France’s bouclier tarifaire - the shield limiting energy bill increases - is set to be phased out in the coming years.
The electricity shield will be removed progressively and is expected to remain in place until the beginning of 2025.
The gas one will be stopped by the end of this year.
France’s finance minister, Bruno Le Maire, discussed the changes as part of his ‘roadmap’ for public finances for the rest of the government’s tenure.
“I give it two years, from now until the beginning of 2025, to remove the electricity shield,” he said.
Exceptional heating vouchers for wood and fuel oil will also be abolished this year, he said, although general energy vouchers will remain.
While the UK has acted to help households with soaring energy costs, gas and electricity bills are still more expensive there and its scheme is not as generous as the one in France.
Is the energy situation improving?
Initiated in October 2021, the electricity shield scheme prevented the rising cost of energy from being passed on to households in France, by regulating the amount energy bills could be increased.
The policy did not limit energy bills from increasing altogether, but restricted rises to 4%.
Any costs above this cap were shouldered by the state.
The energy shield cost the state €24 billion in 2022 and the policy subsequently changed to allow increases of up to 15% on bills in 2023.
With electricity production still precarious, however, the minister wants the shield to remain in place.
“[Electricity production is] a little below what we could expect, so that makes the rates even higher,” he said, with a number of France’s nuclear reactors currently shut down for maintenance.
The electricity shield will be removed progressively, “so as not to worry” households in France, with further changes in the rate expected between now and the policy’s end.
Gas shield will end this year
The shield against gas prices, however, will be lifted, thanks to the improving global situation.
Gas prices shot up as a result of the war in Ukraine, and the Russian decision to stop exports of gas to Europe.
The market has stabilised again, however, and prices “have returned to the pre-crisis situation, at €50 per megawatt hour", according to the minister.
No precise date was given, but Mr Le Maire said the gas shield would end “this year”.
‘We must end the chequebook policy’
Alongside the announcement, the minister also mentioned that the exceptional energy vouchers for wood and fuel oil-heated homes would end – although he did not say when.
These vouchers were introduced on top of the traditional chèque énergie vouchers and were for low-income houses that used either wood (logs, pellets, shavings, etc) or fuel oil (fioul) to heat their home.
“We must end the chequebook policy,” the minister said, hoping to save up to €30 billion by 2027, earmarked to reduce France’s deficit.
Avec @EmmanuelMacron, nous avons fait des choix économiques efficaces et massifs pour protéger le pouvoir d'achat des Français face aux crises du Covid et de l'inflation. Maintenant, nous devons rétablir nos finances publiques et accélérer le désendettement de la France. pic.twitter.com/OkhsRNOV5g— Bruno Le Maire (@BrunoLeMaire) April 21, 2023
Despite these exceptional vouchers coming to an end, the minister did not mention any changes to the traditional chèque énergie (energy vouchers) – which will begin to be sent out to households from Friday (April 21).
These vouchers can be worth up to €277 and be used to pay for energy bills, heating costs, or ecological home renovations.