Oil and gas contribute hundreds of billions of euros to European government revenues every year, a new study shows, highlighting how the industry – far from being subsidised – crucially boosts public finances in the European Union and Norway.
Energy taxation and subsidies in Europe, a study commissioned by the International Association of Oil & Gas Producers (OGP) and carried out by independent consultant NERA Economic Consulting, sheds new light on the financial contributions and subsidies in the European energy sector.
OGP commissioned the research in a bid to show the facts about European government subsidies to energy industries, as the issue is intensely debated, with conflicting numbers and complicated methodologies. “Reliable figures are crucial now, as the European Union looks at state aid, energy costs and consumer protection policies in a bid to protect household bills, preserve industrial competitiveness and ultimately define Europe’s long-term climate and energy policy,” Roland Festor, OGP’s EU affairs director says.
The consumption of one barrel of oil generates US$124 in government revenue. This contrasts with the consumption of an equivalent amount of energy generated by renewables, which in some cases can cost tax payers over US$700 the study shows.
Oil and gas contributed €433 billion to the EU and Norwegian government treasuries in the reference year 2011 (the latest year for which comprehensive data was available) and received €0.6 billion, making it a net contribution of €432 billion. These numbers are in contrast to the prevailing assertion that oil and gas received billions of euros in subsidies across the EU in 2011.
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Oil and gas boost European treasuries by over US$545 billion a year