Many countries face recurrent rounds of disruptions in fossil fuel supply chains. Conflicts, sanctions, and trade wars are constantly ambushing global markets, driving unpredictable spikes in prices, and making long-term fossil fuel infrastructure investments increasingly risky.
Pouring money into shoring up fossil fuel supplies has been standard practice. In 2024, at least USD 43 billion was spent on subsidies to fossil fuel production, plus around USD 300 billion in investments by state-owned energy enterprises and another USD 37 billion in international public finance. How can removing these supply-side subsidies help energy security?
Instead, governments’ state-owned enterprises and finance institutions need to invest in renewable energy and storage to diversify the domestic power supply. They need a technology-neutral approach to energy security.
Once installed, renewables and batteries provide price-stable domestic power for more than 20 years. Adding solar, wind, and storage diversifies the energy mix, improving resilience. The number one golden rule of energy security is diversification, according to Fatih Birol, head of the International Energy Agency, the world’s leader on energy security.
Unlike fossil fuels, renewable power is usually produced domestically and therefore directly benefits national energy supplies.
Even for producer states, fossil fuels — particularly oil and gas — are frequently sold on international markets at international prices and sometimes provide little or no benefit for domestic energy independence or affordability. For example, Nigeria is a major producer of crude oil, of which 97% is exported; meanwhile, 100% of petroleum products are imported, creating a major energy security vulnerability.
Many forms of clean energy, including storage, are already cheaper on a levelized cost basis than fossil equivalents. However, integration costs and long-term storage often require government support. It is to these areas that governments can redirect fossil fuel support to lay the foundations for a modern, clean, reliable energy system. Governments do not need to foot the whole bill — they can crowd in private investment with incentives, public finance, loan guarantees, and public–private partnerships, and by creating a stable policy environment for investors. But first, they need to phase out fossil fuel subsidies to encourage the shift.
Here is a list of articles selected by our Editorial Board that have gained significant interest from the public:
Accessibility: The distributed energy revolution
Over 700 million people currently lack access to electricity, mostly in sub-Saharan Africa and in rural areas. Connecting remote locations to the grid is expensive and slow, particularly for low-income nations. Long-range transmission lines are also vulnerable to damage, leaving rural communities at high risk of blackouts.
Fossil fuel subsidies for coal and gas power are therefore not the most efficient way to deliver electricity to these households. According to the International Energy Agency, solar-powered mini-grids and standalone systems are the best options for most communities that currently lack access to electricity. Shifting support from fossil fuels to distributed renewable energy can therefore help reduce rural energy poverty.
In India, supplying power to agricultural consumers and low-income households has resulted in huge subsidies for grid electricity, mostly from coal, which undermines the financial viability of the grid. Solar irrigation pumps and rooftop installations have become a key strategy for reducing these subsidies and providing a reliable power supply. Solar irrigation pumps can also deliver broader community benefits by powering “secondary uses” like grain mills and electric cookers.
Acceptability: Shifting support from pollution to solutions
Energy security is more than the availability of energy at reasonable prices; it also requires that the energy sources and use must come with acceptable impacts and risks. Subsidizing fossil fuels exacerbates greenhouse gas emissions, air pollution, natural resource exploitation, and associated social impacts on affected communities.
Clean energy also has negative environmental and social impacts, which need to be carefully managed. Renewable energy uses more land than fossil fuels, raising concerns about impacts on land quality and competition with other needs. Extracting and processing critical minerals, then disposing of technologies at the end of their life, further adds to their footprint.
However, unconditional subsidies for fossil fuels do nothing to bring about a more environmentally and socially responsible energy system. Whereas support for renewables — done right — can transition the world to a more sustainable system through incentives and regulations to improve component recycling, land-siting practices, and responsible mining.
Conclusion
Every energy crisis has seen governments pour more money into the fossil fuel system, seeking to shore up supplies and affordability. Following the 1970s oil crisis, some governments also invested in the cure: energy efficiency and renewables to break dependence on the volatile and geopolitically risky fossil fuel market. This investment is paying off.
Solar, wind, and battery storage are now highly affordable and offer a way out of fossil fuel dependency.
Fossil fuel subsidy reform can help this transition in two ways. First, simply by increasing prices, consumers and investors are encouraged to use less fuel and switch to alternatives. Second, the money liberated can be used to accelerate the transition to clean energy, which is getting cheaper and offers a future of price-stable, domestically produced, and clean energy, including for those in remote areas that currently lack electricity and clean cooking.
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