalized.”
Carbon capture and storage is the oil and gas industry’s preferred solution to addressing climate change, and the Canadian and American federal governments have heavily subsidized the technology. Critics warn that, rather than lowering emissions, carbon capture is emissions intensive and will be used to increase oil production through a technique called “enhanced oil recovery.” As previously reported by DeSmog, federal and provincial governments in Canada are preparing to spend billions in carbon capture subsidies.
Similarly, so-called blue hydrogen (hydrogen derived from natural gas using carbon capture) is also a costly, carbon- and resource-intensive false solution promoted by industry and government alike.
Levin called carbon capture and hydrogen “dangerous distractions.”
“The government of Canada is finalizing a carbon capture investment tax credit as well as a hydrogen investment tax credit,” Levin pointed out. “Recent budget analysis from the Parliamentary Budget Office estimates that these two tax credits will collectively provide over $11 billion to carbon capture and hydrogen projects by 2028.”
“Despite 50 years of investment, carbon capture has never worked as promised,” said Levin.
Delaying Clean Energy Transition
“Most projects never make it off the ground; the few that do fail to deliver the promised emissions reductions,” she said. “Oil and gas companies know this is a dead-end technology that won’t make a dent in emissions but they are promoting it to delay the clean energy transition and wring out even more subsidies.”
Levin noted that hydrogen is also being used by oil and gas companies to justify continued, and even expanded, fossil fuel production.
The government’s misuse of public money isn’t limited to unproven technologies masquerading as climate change solutions. Environmental Defence’s report reveals that the same funds could have been used for new green energy projects and the development of public transit infrastructure, and could also have taken a bite out of Canada’s affordability crisis.
“At a time when Canadians are dealing with a cost of living crisis, that level of funding could have retrofitted millions of homes to make them more energy efficient, therefore reducing energy bills,” Levin said. “It could have been used to reduce Canadians’ dependence on fossil fuels by switching our cars, furnaces, and stoves to electric options, which shields households from the inflationary pressures caused by fluctuating oil prices.”
Levin notes that there are other types of subsidies that Environmental Defence did not include in their inventory.
“The climate pollution created by oil and gas companies has massive costs, including health costs, property damage from extreme weather events, and decreased agricultural productivity due to changing weather patterns,” she said.
The report also found that oil and gas companies get considerable breaks on carbon pricing, which forms yet another kind of subsidy.
Canada’s continued subsidies to the fossil fuel sector defy explanation in this era of climate change. But they also contradict the government’s official messaging on fighting global warming, and the Canadian public’s expectations of their government.
“Ending fossil fuel subsidies should be the low hanging-fruit of climate policy,” said Levin. “It’s painfully obvious that when you’re in a hole, the first thing you do is stop digging.”
While the government has promised to end funding to the fossil fuel industry, far more action is needed, Levin believes.
“Finance Minister Chrystia Freeland must use Budget 2024 to announce the immediate steps the government is taking to eliminate all of its financing to the oil and gas industry, as was promised back in 2021,” said Levin.
“Rather than subsidizing fossils we should be taxing their massive profits – and investing the revenues into clean energy measures that will benefit Canadians.”
Rishi Sunak offers huge fossil fuel subsidies to develop fossil fuel extraction in UK.
Rishi Sunak awards a huge tax break to further destroy the climate.
It’s called a windfall tax – it’s a further windfall for fossil fuel companies on top of their windfall of higher prices following the invasion of Ukraine.
Back in May 2022, the UK government announced the energy profits levy, as a response to the growing pressure for a ‘windfall tax’ on the massive profits being generated by companies pumping oil and gas in the North Sea. These profits were fuelled by skyrocketing fossil fuel prices in the wake of the Russian invasion of Ukraine. The levy raised the effective rate of corporation tax paid on oil and gas profits from 40% to 65%, and again to 75% in November 2022.
