JOB/GC/264  
 
16 July 2021  
(21-5670) Page: 1/2 
General Council  Original: English  
 
PROPOSED FOSSIL FUEL SUBSIDIES MINISTERIAL STATEMENT  
The following communication, dated 16 July 2021, is being circulated at the request of the delegation 
of New Zealand.  
 
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FOSSIL FUEL SUBSIDIES MINISTERIAL STATEMENT  
The following communication, dated [XX], is being circulated at the request  of the delegations of 
[TBC].  
 
1. Recognizing  that inefficient fossil fuel subsidies encourage wasteful consumption, 
disadvantage renewable energy, and depress investment in energy efficiency, and that effectively 
addressing fossil fuel subsidies will deliver trade, economic, social and environmental  benefits as 
well as release government funds to support a green and climate -resilient COVID -19 recovery;  
2. Recalling  our Leaders' commitment to fossil fuel subsidy reform under the Sustainable 
Development Goal 12(c) of the 2030 Agenda, and recogni zing that a growing number of World Trade 
Organization (WTO) Members have made further pledges under the auspices of the G20, G7, APEC 
and V20, and in the context of the Paris Agreement on Climate Change and the Addis Ababa Action 
Agenda on Financing for Development ; 
3. Recognizing  that subsidies have continued to steadily increase in the past decade and were 
estimated at approximately USD 500 billion in 2019, and diverting funding from such subsidies will 
support a just transition towards a green, sustainable economy;  
4. Recognizing  that a phase -out of fossil -fuel subsidies would effectively contribute to the Paris 
Agreement objective of holding the increase in global average temperature below 2°C above pre -
industrial levels, and would continue towards pursuing efforts to limit the temperature increase to 
1.5 °C above pre -industrial levels and will deliver lower climate -related global risks as outlined by 
the 2018 Intergovernmental Panel on Climate Change Special Report on Global Warming of 1.5°C;  
5. Further recognizing  the significant potential for a fossil -fuel subsidy phase -out to support the 
Paris Agreement goal of making public financial contributions consistent with a pathway towards low 
greenhouse gas emissions and climate -resilient development;  
6. Acknow ledging  that accelerating the reform of fossil fuel subsidies is therefore more urgent 
than ever; 
7. Considering  that sustainable development is a fundamental principle of the Marrakesh 
Agreement establishing the World Trade Organization  and that trade has be en explicitly identified 
as a powerful enabling force that is indispensable in progress toward sustainable development ; 
8. Confirming , therefore, that the World Trade Organization can play a central role in the 
reduction of trade and investment distortions ca used by fossil fuel subsidies by achieving effective 
disciplines on fossil fuel subsidies;  JOB/GC/264  
 
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  We have accordingly reached the following shared understandings:  
 
• We seek the rationali zation and phase out of inefficient fossil fuel subsidies that encourage 
wasteful consumption and encourage the remaining WTO Members  to join us in those 
efforts, recogni zing the substantial financial resource this could unlock globally to support 
the transition;  
• We recogni ze that reform needs to take fully into acco unt the specific needs and conditions 
of developing countries and minimize the possible adverse impacts on their 
development  in a manner that protects the poor and the affected communities;  
• We will share information and experiences to advance discussion in  the World Trade 
Organization aimed at achieving ambitious and effective disciplines on inefficient fossil fuel 
subsidies that encourage wasteful consumption, including through enhanced World Trade 
Organization transparency and reporting that will enable t he evaluation of the trade, 
economic, and environment effects of fossil fuel subsidy programmes;  
• We will elaborate concrete options to advance this issue at the World Trade Organization 
in advance of MC13.  
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