Oil and gas contribute hundreds of billions of euros to European government revenues every year, according to a new study which highlights how the industry – far from being subsidised – crucially boosts public finances in the European Union and Norway.Energy taxation and subsidies in Europe, a study commissioned  by OGP and carried out by independent consultant NERA Economic Consulting, sheds new light on the financial contributions and subsidies in the European energy sector.

“Far from being subsidised, the oil and gas industry is among the largest contributors to government revenues in the energy sector,” explained Roland Festor, OGP’s EU affairs director.

OGP had commissioned the research to show the facts about European government subsidies to energy industries – an intensely debated issue, with conflicting numbers and complicated methodologies.

“Reliable figures are crucial now, as the European Union looks at state aid, energy costs and consumer protection policies in a bid to protect household bills, preserve industrial competitiveness and ultimately define Europe’s long-term climate and energy policy,” Roland said.

The consumption of one barrel of oil generates $124 (around €90) in government revenue. This contrasts with the consumption of an equivalent amount of energy generated by renewables, which in some cases can cost tax payers over $700 (or more than €500), the study shows.

Oil and gas contributed €433 billion to the EU and Norwegian government treasuries in the reference year 2011 (the latest year for which comprehensive data was available) and received €0.6 billion, making it a net contribution of just over €432 billion. These numbers are in contrast to the prevailing assertion that oil and gas received billions of euros in subsidies across the EU in 2011.

The full study Energy taxation and subsidies in Europe: a report on government revenues, subsidies and support measures for fossil fuels and renewables in the EU and Norway, can be found at http://www.nera.com/67_8572.htm. 

EU 28+ Norway Net Government Revenues and Mandated Transfers (2011)
Source Government
Revenues

€ billion
Government
Expenditures
and Mandated
Transfers

€ billion
Total
€ billion
Primary
Energy
Consumption

Mtoe
Oil 333 -0.2 332 511
Gas 100 -0.4 100 390
Coal 36 -4 33 286
Wind 8 -9 -1 16
Solar 2 -17 -15 4
Source: NERA report, page 36