The White House 

Office of the Press Secretary 

For Immediate Release November 12, 2010 

G-20: Fact Sheet on Energy Issues 

Today at the Seoul Summit, G-20 Leaders re-affirmed their commitment to the groundbreaking 

decision taken at the Pittsburgh G-20 Summit in 2009 to phase out fossil fuel subsidies in the 

medium term. They recognized the substantial progress that has already been made in the last 14 

months and agreed to monitor their progress over the next year. Phasing out fossil fuel subsidies 

is important because it encourages energy conservation, improves our energy security, helps us 

meet budget goals and provides a critical down payment on our commitment to reduce 

greenhouse gas emissions. A gradual multilateral removal (by 2020) of existing fossil fuel 

subsidies could result in global greenhouse gas emissions dropping by 10% by 2050 relative to 

what is otherwise expected. 

 

Leaders also agreed to take concrete steps to make the world’s physical oil markets more 

transparent and to continue to improve the regulation of financial oil derivative markets. These 

actions are expected to reduce the volatility of oil prices, thereby benefiting both energy 

producers and consumers. 

 

Phase Out Fossil Fuel Subsidies

 

At Pittsburgh last year, the G-20 Leaders committed to rationalize and phase out inefficient fossil 

fuel subsidies over the medium term. The G-20 countries subsequently have: 

• Put forward national strategies and timeframes to meet this commitment: G-20 

countries have developed individual strategies and timeframes for rationalizing and 

phasing out inefficient fossil fuel subsidies, and are now working on identifying the 

resources needed to implement national strategies. 

• Made substantial progress over the last 14 months. A number of countries have 

already made policy decisions in accordance with the G-20 commitment. In Mexico, the 

government has begun phasing out motor fuel subsidies while conducting a householdlevel census of fuel consumption that will allow the government to implement a welltargeted support program to compensate low-income households. In June 2010, India 

decontrolled gasoline prices and raised the prices for diesel, kerosene, and liquid 

petroleum gases (LPG). India also announced plans to phase out the remaining diesel 

subsidy in the medium term. This year, both Russia and China initiated programs raising 

the price of natural gas paid by their domestic consumers. 

• Committed to re-assess progress next year. The International Energy Agency (IEA), 

World Bank, and Organization for Economic Cooperation and Development (OECD) 

submitted to G-20 Leaders in Seoul a Joint Report updating an earlier analysis to reflect 

the new phase-out policies implemented this year. The report found that substantial 

progress had been made, but that the value of fossil fuel consumption subsidies remained 
over $300 billion in 2009, a heavy burden on government finances that displaces 

important public investments, worsens balance of payments, leads to underinvestment in 

infrastructure, and contributes to energy shortages. The G-20 leaders asked the 

international organizations to update their report and assess progress being made in 

advance of the G-20 Summit next year as a means of holding themselves accountable to 

their commitment to phase out fossil fuel subsidies. 

o The U.S. will do its part. President Obama is committed to working with 

Congress to phase out over $3 billion a year in preferential tax incentives for the 

coal, oil, and gas industries, consistent with the FY2010 and FY2011 budget 

proposals. 

Increase Oil Market Transparency

 

G-20 Leaders also took steps to reduce oil price volatility in the future. They asked international 

organizations to improve reporting on global oil production, consumption, and inventories as a 

means of increasing market transparency. They also called on regulators to implement 

International Organization of Securities Commissions (IOSCO) recommendations on improving 

commodity financial market data, market transparency, and regulatory cooperation and take 

steps needed to combat market manipulation by ensuring that they have the necessary legal 

framework to detect and take appropriate enforcement action. These efforts will help make sure 

energy markets work well and enhance market integrity. 

• Leaders asked the International Energy Forum (IEF), the IEA, and the Organization of 

the Petroleum Exporting Countries (OPEC) to identify specific steps that would improve 

the quality, timeliness, and reliability of the Joint Oil Data Initiative (JODI). 

• The United States, through the Dodd-Frank Act, has implemented important reforms to 

improve the transparency and oversight of OTC derivative markets, including OTC 

financial oil products.