INF/TE/SSD/W/29/Rev.3  
 
12 February 2024 
(24-1234) Page: 1/11 
  Original: English  
 
  
TRADE AND ENVIRONMENTAL SUSTAINABILITY STRUCTURED DISCUSSIONS  
INFORMAL WORKING GROUP ON SUBSIDIES  
Compilation of experiences and considerations regarding subsidy design  
Revision1 
_______________  
 
Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  1 
2   AGRICULTURAL SUBSIDIES  ................................ ................................ .........................  2 
3   SUBSIDIES RELATED TO THE TRANSITION TO A LOW -CARBON ECONOMY  ..................  6 
4   TRANSPARENCY  ................................ ................................ ................................ ..........  9 
 
 
1  INTRODUCTION  
1.1.  In line with the 2021 TESSD Ministerial Statement ( WT/MIN(21)/6/Rev.2 ) and the 2022 TESSD 
Work Plan ( INF/TE/SSD/W/17 ), Members have carried out discussions on the environmental effects 
and trade impacts of relevant subsidies, related transparency issues and the role of  the WTO in the 
Informal Working Group on Subsidies.  
1.2.  Following the TESSD High -level Stocktaking event in December 2022 and the related 
Statement by the TESSD Co -Convenors ( INF/TE/SSD/W/21 ), Members have also shared experiences 
in subsidy design and considered how to e nhance transparency and data availability . Members 
started these discussions focusing on agricultural subsidies and subsidies related to the transition to 
a low -carbon economy.  
1.3.  This document provides a compilation of Member experiences and considerations with subsidy 
design based on discussions in the meetings of the Informal TESSD Working Group on Subsidies on 
16 March , 10 May, 19 September  and 21 November  2023. The compilation 's objective is to take 
stock of past discussions without being exhaustive of all types of subsidies that might be discussed 
in future meetings of this Working Group . 
1.4.  This document remains a 'living document ' and will continue to be updated based on  further  
discussions and  input from Members.  
 
1 The current revision updates a few Members' experiences based on specific comments provided by 
those Members , and slightly amend s the wording of paragraphs 2.5 and 3.4 to reflect what considerations 
Members "may" take into account regarding  subsidy design.  INF/TE/SSD/W/29/Rev.3  
 
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  2  AGRICULTURAL SUBSIDIES  
2.1.  Agricultural subsidies were discussed in the meeting s on 16 March  and 19 September  2023. As 
part of presentations contributing to the discussion on environmental effects  of agricultural 
subsid ies, the Food and Agriculture Organization (FAO)  pointed to the importance of taking into 
account different dimensions  such as country conditions, support instruments and agricultural 
products  in the analysis of environmental effects and possible trade -offs between different policy 
objectives . The Organization for Economic Cooperation and Development ( OECD ) highlighted that 
analytical work had found that the most market -distortive producer support (market price support, 
output subsidies, and variable input sub sidies  without constraints ) was also potentially the most 
harmful to the environment, while agri-environmental payments could have positive environmental 
impacts , especially  if spatially targeted and based on environmental performance. The Secretariat 
of the Convention on Biological Diversity (CBD)  elaborated on Target 18 of the Kunming -Montreal 
Global Biodiversity Framework (GBF), which aimed to identify, eliminate, phase out or reform 
incentives (including subsidies) harmful for biodiversity  and scale up positive incentives for the 
conservation and sustainable use of biodiversity .  
2.2.  In discussing environmental effects, Members acknowledged the complexities of agricultural 
subsidies and their effects on the environment  and encourag ed a holistic approach taki ng into 
account environmental, social (such as food security) and economic indicators . The relevance of 
moving to less distorting and environmentally harmful forms of subsidies  and using subsidies to 
improve the environmental performance of the agricultura l sector  was also highlighted . 
2.3.  Members also shared their experiences on subsidy design and discussed the following 
questions:  
• How do you consider possible environmental effects and trade impacts in the design of 
agricultural subsidies? How do you balance environmental and trade considerations?  
• What kind of agricultural subsidies can be beneficial to the environment?  
• What criteria do Members consider when establishing subsidies in order to determine 
whether  or not they are environmentally friendly?  
2.4.  Table 1 provides a compilation of experiences shared by Members in the form of presentations 
or as part of their interventions.  
Table 1. Experiences with the design of agricultural subsidies  
Australia: Sustainable finance  
The Australian Sustainable Finance Institute is working closely with government to determine 
appropriate regulatory and policy settings to enable sust ainable agricultural financing flow on 
the basis that investment in this sector sees opportunities for returns because of undistorted 
markets and high sustainability credentials of the sector. Australia has focused particularly on 
transition finance, as it  is important that finance is available to support the transition to 
sustainable practices in addition to existing ones.   
Brazil: Subsidies and environmental sustainability of Brazilian agriculture  
Brazilian agricultural policy aims to strengthen sustainability in its three dimensions – economic, 
social and environment, and its goals, inter alia , include increase d productivity; reduction of 
GHG emissions; prevention of losses in agricultural production; rationalization of t he use of 
natural resources and inputs; soil recovery and conservation; improving the quality and health 
of agricultural production; treatment of manure and agricultural residues ; and reforestation. 
Agricultural production has expanded at a rate substantia lly superior to agricultural land use and 
was mainly driven by gains in productivity, including through the use of double cropping.  
Environmental sustainability has guided agricultural policy for decades, including the Agriculture 
Climate Risk Zoning polic y and the Low Carbon Emission Agriculture Plan (ABC). The ABC Plan 
aims to spread environmentally friendly technologies, while the ABC program provides access 
for environmentally sustainable financing (among other options). The Brazilian Forest Code 
establ ishes minimum limits for environmental preservation in rural properties. As of 2021,  areas 
used for farming only covered around 31% of Brazilian territory, compared to a forest area of 
close to 60%.  INF/TE/SSD/W/29/Rev.3  
 
