The IEA Government Energy Spending Tracker, formerly the Sustainable Recovery Tracker, provides periodic updates on the latest approved policies and their expected fiscal contributions to energy. The latest update, issued in June 2023, focuses on tracking two types of spending policies:
- Clean energy investment support, including measures to support investment in energy infrastructures, renewables, electrification, efficiency, and supply chains in the energy sector; and
- Short-term energy affordability measures are aimed to help shield consumers and industries facing soaring energy prices.
The latest update to the Government Energy Spending Tracker policies database tracks almost 1,600 government financial measures from 68 countries, all of which are available in the IEA’s Policies and Measures (PAMS) database.
This report is part of the IEA’s support of the first global stocktake of the Paris Agreement, which will be finalized in the run-up to COP28, the next UN Climate Change Conference, at the end of 2023. Find other reports in this series on the IEA’s Global Energy Transitions Stocktake page.
PublishedJune 2023License CC BY 4.0 Supported by
- Clean Energy Transitions Programme
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- The June 2023 update of the IEA Government Energy Spending Tracker finds USD 1.34 trillion allocated by governments for clean energy investment support since 2020. Government spending has played a central role in the rapid growth of clean energy investment since 2020, which rose nearly 25% from 2021 to 2023, outpacing growth in fossil fuels in the same period. Around USD 130 billion of new government spending to support clean energy investments was announced in the last six months – among the slowest periods for new allocations since the pandemic. This slowdown may be short-lived, however, as a number of additional policy packages are being considered in the European Union, Australia, Brazil, Canada, and Japan. The newest outlays identified are predominately aimed at boosting mass and alternative transit modes, low-carbon electricity generation projects, and low-carbon vehicle sales. Among all measures tracked since 2020, direct incentives for manufacturers aimed at bolstering domestic manufacturing of clean energy now total around USD 90 billion.
- Since the start of the global energy crisis, governments have also allocated USD 900 billion to short-term consumer affordability measures, in addition to pre-existing support programs and subsidies. Around 30% of this affordability spending has been announced in the past six months. Despite calls to better target households and industries most in need, only 25% of affordability measures are targeted toward low-income families and the most impacted industries.
- The European Union is responsible for two-thirds of government affordability support worldwide, having borne some of the steepest increases in electricity and gas prices in 2022. Levels of consumer support spending have also increased in emerging and developing economies, largely through governments compensating energy companies for operating losses borne by keeping prices stable during the energy crisis. As a result, governments in emerging markets and developing economies have dedicated more to consumer affordability measures (USD 140 billion) than to clean energy investment support (USD 90 billion) since 2020.
- Emergency measures played an important role in shielding consumers from energy price spikes. Still, they weighed heavily on government balance sheets as fossil fuel subsidies reached a record high in 2022. This could threaten some countries’ ability to balance short-term relief with parallel efforts to address energy security and affordability through improved energy efficiency and clean energy investment. This balance is particularly difficult in emerging markets and developing economies due to pre-existing financial strains. Accordingly, the vast majority of spending on both affordability and clean energy remains concentrated in advanced economies, which now account for 93% of total government pure energy investment support and 85% of consumer affordability support tracked to date.
Key findings
Browse more than 1,600 national government financial measures, spanning more than 68 countries, underlying the IEA Government Energy Spending Tracker.
Explore the policies database.
Since the start of the global energy crisis, governments have allocated USD 900 billion to short-term consumer affordability measures. This affordability spending continues to climb, with over USD 270 billion allocated in the last six months, even as prices, notably in Europe, have begun to wane, albeit remaining well above historic levels.
New allocations for clean energy investment support totaled almost USD 130 billion in the past six months, making it one of the slowest periods of activity since Q2 2020. This runs counter to stated government intentions to accelerate clean energy transitions to manage exposure to global fossil fuel markets, notably plans like REPowerEU to cut natural gas use this decade drastically. However, a number of packages remain under discussion, which could increase this total in the coming year.
The last six months continue trends seen since the start of the tracker. The spending mobilized in advanced economies far outstrips that put forth in emerging market and developing economies (EMDEs). Advanced economies account for 93% of total government clean energy investment support and 85% of consumer affordability support.
Over the last six months, the global energy crisis has prompted a continued rise in emergency spending to manage affordability.
Government spending for clean energy investment support and crisis-related short-term consumer energy affordability measures, Q2 2023
- Global government clean energy investment support
- Global government energy affordability spending
Affordability spending loomed large in recent months, even as prices began to wane in wholesale markets. This tally captures all government-enacted spending to help consumers manage costs, including direct grants, vouchers, tax reductions, and price regulations. Announced government affordability measures often do not provide the full picture, as many pre-existing price regulations resulted in record levels of fossil fuel subsidies in 2022, which either continue to be tacitly borne by governments or state-owned energy companies and often are felt as foregone revenues from not selling oil and gas resources at global market prices. The tracker does, however, capture government-approved direct transfers from governments to energy companies to cover losses caused by mandated price regulations. In addition, governments also mobilized broader consumer support to combat general inflation, which, if considered, would also substantially increase the total.
Taken together, measures have been effective in shielding consumers from the price shocks seen in global fossil fuel markets, but still, many households felt the crisis draw upon their finances. In 12 countries representing nearly 60% of the worldwide population, average households saw their share of income going to home energy rise in 2022, despite substantial government intervention, as energy prices outpaced wage increases. Impacts were even larger for poorer households, as they typically spend a higher share of income on energy.
European Union countries are now responsible for two-thirds of total affordability measures. Germany is the largest single contributor to this total and is estimated to be on track to spend around one-half of its EUR 200 billion economic shield (Abwehrschirm) budget envelope approved last October. Croatia, Poland, Italy, and the Czech Republic represent the next largest new packages of affordability measures in the European Union. Outside the European Union, Australia made recent announcements in their 2023-2024 budget, which, if adopted, would release AUD 3 billion towards energy price relief.
