   
  
JOB/GC/264/Rev.2  
 
27 October  2021 
(21-8121) Page: 1/2 
General Council  Original: English  
 
 
PROPOSED FOSSIL FUEL SUBSIDIES MINISTERIAL STATEMENT  
Revision  
The following communication, dated 25 October  2021, is being circulated at the request of the 
delegations of Chile, Costa Rica, the European Union, Fiji, Iceland, Liechtenstein, the Republic of 
Moldova, New Zealand, Norway, Switzerland  and Uruguay . 
 
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FOSSIL FUEL SUBSIDIES MINISTERIAL STATEMENT  
We, the Ministers representing the following Members of th e World Trade Organization (WTO): […] 
issue this statement at the WTO 's Twelfth Ministerial Conference (MC12):  
 
1. Recognizing  that inefficient fossil fuel subsidies encourage wasteful consumption, disadvantage 
renewable energy, and depress investment in ener gy 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' comm itment 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 tem perature 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 pot ential 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. Acknowledging  that accelerating the r eform 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 been explicitly identified 
as a p owerful 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 caused by fossil fuel subsidies b y achieving effective disciplines 
on inefficient  fossil fuel subsidies;  JOB/GC/264/Rev.2  
 
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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 alon g a clear timeline 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 account the speci fic 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 the ev aluation 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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