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  Credit subsidies are the main input subsidy instrument, although they represent less than a third 
of resources raised by farmers and less than 1% of the value of agricultural production. 
Environmental sustainability is an essential requirement for accessing resources. Production has 
grown at an accelerated pace , contrasting with the reduction of subsidies, which demonstrates 
the economic sustainability of Brazilian agriculture. Instruments such as ecological economic 
zoning and agricultural climate risk zoning are fundamental for increasing environmental 
sustain ability. There is a need to associate financing for sustainable production with financing 
for the recovery of ecosystems, i.e. payment for environmental services.  There is also a need 
for a balanced approach between economic, social and environmental aspec ts, given that, if it 
is necessary to adopt subsidies to keep the economic aspects artificially viable, then the activity 
is not sustainable.  
Costa Rica: NAMA Café and Programme for  Payment for Environmental Services  
The NAMA Café initiative seeks to prom ote low -emission and sustainable coffee production and 
processing in Costa Rica, through the adoption of low -emission technologies and the efficient 
use of water and energy. An incentive mechanism by the Costa Rican Coffee Institute (ICAFE) 
allows NAMA caf é beneficiaries to receive a monetary contribution for a maximum of three 
investment projects of up to 10% of the investment. Incentives might be obtained for 
technologies related to wet and dry milling, by -product treatment system, or use of renewable 
energy, among others.  
The National Fund for Forest Financing finances forest management for the benefit of SMEs. The 
Fund also includes a Programme for Payment of Environmental Services (PPSA) drawing its 
funding from a single fuel tax, of which 3.5% is alloc ated to PPSA which guarantees the 
sustainability of the Progra mme. Other financial contributions can be received from the 
Government and international development financing. The development of these programs 
entails an exhaustive process of consultation at  the domestic level with government sectors and 
entities, including the Ministry of Foreign Trade, which ensures that any state policy adheres to 
the rules of the multilateral trade system and international law.  
European Union : Environmental dimension of the EU's Common Agricultural Policy (CAP)  
Since 1980, the EU's CAP gradually shifted from price support to coupled producer support , and 
then to decoupled support. Around 85% of EU farm support currently falls into the WTO green 
box. EU agriculture has seen decreasing trends in GHG emissions (19% lower in 2017 vs. 1990), 
in antibiotic sales for animal production (40% lower in 2020 vs. 2011), an d in chemical 
pesticides. Organic farming is increasing , accounting for 9% of utilised agricultural land in 2020. 
Challenges remain, in particular regarding biodiversity, water quality, soil erosion and ammonia 
emissions.  
By placing requirements on farmer s, the CAP provides a baseline protection for the environment 
on more than 8 9% of EU's agricultural land, while for example targeted voluntary commitments 
related to soil and going beyond this baseline protection cover 45% of European farm land. In 
addition to statutory management requirements, all farmers receiving CAP support have to 
adhere to EU standards on good agricultural and environmental condition of  lands  such as crop 
rotation, allocation of at least 4% of land to non -productive areas of ecological importance, 
maintenance of permanent grassland, and water management and protection from pollution.  
The CAP aims to achieve the right balance between econ omic, social and environmental 
objectives. The new CAP (2023 -2027) includes enhanced conditionality regarding climate and 
environmental requirements which are mandatory for farmers. Eco -schemes and 
environmentally friendly rural development interventions p rovide additional incentives for 
voluntary practices beyond conditionality. The new CAP includes a needs -based, targeted 
approach to addressing environmental and climate objectives, includes a no backsliding clause 
in terms of environmental ambitions, and provides for different mechanisms to ensure alignment 
with the EU Green Deal.  
Israel: Supporting agricultural practices for positive environmental outcomes  
Israel's experience shows that subsidising agricultural practices like service crops has a positiv e 
effect on the environment, where it is accompanied by research and extension, and parallel 
commitments from farmers , for instance, provision of partial subsidies that require matching by 
farmers. Similarly, subsidies for integrated pest management drasti cally reduce chemical 
pesticide use while maintaining the same level of production; and subsidies for soil conservation INF/TE/SSD/W/29/Rev.3  
 
