« Swap » : Reforming Butane Gas Subsidies to Invest in Solar Energy in Morocco

While butane gas remains the only fossil fuel still subsidized in Morocco, this report proposes a “swap” reform: gradually phasing out the subsidy and redirecting the funds toward solar technologies, which are more sustainable and cost-effective in the long term.

With an annual expenditure of nearly USD 1 billion, these subsidies place a significant burden on the national budget. However, reforming them remains a sensitive issue: rural households and small-scale farmers—who rely heavily on butane for cooking, hot water, and irrigation; would be the most affected without proper mitigation measures.

The report recommends targeted reinvestment in two solar solutions:

• Solar-powered agricultural water pumping, which is already cost-competitive but hindered by high installation costs,
  
• Solar-powered agricultural water pumping, which is already cost-competitive but hindered by high installation costs,and solar water heaters, whose deployment remains limited among low-income households.
  

To ensure the success of this reform, it is crucial to support vulnerable populations, mobilize social programs, and adopt a clear communication strategy that demonstrates how the savings generated will benefit the most vulnerable.

This approach would enable Morocco to reduce its emissions, stimulate green innovation, and strengthen energy resilience while protecting its most vulnerable citizens.