To increase understanding of the potential for phasing out fossil fuel subsidies, this chapter highlights evidence of their economic, social and environmental costs, as well as the benefits of, and opportunities for, reform. Fossil fuel subsidies can inhibit sustainable economic development by creating a burden on government budgets; discouraging investment in renewable energy and energy efficiency; increasing the risk of stranded assets (in the event of climate regulation); damaging public health by increasing air pollution; and undermining carbon price signals. This analysis then synthesises lessons from the literature, and from case studies on several countries that have undertaken subsidy reform, before setting out the key ingredients for successful reform. We find that despite the challenges associated with reform, several countries have recently made significant progress in reforming subsidies for fossil fuels across a wide range of sectors. This chapter discussed several cases which can help to identify the key ingredients for successful reform. The steps identified are very similar to those needed for any effective processes of policy change.