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  lower nitrous oxide emissions, reduce water evaporation and decrease soil erosion, while 
increasing organic matter, biota, and wildlife presence, when used under the same 
comprehensive approach.  
Japan: Approach to incentivize sustainable agriculture  
Japan has continually reformed its agricultural support policy, with government spending on 
agriculture being on a downward trend since 2000.  Japan pursues a two -dimensional approach 
to incentivize sustainable agriculture by : (i) using environmental conditionality to 
constrain/mitigate the negative environmental effects of subsidies; and (ii) repurposing 
subsidies for green innovation to enhanc e positive environmental effects. In terms of 
environmental conditionality, Japan's agri -environmental policy establishes periodically reviewed 
reference levels, including in the form of standards, for almost all agricultural support taking 
into account en vironmental cross compliance. Japan also promotes Good Agricultural Practices 
(JGAP, ASIAGAP, Global G.A.P.) and has noted an increase in GAP -certified farms by more 
than 1.7 times within 5 years.  
In terms of enhancing positive effects or repurposing of green innovation, support policies 
include direct payments for on -farm environmentally friendly practices (such as soil testing and 
analysis, cover cropping, living mulching), support for community -based activities in rural areas 
(including maintenance of essential agricultural infrastructure and eradication of invasive 
species) . and support for R&D activities to develop crop varieties that mitigate or adapt to 
environmental impacts.  
Japan assesses the actual impacts of policies by consideri ng its particular natural, social and 
economic conditions and ensures policy coherence by enacting cross -sectoral standards against 
pollution to achieve national goals.  
Paraguay: Good agricultural practices  
In Paraguay, about 65% of farms carry out some soil management and conservation practices, 
of which 64% apply crop rotation and 16% direct sowing, which are the most frequent good 
agricultural practices. Organic production is not automatically considered a  good agricultural 
practice as it involves trade -offs (e.g. mechanical processes that harm soil) that may not lead 
to a net -positive impact on the environment. Other good agricultural practices, inter alia , include 
the use of biotechnology which enhances p roductivity and lowers the use of resources, while 
precision agriculture provides for a more efficient use of equipment and plots, lowering 
environmental impact. In terms of farming practices, the adjustment of animal load according 
to the intrinsic capaci ty of available fields will enhance productivity and can bring the greatest 
benefits for climate  change mitigation.  
United Kingdom : Reform of agricultural policy  
Estimating the environmental impacts of environmental stewardship schemes to date have 
reveal ed that between £3.20 and £5.60 of public goods being returned for every £1 put in, with 
benefits to habitats and species, landscapes and water quality.  
Significant reforms of agricultural policy and spending are being undertaken  in the UK to  help 
align t he agricultural sector with national objectives for improving the natural environment and 
meeting the national target of net zero greenhouse gas emissions by 2050.  
Under the 25 Year Environment Plan, new Environmental Land Management Schemes will 
contribute to the delive ry of six environmental public goods : (i) clean and plentiful water: 
(ii) thriving  plants and wildlife, (iii) protection from and mitigation of hazards; (iv) clean air; 
(v) beauty , heritage and engagement; and (vi) mitigation and adaptation to climate chan ge. 
Some of these include the sustainable farming incentive  (SFI) programme , which introduces six 
new sustainable farming standards and provides payments  to farmers to adopt and maintain 
sustainable farming practices that can protect and enhance the natura l environment alongside 
food production, and support farm productivity ; countryside stewardship (CS)  payments  towards 
more targeted actions relating to specific locations, features and habitats ; as well as  landscape 
recovery payments for  longer  term, large r scale projects to enhance the natural environment.  
The UK 's Farming Equipment and Technology Fund provides grants ranging from 
£2,000 -£25,000 based on a prescribed list of items. This too support s the purchase of specific 
equipment, technology and small infrastructure investments aimed at making an immediate INF/TE/SSD/W/29/Rev.3  
 