But, it came with a caveat. Despite the UK’s urgent need to kick its addiction to expensive fossil fuels, this government didn’t want to discourage investment in more oil and gas extraction. So they included a tax loophole to ensure that companies investing in new projects to pump fossil fuels out from under the North Sea would see their tax relief (already generous by most standards) rise to 91%. In other words, fossil fuel companies could deduct 91% of their capital investment costs from their corporation tax bill. The ‘windfall tax’ may have, on the surface, attempted to tackle the grotesque profits being raked in by massive companies in the midst of the cost of living crisis – but it also made it cheaper for these companies to extract the fossil fuels contributing to the sky-high cost of living in the first place.
At NEF, we analysed last week’s new OBR data, and found that the loophole included in the energy profits levy has massively increased the amount of tax relief which fossil fuel companies will potentially receive. We estimate that oil and gas extractors could receive up to £18.1bn in tax relief between 2023 and 2026. That’s a massive increase of £10.5bn, or 136%, from the £7.6bn they were expected to receive before the energy crisis. This is an enormous amount of lost revenue that could go to the government to be spent on lowering our energy bills or improving our public services. The OBR expects the UK oil and gas industry to pay £24.3bn in tax between 2024 and 2027, meaning that closing the tax loophole in the energy profits levy could almost double the amount of tax revenue our government could receive – and the businesses in question would still walk away with billions.
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Even if you accept the government’s warped logic, which seeks to encourage greater North Sea extraction, the policy appears to be failing. While total potential for tax relief has risen by £10.5bn, total forecast investment has risen by just £3.4bn. This would represent an abysmal return on a government tax measure. Relief has largely been extended to investments which were expected to occur anyway, suggesting the policy is (intentionally or not) little more than a vehicle for oil and gas companies to keep most of their explosive profit growth, while the windfall tax sustains an illusion of fairness.
The energy profits levy helped pay for the government’s emergency cost of living support measures – in theory. But our energy bills remain extortionate, costing 50% more than they did in early 2022, prior to the Russian invasion of Ukraine. With the poorest households over £200 a week short of the amount they need for an acceptable standard of living, this government has still not provided enough support. Looking forward, removing the perverse tax reliefs extended to the oil and gas industry could free up almost £13bn of tax revenue between 2024 and 2026: enough to give every household in the country three £150 annual payments to help cover their energy costs.
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It’s reasonable to compare the so-called windfall tax to Norway’s windfall tax since they are both taxing fossil fuel activities in the North Sea. The Uk’s Labour party has repeatedly said that it intends to impose a “proper windfall tax”. There was further brief mentions of this during the Labour Party’s reformulation and massive restriction of it’s green policies yesterday 8th February 2024 but it remains unclear what is intended.
What’s obviously clear is that Norway’s windfall tax has made and continues to raise huge sums for Norway. There is still a disguised fossil fuel subsidy for exploration and extraction – from what I can see it appears to be 78%. That’s a long way from Sunak’s 91% and since we’re dealing with vast sums of money, 91 – 78 = 13% of vast sums of money is still vast sums of money (as any Chancellor should realise).
Investment in an offshore operating asset in Year 1 is 100.
In the ordinary tax base (22%), 100 must be capitalized and depreciated linearly over 6 years. The depreciation in Year 1 is 100 / 6 = 16.7, i.e., a deduction of 16.7. This results in a tax amount in Year 1 of -16.7 * 22% = -3.7.
In the special tax base (56%), the entire amount of 100 can be deducted directly. The special tax base will therefore initially be -100. However, we must deduct the tax amount from the ordinary tax base of -3.7 from the -100. The special tax base will thus be -100 – (-3.7) = -96.3. To calculate the special tax amount, we must use the technical special tax rate of 71.8%. The special tax will thus be -96.3 * 71.8% = -69.3.
Hence, total tax on the investment of 100 in the offshore operating asset in Year 1 is
-3.7 + (-69.3) = -73, i.e., a tax deduction of 73.
