US Fossil Fuel Subsidies Total $35 Billion Annually After Recent Increase

A new report from Oil Change International reveals that the federal government currently subsidizes fossil fuel production by an estimated $34.8 billion annually, a figure that has more than doubled since 2017. The Trump administration's One Big Beautiful Bill Act (OBBBA), signed into law in 2025, added nearly $40 billion in new subsidies over the next decade, increasing annual fossil fuel subsidies by about $4 billion. These subsidies include tax breaks, reduced royalty rates for drilling on public lands, and incentives for carbon capture and hydrogen storage, which are projected to increase significantly in the coming years. Despite President Joe Biden’s prior commitments to end fossil fuel subsidies, recent legislation has continued to extend or introduce new incentives for the industry. The report criticizes the close relationship between the fossil fuel industry and political actors, highlighting massive spending by the industry to influence elections and legislation, notably benefiting Republicans and President Trump. The study urges federal lawmakers to repeal these subsidies to better fund programs for working families and address the climate crisis.