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  difference to farm performance, including investments that will help farmers use less inputs, 
reduce emissions and cut waste .  
Uruguay: Economic incentives in the agricultural sector with environmental objectives  
Uruguay has two support program mes that, in principle , had beneficial effects on the 
environment , namely, the Forestry Law 15.938  (1987) and the Native Forest Decree 247  (1989). 
These regulations provide for tax exemptions and are still in force with some modifications.  
The Forest ry Law of 1987 had two objectives : first, the conservation of forests through 
sustainable management and , second, the expansion of forest area to lands of lower 
productivity. These objectives were pursued through a support program me providing a tax 
exemption of up to 75% of the cost of planting a new forest, waivers from tariffs on imports of 
machinery and materials, and technical assistance. The enactment of this law resulted in an 
increase in planted fore st cover from 15,000 hectares in 1985 to over 1 million hectares. The 
Native Forest Decree 247 of 1989 targeted farms with areas occupied by native forests and 
established tax reductions for increasing the area of native forest relative to the National For est 
Registry. This measure led to an increase in surface area of native forest by 25%. Together, 
these two support program mes have resulted in the creation of a carbon sink in Uruguay.  
While the original objectives of both regulations were forest conservat ion and providing an 
economic incentive to a specific sector, the policies also resulted in beneficial effects on the 
environment due to net carbon capture and the consequent creation of a carbon sink. 
Considering that these positive environmental impacts were unintended from a policy design 
perspective indicates the complexity of effectively assessing the long -term environmental 
impacts of subsidies, whether positive or negative.  
 
2.5.  Members also shared their considerations related to the  design  of agricultural subsidies. 
Consolidating the elements raised in the discussions2, Members may take into account the following 
considerations when designing agricultural subsidies:  
• defining a set of goals related to sustainable development such as generating income and 
jobs, raising living standards, improving food security and ensuring environmental 
sustainability;  
• ensur ing policy coherence across sectors in achieving environmental objectives;  
• consider ing in an integrated manner the impact on production, trade and environment and 
steering agricultural production towards high -efficiency and sustainability;  
• subsidies should not  be granted in areas with a greater degree of environmental damage 
such as heavy metal pollution to avoid "environmental depressions" in agricultural 
production;  
• subsidies should be directed towards good agricultural practices as they can limit negative 
effects on the environment while helping developing countries increase p roductivity;  
• a comprehensive consideration of different environmental effects, including carbon 
emissions, biodiversity, healthy soils and responsible water management;  
• the environmental effects of agricultural subsidies , including long  term,  with due 
consideration to each country's specific situation;  
• consider ation of subsidies that can be beneficial to the environment, including support for 
the provision of public goods or compensation of income loss due to the use of 
environmentally friendl y methods of production;  
• evaluat ing the environmental impacts of agricultural policy using quantitative models;  
• the economic and social externalities on third countries, including the impact on farmers 
in developing countries ; 
• the disciplines in the WTO Ag reement on Agriculture and its Green Box , which  can serve 
as a policy tool for the repurposing of agricultural subsidies towards sustainable agriculture 
and "green green box " measures ; 
• creation of incentives for private sector  investment  towards sustainable activities and 
innovative approaches to meet climate goals ; 
• measures that support access to and the adoption of innovation , knowledge and 
technologies , which  can support sustainability and food security objectives while also 
minimizing  trade and production distortions ; and  
 
2 An unconsolidated, anonymized list of design considerations  for agricultural subsidies  raised in 
discussions  is provided in Table 3 in document INF/TE/SSD/W/29/Rev.1 . INF/TE/SSD/W/29/Rev.3  
 