In Years 2 – 6, the linear depreciation continues in the ordinary tax base. For each of these years, the tax on the investment of 100 in Year 1 is thus -3.7 in the ordinary tax base. At the same time, this tax is treated as “income” in the calculation of special tax, as the amount must be deducted in the special tax base. The special tax will thus be 3.7 * 71.8 = 2.7 in each of the years. Total tax per year will therefore be -3.7 + 2.7 = -1.
Looking at the entire period Year 1 – Year 6 as a whole, the total nominal tax for the investment of 100 in Year 1 is the sum of -73 in Year 1 and -1 for each of Years 2 – 6 (5 years), i.e., -73 + (-5) = -78, resulting in a total deduction of 78 over the period.
Despite windfall tax and record profits, Shell paid just £15 million to UK, 22p per Brit last year
By comparison Norway received £6.3 billion from Shell, over a grand per Norwegian
28th March 2023, London – Energy giant Shell paid just £15 million in taxes and fees to the UK last year on their drilling, compared to over £6.3 billion to the Norwegian government over the same period, according to Global Witness analysis of Shell’s latest tax reporting, released today.
This means Shell paid around just 22p per UK citizen, compared to the £1,171 it paid for every citizen of Norway. This £15 million is much closer to the £9.7 million it awarded its CEO in 2022, than the considerably more it paid to most other countries in which it drills.
The UK ranks 19th out of 25 countries for taxes received by Shell last year, with the likes of the USA, Germany, Qatar and Italy all receiving far more from Shell than the UK. It comes despite the introduction of a UK windfall tax that Rishi Sunak, as Chancellor, described as a “significant set of interventions”.
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Rishi Sunak on stopping Rosebank says that any chancellor can stop his huge 91% subsidy to build Rosebank, that Keir Starmer is as bad as him for sucking up to Murdoch and other plutocrats and that we (the plebs) need to get organised to elect MPs that will stop Rosebank. [3rd version of image has same text].
In the ‘coming soon’ notice announcing this article I said that “[t]here aren’t any real climate deniers anymore”. I was mistaken and there are a very few people like Jeremy Corbyn’s brother Piers Corbyn. I’ve only met and spoken with him once but I’m satisfied that he’s genuine in his beliefs despite them being misguided. He and others like him have the right to believe whatever they like and he’s harmless enough – while he may persuade a few people the vast majority will understand that he’s mistaken and wrong.
Image of UK Prime Minister Rishi Sunak reads 1% RICHEST 100% CLIMATE DENIER
So apart from Piers Corbyn and a few similar people, there is no such thing as a climate denier nowadays. The Capitalists profiting from climate destruction have known for 60 years of more that they were profiting from destroying the planet and were forcing future generations to endure intolerable climate conditions, annihilating many thousands of species of plants and animals and generally totally fekking everything.
Governments are controlled, directed, owned by a very few extremely rich and powerful people, the very people that are profiting and maintaining their wealth, power and influence from destroying the planet. According to this perspective we do not exist in a democracy and it is instead a pretence hiding the influence of the rich and powerful. We exist in a plutocracy – we have a wealthy ruling class that politicians serve.
It cannot be accepted that politicians like UK’s Prime Minister Rishi Sunak or our expected next Prime Minister Keir Starmer and the like are mistaken true believers like Piers Corbyn believes. Rather they are climate deniers in the sense of the fossil fuel industries – Exxon, Shell and BP – who know fully well that they are destroying the planet but deceive and mislead to continue making a filthy profit. It’s obvious to see that these politician cnuts serve this rich elite’s interests – Tory and Labour UK governments have answered to media tycoon Rupert Murdoch, sucking up to him, grateful to accept his orders.
Image of InBedWithBigOil by Not Here To Be Liked + Hex Prints from Just Stop Oil’s You May Find Yourself… art auction. Featuring Rishi Sunak, Fossil Fuels and Rupert Murdoch.
Sunak, despite being fully aware of the climate crisis is continuing to destroy the planet. Announcing the go-ahead for the Rosebank oil field he said that he intends to get every last drop of North Sea oil.
