Subsidies in the energy sector can harm or benefit the environment. Environmentally harmful are those subsidies that lower the price of environmentally harmful energy by changing the relative relations between energy prices to the benefit of the resource that is subsidized; this causes an over-demand of energy that is harmful to the environment. Environmentally friendly are those subsidies that are intended for the use of sustainable energy sources, since the latter are less harmful to the environment – such as conventional energy sources. Subsidies can have an influence on a decrease of the price of such energy and can improve its competitiveness with regard to environmentally harmful energy.

At the level of EU countries, there is no common agreement regarding the definition of subsidies in the energy sector. The term subsidy most frequently includes direct payments to an energy producer or consumer; however, subsidies can also include other, less transparent forms of aid or supporting mechanisms, such as exemption from the payment of taxes and discounts, control of prices, restrictions in trade, restrictions in entering the market, etc. One of the forms of subsidizing is also that the state, with its tax policy, inefficiently eliminates market irregularities, since energy taxes insufficiently include external costs of energy production. Notwithstanding the mechanism of subsidies, we are dealing with two forms of subsidies - »on-budget« subsidies and »off-budget« subsidies. The first ones represent a direct burden to the budget, while the latter ones are paid out through other sources and methods.

The data sheet indicates the data on subsidies in the energy sector; the data were obtained from the records of the Ministry of Finance. The data include forms of aid that were allocated to companies, the basic activity of which is coal mining, electricity and heat production, natural gas distribution; such forms of aid include all categories of state aid (aid to research and development, aid for small and medium enterprises, aid for restructuring, employment, training, energy savings and environmental protection, regional aid). The data sheets also indicate the data on non-refundable funds that were allocated by the Ministry of the Environment and Spatial Planning to legal and natural persons for implemented measures of efficient use and renewable energy sources and for promotional and educational activities as well as funds (in the amount of a subsidized interest rate) that were allocated by the Eco fund for investments in the area of air and climate protection. Data sheets also include allocated funds in the area of priority dispatching of electricity. These data are not included in the records of state aid, since priority dispatching was not considered as state aid until 2007; in accordance with a decision of the European Commission on the scheme of state aid, priority dispatching of electricity must also be considered as one of the forms of state aid.