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  • avoidance of p rice incentives and subsidies tied to production of a specific commodity or 
input, as evidence indicates that these  are not only trade distortive, but also the most 
potentially damaging to the environmen t. 
3  SUBSIDIES RELATED TO THE TRANSITION TO A LOW -CARBON ECONOMY  
3.1.  Subsidies related to a low -carbon transition were discussed in the meeting s on 10 May  
and 21 November . According to the presentation by  the I nternational Institute for Sustainable 
Development  (IISD) on the Energy Policy Tracker, at least USD  474.43 billion in support  went 
towards clean energy compared to USD  512 billion for support towards fossil fuel energy  during 
2020-2021. IISD underscored the need to prioritize clean energy investments and reforms in 
recovery plans, and to balance immediate crisis responses with longer term sustainability objectives.  
3.2.  In the Working Group, Members shared their experiences on subsidy design and discussed the 
following questions , among others : 
• How do you balance environmental and trade considerations when designing subsidies 
related to the low -carbon transition?  
• How do you consider possible trade impacts in the design of subsidies related to the 
low-carbon transition?  
• How can the environmental effects and trade impacts of such subsidies be identified?  
• What are information gaps to better understand these impacts, and how could 
transparency and data  availability be enhanced?  
3.3.  Table 2 provides a compilation of experiences shared by Mem bers in the form of presentations 
or as part of their interventions.  
Table 2. Experiences with the design of subsidies related to the transition to a 
low-carbon economy  
Australia : Clean hydrogen initiatives  
Australia 's national hydrogen strategy of 2019 provides a framework for government and industry 
to work together to build a clean hydrogen industry. Over 100 announced clean hydrogen and 
hydrogen derivative projects provide for an investment pipeline of around AUD 200 -300 billion.  
Australia has alloca ted AUD 2 billion for the Hydrogen Headstart Programme, which seeks to bridge 
the commercial gap between production costs and market price for renewable hydrogen thereby 
accelerating the development of Australia's hydrogen industry. The programme will buil d on the 
Hydrogen Hubs Initiative under which AUD 500 million is allocated for hubs across Australia that 
bring together hydrogen users, producers and potential exporters  to accelerate industry growth .  
Australia has committed  more than AUD 38 million to d evelop a guarantee of origin scheme to 
certify clean hydrogen products. Th is product -based emissions accounting framework will initially 
cover renewable electricity, hydrogen and its derivatives, and will expand to include other products 
such as green meta ls and biofuels. The proposed scheme is designed to be voluntary  and aligned 
with international standards, and has been developed in collaboration with Australia's energy 
partners and the  International Partnership for Hydrogen and Fuel Cells in the Economy  (IPHE ).  
Brazil: Subsidies in support of green transition in agriculture  
Brazil provides non -distortive agriculture subsidies on a modest level to support the green 
transition in agriculture. Its low -carbon agriculture program me (ABC plan) has succeeded in 
mitigating more than 170 million tons of carbon emissions by 2018 and is a core part of the strategy 
encapsulated in Brazil's ambitious Nationally Determined Objective.  
Canada: Federal Budget 2023: Affordable energy, good jobs, and a growing clean economy  
Canada's plan for affordable energy , good jobs, and a growing clean economy proposes 
investments in clean growth of almost USD  21 billion over the next five  years and focuses on 
securing global investment in the clean economy, with significant  funding allocated for clean 
electricity, clean economy growth, resilient infrastructure, and technological innovation.  
To accelerate private investment, three tiers of federal financial incentives are employed: targeted 
programming to support clean energ y and decarbonization projects; strategic financing to attract INF/TE/SSD/W/29/Rev.3  
 
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  private capital and accelerate deployment of key technologies; and investment tax credits for 
investments in clean energy, clean hydrogen, clean technology manufacturing and deployment, 
and car bon capture use and storage. These financial incentives are underpinned by carbon pollution 
pricing and regulatory frameworks providing a price incentive to reduce emissions and innovate.  
Green Subsidy Policy  of China  
China's green subsidy policy aims to  contribute to its goals of carbon peaking and carbon neutrality, 
playing an important role for the green transformation of its economy. Examples of policies include 
special funds for the development of clean energy and air pollution and control, a subsidy  fund for 
energy conservation and emission reduction, preferential tax treatments for new energy vehicles 
and enterprises with comprehensive utilization of resources, and conservation and restoration of 
nature.  
In addition, t he practice of competitive all ocation of fiscal funds reformed the previous model of 
average allocation, providing incentives for participants and improving the effectiveness of the use 
of fiscal funds. Procedures of the competitive allocation include the issuing of funding opportuniti es 
by the Ministry of Finance, submission of proposals by candidate cities, expert review and 
competitive mechanism, public notification of assessment results, funds allocation and performance 
evaluation.  The typical case is Sponge City pilot projects.  
European Union: EU policy support for the transition to a low -carbon economy  
The EU Green Deal Industrial Plan aims to scale up manufacturing capacity for net -zero 
technologies and includes the four pillars of: predictable regulations; increased investment for clean 
tech production; skills enhancement; and fair and open trade.  
The EU's state aid framework includes a balancing principle, where positive contributions to 
achieving the policy objective are to outweigh any negative effects on trade. The guidelin es on 
state aid for climate, environmental protection and energy provide for : safeguards (ensure 
effectiveness , do not unduly distort competition) ; coherence with environmental legislation ; and 
WTO-compatibility. The WTO has a role in supporting climate ne utrality through its disciplines on 
subsidies, promoting green transition in a manner that minimize s trade distortions, and as a forum 
for deliberations on trade aspects of the green transition.  
European Union: Hydrogen strategy and initiatives  
The EU strategy on hydrogen was adopted in 2020 and suggested policy action points to five areas: 
investment support; support production and demand; creating a hydrogen market and 
infrastructure; research and cooperation; and international coop eration.  The EU provides support 
for renewable hydrogen through various channels, including:  
• The NextGenerationEU programme, which has been made available to EU Member States 
to invest in hydrogen projects across the value chain.  
• Investment support has  been provided through State aid, in particular under the Important 
Projects of Common European Interest (IPCEIs) , to develop  innovative technologies for the 
hydrogen value chain to decarboni ze industrial processes and the mobility sector with a 
focus on e nd-users. A follow -up scheme aims to support the construction of 
hydrogen -related infrastructure and technologies for the integration of hydrogen into the 
industrial sector.  
• The European Hydrogen Bank, a European financing facility , aims to unlock privat e 
investments in hydrogen value chains, both domestically and in third countries, by 
connecting renewable energy supply to EU demand and addressing initial investment 
challenges.  
• Green hydrogen partnerships will facilitate the promotion of the import of renewable 
hydrogen from third countries and contribute to incentivizing decarboni zation. 
The Hydrogen Public Funding Compass provides an online guide to identify public funding sources 
for hydrogen projects and relevant EU programmes.  The EU has also adopt ed legislation to define 
what can be considered renewable hydrogen, including methodologies to assess the actual 
reduction of GHG emissions and on additionality. In addition, any public financial support should 
take into consideration the environmental imp acts of renewable hydrogen production, in particular , 
in terms of water use.  INF/TE/SSD/W/29/Rev.3  
 
