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Download Full Paper Here Green Finance and Investment and Finance Green Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries Green Finance and Investment This publication aims to provide the first comprehensive and consistent record of energy subsidies in the EaP region, with a view to improving transparency and establishing a solid analytical basis that can help Investment build the case for further reforms in these countries (this study covers Armenia, Azerbaijan Belarus, Georgia, Inventory of Energy Moldova and Ukraine). Based on OECD standard methodology, the study provides quantitative estimates of government support provided to consumers and producers of coal, oil and related petroleum products, Subsidies in the EU’s Eastern natural gas, and electricity and heat generated on the basis of these fossil fuels. This report also briefly looks at public support allocated to energy efficiency measures and renewable energy sources in the EaP countries, and discusses the taxation and energy pricing policies that underpin the analysis of energy subsidies. Partnership Countries This publication was prepared within the framework of the “Greening Economies in the Eastern Neighbourhood” (EaP GREEN) Project, supported by the European Union and co-ordinated with governments of the EaP countries and UN partners: UNECE, UN Environment and UNIDO. Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries Consult this publication on line at http://dx.doi.org/10.1787/9789264284319-en. This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information. isBN 978-92-64-28430-2 97 2017 72 1 P This project is 9HSTCQE*ciedac+ funded by the European Union Green Finance and Investment Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2018), Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries, Green Finance and Investment, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264284319-en ISBN 978-92-64-28430-2 (print) ISBN 978-92-64-28431-9 (PDF) Series: Green Finance and Investment ISSN 2409-0336 (print) ISSN 2409-0344 (online) The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm. © OECD 2018 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of the source and copyright owner(s) is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre francais d’exploitation du droit de copie (CFC) at [email protected]. ForeWord – 3 Foreword In order to help governments in the European Union (EU)’s Eastern Partnership (EaP) countries develop a better understanding of existing energy-subsidy schemes and their economic, social and environmental impacts, the Organisation for Economic Co-operation and Development (OECD) has conducted a regional study of such subsidies in the EaP region. The study aims to provide the first comprehensive and consistent record of energy subsidies in these countries, with a view to improving transparency and establishing a solid analytical basis that can help build the case for reforms in the EaP region. This study includes the six EU EaP countries, Azerbaijan, Armenia, Belarus, Georgia, Moldova and Ukraine. The analysis makes use of the method the OECD has been using to identify and quantify government support for fossil-fuel consumption and production in the Organisation’s 35 member countries and a number of large emerging G20 economies (Brazil, China, India, Indonesia, the Russian Federation and South Africa). The study also uses the price-gap approach developed by the International Energy Agency (IEA). The analysis presented in this study covers subsidies to consumers and producers of coal, oil and related petroleum products, natural gas, and electricity and heat generated on the basis of these fossil fuels. It also briefly looks at the subsidies benefiting energy- efficiency measures and renewable energy sources. In addition, the study discusses pricing and tax policies in the energy sector in the EaP countries. The analysis draws on a diverse body of publicly available sources and summarises the context, the state of play, and the mechanics of the complex and evolving landscape of energy subsidies in this region. The cut-off date for the data and information used in the analysis in this report is the end of 2015 unless otherwise indicated. The study relies on publicly available sources of information, such as public accounts, official documents related to subsidy monitoring and budget planning and reporting, tariff calculation methodologies, academic literature and media items. It also draws upon feedback received from stakeholder consultations in each of the EaP countries conducted in the course of 2016. In addition to individual country reports, the report contains a regional comparative overview chapter that summarises the main findings and conclusions from the country analyses. The report has been translated into Russian and the individual studies into the national languages of each of the countries, which are all available on the OECD website. The study was prepared within the framework of the project on “Greening Economies in the Eastern Neighbourhood” (EaP GREEN) Project, funded by the European Union and co-ordinated with governments of the EaP countries. EaP GREEN is implemented by the OECD in partnership with United Nations partners: the UN Economic Commission for Europe (UNECE), United Nations Environment and UN Industrial Development Organisation (UNIDO). The work on Moldova was also financially supported by the government of Norway, through its Ministry of Foreign Affairs. The views expressed here are in no way intended to reflect the official opinion of the European Union. INVENTORY OF ENERGY SUBSIDIES IN THE EU EASTERN PARTNERSHIP COUNTRIES © OECD 2018 ACKnoWLedgements – 5 Acknowledgements This report is a product of the collaborative efforts of many people. Given the complexity of the analysis, it would not have been possible without the dedicated and unwavering work of the project’s core team. The project was carried out by the Global Subsidies Initiative (GSI) of the International Institute of Sustainable Development (IISD), with support from Sigra Group (Norway). Ivetta Gerasimchuk managed the project on the GSI/IISD side and assembled a team of experts, who are due special thanks. The country studies were drafted and edited by: • Armenia – prepared by Tigran Sekoyan (Armenia) and Daniel Fjaertoft (Sigra Group), edited by Vibhuti Garg and Ivetta Gerasimchuk (GSI/IISD) • Azerbaijan – prepared by Ahmad Alili and Vugar Bayramov (Center for Economic and Social Development, Azerbaijan) and Daniel Fjaertoft (Sigra Group), edited by Ivetta Gerasimchuk (GSI/IISD) • Belarus – prepared by Andrei Malochka (Belarusian Heat-Energy Institute, or BELTEI) and Yuliia Oharenko (GSI/IISD), edited by Ivetta Gerasimchuk (GSI/ IISD) • Georgia – prepared by Giorgi Mukhigulishvili and Murman Margvelashvili (World Experience for Georgia) and Daniel Fjaertoft (Sigra Group), edited by Vibhuti Garg and Ivetta Gerasimchuk (GSI/IISD) • Moldova – prepared by Mihai Roscovan (Business Consulting Institute, Moldova) and Rafal Stanek (SST-Consult, Poland), with support by Olga Driga, edited by Nelly Petkova (OECD) • Ukraine – prepared by Yuliia Oharenko (GSI/IISD), edited by Ivetta Gerasimchuk (GSI/IISD). Lars Lunden and Martin Jaer, Senior Research Fellows of the Sigra Group, provided methodological support in applying the price-gap approach in the country analyses. Oleksiy Shapovalov provided input on the Eurasian Economic Union and its implications for energy markets particularly in Armenia and Belarus. The project was designed and its implementation overseen by Nelly Petkova of the OECD Environment Directorate, Green Growth and Global Relations Division (GGGR) who also put together the final report and prepared it for publishing. The authors are particularly grateful to our colleagues from the OECD Trade and Agriculture Directorate (TAD) who inspired our work and paved the way for this analysis. Our work follows the OECD methodology for analysing government support for the production and consumption of fossil fuels in the OECD countries developed by our TAD colleagues. The TAD group, led by Ronald Steenblik,
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