To Save Nature, Countries Should Eliminate Subsidies that Harm Forests

Biomass power plants in the U.K. and Europe are burning wood from forests. Despite being more emissive than fossil fuels, burning trees is classified as renewable and zero carbon in these countries. Large-scale bioenergy, across 12 European countries and the U.K., received €3.9 billion of government support in 2024. 

In addition to this, the industry receives what amounts to a massive tax break of a couple billion per year (€2.4 billion in the U.K. and €1.3 billion in the E.U. each year). This is because bioenergy is wrongly classified as carbon-neutral, and thus does not pay taxes on U.K. and E.U. carbon markets (Emissions Trading Systems). 

This wood—many millions of tonnes every year—comes from forests in Europe and North America, harming nature and wildlife in those forests. The pollution from biomass power plants and wood pellet mills harms people’s health and burning woody biomass is bad for the climate, increasing carbon dioxide in the atmosphere for decades or centuries.

Billions more are being paid out in subsidies to other sectors that harm forests, according to the report. These industries—like building houses and roads or logging trees for furniture and farming—are driving forest loss in the U.K. and Europe and in the countries they import from. Agriculture and infrastructure are the two forest-harming sectors receiving the most subsidies, totaling €6 billion a year from 2023–2025. The impacts range from destruction of Sweden’s old-growth forests to build new power lines to deforestation in South America to grow soy feed for cattle in France.

From 2023–2025, governments handed out €18 billion of forest-harming subsidies. For the U.K. and E.U. to achieve Target 18, these subsidies must be phased out. But the analysis shows they’re not: They were the same in all three of those years.

Since the incentives and subsidies driving forest loss come from governments, it’s within governments’ power to remove them. The first global review of progress on biodiversity targets says that little progress has been made in removing harmful incentives or scaling up positive finance for nature, aligning with the findings of our analysis. Here are five things countries should do at October’s CBD meeting if they hope to achieve this goal:

1. End subsidies that harm forests. As mentioned above, this report shows that approximately 15 countries subsidize forest loss and harm with more than €10 billion per year. Just think how much nature restoration could be achieved with those funds. The forthcoming forest road map (launched by the Brazil government at COP30 last year) should identify subsidy reform as a priority. Efforts to join up action across the United Nations climate process and U.N. biodiversity process should prioritize financial reforms.

2. Proactively identify harmful subsidies and root them out. Many governments (including the U.K. and E.U.) have signed on to Target 18 and must, therefore, collectively reduce environmentally harmful subsidies by $500 billion per year, globally. This won’t happen passively—governments must develop and run active programs to identify these subsidies, categorize them, and end them. At present, a lack of data on harmful subsidies has been identified as a key barrier to phasing them out. More analyses, such as the one we conducted, would fill these data gaps, but it should not be up to civil society to provide this data when governments should be leading the way.

3. Coordinate action across governments. The draft global review of progress identifies coordination across governments as a barrier to phasing out harmful subsidies. Governments in Europe should ensure that finance, housing, and energy ministries work closely with forestry, farming, and environment ministries so that economic development and support align with environmental targets and strategies.

4. Increase funding for nature restoration and protection. This analysis found that subsidies driving forest harm are larger than the E.U. LIFE (L’Instrument Financier Pour l’Environnement or Financial Instrument for the Environment) program’s entire budget, which funds climate and nature actions. When harmful subsidies are reduced, that money must be redirected toward existing projects and programs benefitting nature, like the LIFE program, and must be distributed equitably between the Global South and the Global North. 

5. Implement laws that protect nature. Preventing harm to forests can come from nature laws. But they must be strong, and they must be properly enforced. Analysis has found that voluntary approaches to protecting nature simply don’t work when compared to laws and regulations. The European Union deforestation regulation, which is designed to prevent any deforestation or degradation involved in E.U. supply chains, could provide critical protection for forests. But the law has been delayed and weakened, several times. The analysis also found that laws intended to protect nature—for example, when house building happens—aren’t being properly implemented.