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  Japan: Green Innovation Fund  
As part of its effort to achieve carbon neutrality by 2050, Japan has been utilizing the Green 
Innovation Fund, which will provide continuous suppor t from R&D through to social implementation 
for up to 10 years. Japan is also preparing a framework to support green transformation by utilizing 
financial resources to be generated by growth -oriented carbon pricing, which will be introduced in 
a step -by-step manner.  
Such support aims to achieve green growth through the creation of new industries and trade flows, 
rather than closing off domestic markets. For this purpose, Japan will utilize subsidies, such as 
targeted support to high -risk R&D activities that  are expected to bring large potential benefits as 
an incentive, in combination with regulatory measures, to promote bold private investments in 
sectors that contribute to the global green transformation.  
Norway: Incentives provided for purchase and usage  of electric vehicles  
Norway has been supporting the introduction of electric vehicles (EV) for some time. Policies do 
not discriminate between countries of origin or producers but between cars with combustion 
engines and EVs. Incentives included the exem ption of certain taxes at the moment of purchase of 
new EVs, most notably the special 'one -off registration tax' on vehicles and the 25 % value -added 
tax (VAT). Support measures for usage have also been granted, such as exempted or lower fees 
for road toll and ferries, subsidi zed public charging facilities, as well as privileged access to road 
lanes generally reserved for buses and taxis. These incentives are considered to have contributed 
substantially to the steady increase in the number of EVs sold in the  Norwegian market, as a 
proportion of total car sales, over the last decade.  
Over time, the government has modified some of the policies. The strong tax incentives combined 
with increased share of EVs has led to a substantial decline in tax revenues. To sl ow down this 
revenue decline, Norway has introduced VAT for the more expensive EVs (cars that cost more than 
NOK 500 ,000) and a low one -off registration tax for EVs. This also reduces the share of subsidies 
given to customers who buy cars in the premium se gment. In addition, the road toll and ferry fees 
are being gradually increased to keep public transport competitive. These modifications illustrate 
that subsidies should be scaled down when the new technology matures and becomes more 
competitive.  
Switzerland: Energy Strategy 2050 – Promotion of energy efficiency and renewable energy  
Switzerland's Energy Strategy 2050 has three key objectives : (i) increasing energy efficiency; 
(ii) increasing the use of renewable energy; and (iii) withdrawing use of nuclear energy.   
Building programmes at the cantonal level aim at increasing energy efficiency through 
refurbishments, replacement of fossil heating, district heating, and e -vehicle charg ing. These 
measures for buildings are financed through earmarking of the CO2 -tax proceeds, a third of which 
is distributed to cantons as subsidies. Measures for appliances and industry target industry, small 
enterprises and households and include financial  support for energy efficiency measures awarded 
through auctions to the lowest subsidy -savings ratio, and are financed through the electricity grid 
surcharge.  
Promotion systems to increase the use of renewable energy amount to CHF 1.3 billion per year, 
financed through surcharges on network costs, and cover measures such as one-time investment 
aids (between 20% to 60%), feed -in premiums and auctions for large photovoltaic (PV) plants. 
These support measures are to be phased out by around 2030 -2035 and are currently available 
for eligible technologies such as solar PV , including rooftop and alpine installations; biogas, wood 
and waste incineration plants; and plants for wind, hydro and geothermal energy. In terms of 
withdrawing from the use of nuclear energy , the Energy Strategy 2050 envisions a step -by-step 
approach prioritizing safety and restricting issuance of new licen ces. 
United States : Overview of the US clean hydrogen landscape  
The United States currently produces 10 million metric tonnes (MMT) of hydrogen , which is 
primarily used by the petroleum refining and ammonia production sectors. The United States aims 
to increase production capacity to 20 MMT/year by 2040 and 50 MMT/year by 2050 and tap into 
emerging hydrogen markets such as data centres, por ts, steel manufacturing and heavy  duty 
trucks.  INF/TE/SSD/W/29/Rev.3  
 
