Fossil Fuel Subsidies vs. the Renewable

31 Jul 2025

Fossil Fuel Subsidies vs. the Renewable "Witch Hunt"

By EV World Si | July 31, 2025

Contradictory U.S. Energy Policy

The Interior Department has launched a “witch hunt” against pro-renewable policies on federal lands, rolling back or reviewing incentives for wind and solar. At the same time, fossil fuels continue to enjoy long-standing tax breaks and leasing advantages, creating an uneven playing field in the nation’s energy transition.

Real Numbers: Fossil Fuel vs. Renewable Subsidies

Fossil Fuel Support: Roughly $20 billion/year in direct federal subsidies, including:
- Intangible Drilling Costs (IDC) deduction: ~$1 billion/year
- Percentage depletion allowance: ~$900 million/year for independent producers
- Public land leasing and other indirect supports: Billions more in below-market access and infrastructure
Renewable Energy Support: Wind Production Tax Credit (PTC) and solar Investment Tax Credit (ITC) together total ~$10–11 billion/year, designed to scale clean energy for grid decarbonization and EV charging.
External Costs: Studies including IMF analyses estimate total U.S. fossil fuel support (when accounting for environmental and health costs) at up to $760 billion annually.

In the Shadow of the Renewable “Witch Hunt”

Interior’s new rules require personal sign-off by the Secretary and elimination of policies deemed “pro-renewable.” This will likely slow or deter clean energy projects critical for powering EV charging infrastructure and reducing grid emissions.

Impact on EVWorld Readers and the Auto Industry

Grid Readiness: EV adoption depends on clean, reliable electricity. Delaying wind and solar approvals risks bottlenecking charging availability.
Investment Risk: Automakers and EV suppliers rely on stable policy signals to justify electrification investments.
Public Perception: Heavy fossil fuel support alongside renewable crackdowns undermines confidence in a genuine transition to clean transport.

Why This Matters

EVWorld readers—fleet operators, charging developers, clean energy advocates—depend on policies that align electrified transport with a decarbonized grid. Maintaining fossil subsidies while targeting renewables delays climate goals and EV market expansion.