Net carbon price (real 2022 US$/tCO2eq)

Negative impacts of fossil fuel use borne by society (i.e. externalised costs) can be addressed in part by ensuring adequate carbon pricing mechanisms to better reflect the true social cost of carbon. However, such mechanisms are still not present in many European countries. Out of 53 countries in the WHO European region analysed as part of the Europe report of the Lancet Countdown (2024), (van Daalen et al., 2024) 32 (60.3%) had such mechanisms in place in 2020 with only 14 countries (26%) having net-positive carbon prices which encourage phasing out of fossil fuel use. On the other hand, 29 countries
(54.7%) had net-negative carbon prices, actively encouraging fossil fuel use (van Daalen et al., 2024). For countries providing net fossil fuel subsidies, the median value of subsidies was €0.70 billion. Progress towards phasing out fossil fuel subsidies differs across Europe, with net fossil fuel subsidies declining in 33 countries, but increasing in ten others between 2010 and 2020.

Progress to remove subsidies in the EU-27, while still too slow, is better than the broader WHO European region; 44% of EU member states had net-positive carbon prices discouraging fossil fuel use. However, 13 EU members (48%) continue to subsidise fossil fuels with net-negative carbon prices. Financing from carbon pricing can be redirected to increase affordability of clean renewable energy, ensuring that the transition away from fossil fuels does not increase energy poverty.