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  The US National Clean Hydrogen Strategy and Roadmap has three main strategies: (i) to target 
strategic, high -impact end uses like industrial applications, transportation and power sector 
applications; (ii) to reduce the cost of clean hydrogen including hydrogen production, onboard 
storage, delivery and dispensation; and (iii) to focus on regional networks by deploying clean 
hydrogen hubs, developing infrastructure and ramping up scale to access economic benefi ts. 
The US Inflation Reduction Act (IRA) 2022 provides clean energy tax credits and other provisions , 
which aim to increase domestic renewable energy production , including for clean hydrogen . The 
Clean Hydrogen Production Tax Credit creates a 10 -year incen tive for clean hydrogen production, 
while the Investment Tax Credit enables projects to claim up to 30% tax credit based on the carbon 
intensity of the project. Alternatively, in lieu of the production tax credit, projects can claim an 
Investment Tax Credi t of up to 30% for clean hydrogen production facilities. Additionally, several 
States in the US offer incentives for the installation of fuel cells and hydrogen energy systems.  
The Regional Clean Hydrogen Hubs Program (H2Hubs) includes a USD 7 billion investment to 
establish seven clean hydrogen hubs across the country aimed at accelerating commercial scale 
deployment of low -cost clean hydrogen by building a network of hydrogen p roducers, consumers 
and connected infrastructure to support the production, storage, delivery and end use of clean 
hydrogen. Key areas for H2Hubs have been evaluated on the basis of technical merit and impact, 
financial and market viability, workplan, mana gement team and project partners, and community 
benefits plan.  
As part of the Governments Energy Earthshots I nitiative , the Hydrogen Shot aims to reduce the 
cost of clean hydrogen  by 80%  to USD 1 per 1 kg in 1 decade  ("111 "). The Government is working 
closely with industry, including through grants, loans and other tools and incentives, to stimulate 
competition, innovation and investment to cataly se cost declines across the  value chain.  
 
3.4.  As part of the experience sharing , Members exchanged on their considerations in the design of 
subsidies pertaining to the transition to a low -carbon economy , highlight ing a number of common 
elements, including compliance with WTO rules. Consolidating the elements raised in the 
discussions3, Members may take into account the following considerations when designing subsidies 
related to a low -carbon transition:  
• minimiz ing trade-distorting impacts when designing subsidies;  
• provid ing subsidies on a non -discriminatory basis;  
• avoid ing local content requirements;  
• time limitation s for the subsidy  programme ; 
• the balance between the positive effects for the transition to a low -carbon economy and 
the distorting effects on trade;  
• consideration of whether the programme directly links to the reduction of greenhouse gas 
emissions;  
• avoid ing unilateral measures that may disrupt global trade;  
• taking into account how market distortions might disproportionately affect developing and 
least developed  countri es as well as different development levels of countries ; and 
• quantify ing environmental effects of climate -smart agricultural practices using 
science -based, transparent measurement tools to leverage investment.  
4  TRANSPARENCY  
4.1.  Since its first meeting in March 2022, the Working Group has been discussing what information 
exists to better understand environmental and trade impacts of different subsidies,  including 
agricultural, fossil fuel, industrial and green subsidies . Members pointed to the challenge of assess ing 
potential environmental impacts of subsidies due to data shortcomings, and the need for collecting 
quality data and improving transparency on subsidies .4 In 2023, sector -specific discussions on 
agricultural subsidies and subsidies related to the low -carbon transition included a focus on how 
transparency and data availability could be enhanced .  
 
3 An unconsolidated, anonymized list of design cons iderations for subsidies related to the low -carbon 
transition raised in discussions is provided in Table 4 in document INF/TE/SSD/W/29/Rev.1 .  
4 TESSD Summary Report 2022 – INF/TE/SSD/R/14 .  INF/TE/SSD/W/29/Rev.3  
 
