Member countries of the G20 group of major economies last year provided the highest level of financial support to the fossil fuel sector since 2014, according to a new report from BloombergNEF and Bloomberg Philanthropies.

The report found that the 19 countries — the twentieth is the EU — stumped up $693bn in subsidies to oil, gas, coal and fossil-fuel power in 2021, up 16% year-on-year, drawing concern that many nations are backtracking on their climate action pledges.

The BloombergNEF Climate Policy Factbook, released yesterday (Tuesday), evaluated progress that the G20 nations have made in phasing out support for fossil fuels, putting a price on emissions and enforcing climate-risk disclosure.

Although 2020 support was around $598bn, possibly lower due to reduced energy use during the Covid pandemic, the report asserted that 2021’s increase was not just due to economic recovery because the levels were 5% higher than those of 2016, during which energy demand was similar.

“Governments continue to subsidise fossil fuels – undermining the pledges they’ve made, harming public health and shrinking our chances of avoiding the worst impacts of climate change,” said Michael Bloomberg, the UN Secretary General’s special envoy on climate ambition and solutions, and founder of Bloomberg and Bloomberg Philanthropies.

“We need to dramatically speed up the shift to clean energy and away from coal and other fossil fuels, and this report highlights some of the most important steps governments can take.”

The report found that G20 nations have made progress in reducing coal’s share of fossil fuel investments — from 4.1% in 2016 to 2.9% in 2021 — but that nonetheless even coal still saw $20bn of government subsidy in the group last year.

“The G20 and G7 governments have announced a range of seemingly more ambitious commitments to phase out fossil-fuel subsidies,” said Victoria Cuming, head of global policy at BloombergNEF and lead author on the report.

“But they always seem to include imprecise language and caveats, giving governments wiggle room to interpret these pledges as they wish. BNEF’s analysis shows that there seems to be little evidence of those countries delivering on their promises.”

BNEF used the report to call for faster progress in the areas of carbon pricing, flagging in the report that only 12 G20 member countries have such a mechanism in place, and climate-risk disclosure, where only two - the EU and the UK - have passed laws or regulations to mandate disclosure for investors.

Germany, Italy, Mexico, the UK and the US were each spotlighted as having made “progress” in phasing out support for fossil fuels, by the report authors, unlike Australia, Indonesia, Russia and South Korea.

The report said Canada, France, Germany, Italy, South Africa and the UK all made progress in carbon pricing plans, while Brazil, India, Saudi Arabia and Turkey fell short in this area.

For climate-risk disclosure, more countries made insufficient progress in 2021, France, Germany, Italy and the UK made progress, while Argentina, Australia, Canada, China, India, Indonesia, Russia, Saudi Arabia and Turkey fell short, the report claimed.