Fossil Fuel Industry Receives $35 Billion Each Year in Government Handouts

$4 billion added by Trump’s One Big Beautiful Bill Act

“Paying for Climate Chaos” reveals the staggering scope of federal government subsidies for fossil fuel production.

The U.S. federal government subsidizes the production of oil, gas, and coal by at least USD 30.8 billion per year, based on an average of 2024 and 2025 estimates.  Subsidy estimates are calculated based on the best data available from federal budget and tax commission documents, as well as additional research from other organizations, including Earth Track, the Institute for Energy Economics and  Financial Analysis, and the Organization for Economic Co-operation and Development. e A more detailed discussion of the methodology used in this report can be found in Appendix III.

This year, Congress updated the tax code and added an estimated USD 4.0 billion per year in new fossil fuel production subsidies. Adding these totals, it is reasonable to estimate that the U.S. federal government will subsidize the production of oil, gas, and coal by at least USD 34.8 billion per year in the coming years, as seen in Figure 4.

A full list of the subsidies included in the USD 34.8 billion total can be found in Appendices I and II.

The large majority of U.S. subsidies to fossil fuel production flows to oil and gas operations, while the remainder – still a very significant amount – serves to prop up the coal industry, as seen in Figure 5.

The United States spent billions per year subsidizing the exploration of new fossil fuel resources in 2024 and 2025, even though the science is clear that fossil fuel expansion must stop immediately, and more than half of the oil, gas, and coal in currently operating extraction projects must be left in the ground for a reasonable chance at limiting global temperature rise to 1.5°C.72 Importantly, this includes the need to avoid investing in new LNG infrastructure ⁷³

This figure is a conservative estimate and likely much higher, due to a lack of accessible, reliable data. It excludes tens of billions of annual state, county, and municipal subsidies for fossil fuel production as well as federal support in the form of international public finance, military expenditures to protect fossil fuel supply or markets, or environmental and health costs of fossil fuel pollution.

Key findings of the report include:

• The fossil fuel industry is set to receive $34.8 billion in handouts every year – over $4 billion of which were added by Trump and Republicans this year. These handouts have more than doubled since 2017, the last time Oil Change International studied the issue.
• Fossil fuel companies, which spend millions every year to rig our political system in their favor, receive a 30,000% return on investment in the forms of tax breaks, direct appropriations, cheap access to public lands, and other handouts from the federal government.
• If leaders fail to act, federal subsidies for fossil fuel production could soar to hundreds of billions of dollars per year in the coming decade. 
• Redirecting public money away from the fossil fuel industry could provide 3 million families with SNAP benefits annually, or help 54 million households install solar panels within a decade.

The report includes recommendations for reducing and eventually eliminating fossil fuel subsidies as quickly as possible (for full recommendations, download the report).