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  4.1  Agricultural subsidies  
4.2.  Regarding subsidies on agriculture, Members underlined the importance of transparency and 
monitoring for assessing environmental impacts , both negative and positive . In this regard, the 
availability of data on agricultural subsidies, including through domestic support notifications at the 
WTO and support estima tes by the OECD, as well as the usefulness of existing analytical work by 
other international organizations and stakeholders  was acknowledged .  
4.3.  In presentations at the meeting on 19 September, the OECD noted that agricultural support in 
54 countries had be en increasing in recent years, and amounted to USD 817 billion per year during 
2019-2021. The WTO Secretariat presented on improvements in the Agriculture Information 
Management System (AG -IMS) and informed that environmental payments notified under 
paragr aph 12 of the Green Box amounted to an annual average of around USD 35 billion over recent 
years, with the top eight Members accounting for 99% of payments provided in 2018.  
4.4.  Members highlighted the need to fulfil existing notification requirements under the WTO 
Agreement on Agriculture as those provid ed the basis for transparency in the area of agricultural 
subsidies. Collaboration with environmental stakeholders for data collection and impact assessments 
using science -based, transparen t measurement tools w as considered important for  assessing 
environmental impacts accurately.   
4.5.  Regarding opportunities to enhance transparency and possible  future work  more broadly , 
suggestions included to carry ou t technical exercises that could focus on identifying : (i) the types of 
agricultural subsidies that are trade and production distorting and also particularly harmful to the 
environment , as well as those types that can be beneficial for the environment ; and (ii) good and 
particularly harmful practices in various sectors, including agriculture, such as the use of hazardous 
chemical s. Further suggestions included to : (iii) share experiences and discuss what environmental 
impact indicators  might  be used  in the monitoring and evaluation of agricul tural su pport 
programmes ; (iv) carry out a questionnaire on the design of environmental programmes, including 
on environmental objectives, trade -offs between environmental objectives and results  of measures ; 
and (v) share experience s and practices in environmental program mes under the Green Box support 
measures under the Agreement o n Agriculture  for enhancing mutual understanding and learning .  
4.2  Subsidies related to the low -carbon transition  
4.6.  Regarding subsidies related to the transitio n to a low -carbon economy , the low level of 
compliance with notification requirements under the WTO Agreement on Subsidies and 
Countervailing Measures ( SCM Agreement ) was underlined , as was the need to increase efforts to 
fulfil existing notification obligations.  Proposal s on improving transparency in the  SCM Committee 
were pointed out as well as the need to support Members with genuine capacity concerns to engage 
in work to  improve the timeliness and quality of information provided . Furth er opportunities to 
enhance transparency on subsidies in the WTO were considered to be found in  Members' Trade Policy 
Reviews and regular Trade Monitoring Reports , as well as th rough experience and information 
sharing on domestic initiatives , including  in TESSD.   
4.7.  Members also shared national experiences and measures on transparency on energy subsidies 
and other subsidies related to the low -carbon transition. Transparency on the development and 
implementation of subsidies polices could be ensure d through national legislation, opportunities for 
public comments on policies, public offering of specific projects, and regular reports on energy 
subsidies, including information on progress towards meeting national objectives on climate and 
energy.  These  improvements should start by addressing the notification process within the WTO 
framework, in terms of both the quantity of notifications as well as the quality of the information 
notified.  
4.3  International cooperation and initiatives  
4.8.  Transparency could also be enhanced through international cooperation. The initiative for a 
joint Subsidy Platform  by the WTO and other international organi zations  (IMF, OECD, WB)  was 
welcome d and encouraged to be further developed  in consultation with Mem bers.5 Other initiatives  
 
5 Subsidy Platform: https://www.subsidydata.org/ . INF/TE/SSD/W/29/Rev.3  
 
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  to enhance transparency and data availability on different types of subsidies  that were presented or 
referred to in the Working Group , inter alia , include d:  
i. OECD Agricultural Policy Monitoring and Evaluation : an annual report that monitors support 
policies in 54 countries (policy changes and measurement of support – producer and 
consumer support estimates)6; 
ii. OECD Policy Instruments for the Environment (PINE) database: provides detailed 
information on policy instruments relevant for environmental protection and natural resource 
management, and will be utilized to measure environmentally positive subsidies under the 
Kunming -Montreal Global Biodiversity Framework7;  
iii. work by the OECD on a Manufacturing Groups and Industrial  Corporations (MAGIC) database 
aimed at tracking and monitoring of government support over time and across industrial 
sectors, geographical regions and policy instruments8;  
iv. Energy Policy Tracker : an initiative of 29 expert organizations which tracks  public financial 
flows from fossil fuels to clean energy, covering policies affecting energy production and 
consumption for 38 economies9; 
v. OECD Inventory of Support Measures for Fossil Fuels : documents and estimates government 
measures that encoura ge fossil  fuel production or consumption relative to renewable 
alternatives10; and  
vi. IISD-OECD Fossil Fuel Subsidy Tracker: brings together existing international estimates of 
support for fossil fuels to help bridge the reporting gap and track progress again st 
government commitments to phase out "inefficient fossil -fuel subsidies" in the context of 
the G20, G7 and APEC forums.11 
__________  
 
6 Agricultural policy monitoring and evaluation : http://oe.cd/mon itoring . 
7 PINE Database: http://oe.cd/pine .  
8 OECD (2023), "Government support in industrial sectors: A synthesis report", OECD Trade Policy 
Papers, N o. 270 : https://doi.org/10.1787/1d28d299 -en. 
9 Energy Policy Tracker: https://www.energypolicytracker.org/ . 
10 Inventory of Support Measures for Fossil Fuels : http://oe.cd/fossil -fuels/ . 
11 Fossil Fuel Subsidy Tracker : https://fossilfuelsubsidytracker.org/ .