In 2023, the tax expenditure on all fossil fuels for producers in the UK stood at $6.23 billion (constant 2020 USD). The forecast from 2024 to 2028 predicts a steady increase in tax expenditures, starting at $6.43 billion in 2024 and reaching $7.2 billion by 2028. This signifies a year-on-year increase of approximately 3.1% on average in these years, indicating a consistent upward trend in taxation expenses related to fossil fuel production. Over this five-year span, the compound annual growth rate (CAGR) is projected to be around 3.6%.
Future trends to watch for include the potential impact of legislative changes aimed at reducing carbon emissions, which may alter tax expenditure patterns. Additionally, shifts in energy policy towards renewable sources could influence future tax allocations on fossil fuels, potentially decreasing reliance on these energy sources and impacting expenditure levels
