Energy, fuel, transport: France’s ‘resilience’ financial aid plan

French Prime Minister Jean Castex announced last night (March 16) a new financial aid plan to help businesses and individuals hit by inflation and the economic consequences of the war in Ukraine, especially fuel cost rises.

Faced with a "crisis that will last for a long time", the prime minister stressed the urgent need to strengthen France's "technological, industrial and food sovereignty".

Economy Minister Bruno Le Maire said the plan was “not a new ‘whatever it costs’ plan [in reference to the government’s Covid-19 plan] but a targeted response” to the war.

Agriculture Minister Julien Denormandie and Ecology Minister Barbara Pompili were also at the announcement, which received support from President Emmanuel Macron.

The plan is set to help businesses and individuals who are particularly dependent on the costs of fuel, and who have been hit by other consequences of the conflict in Ukraine.

It will include:

• Help for households to replace old fossil fuel burning heaters
• State payment of excess costs to businesses that are high consumers of energy
• Specific aid for the farming and fishing industries
• Transport sectors will benefit from the government’s 15 centimes per litre discount on the cost of fuel
• ‘Fuel refund’ for vehicles running on natural gas
• Specific help for export companies
• Help for businesses looking to depend less on Russian materials
• Measures to help businesses transition to more eco-friendly fuel
• Extra help for more vulnerable sectors

Businesses who spend more than 3% of their total costs on fuel (gas or electricity) will receive help, “whatever the size of the business” in question, Mr Castex said.

To qualify, businesses will have to show that their fuel bill has risen by more than 40% since the start of the Ukrainian crisis, and they will also have to show that they have lost money as a result.

Mr Le Maire has estimated that this fuel plan alone will cost around €3 billion.

The cap on financial aid has been increased from 25% to 35% of the business turnover until the end of June this year. And from July 1, another budget will be available for businesses that have been “particularly affected” by the Ukrainian crisis, up to 10% of the businesses’ takings.

Extra help for households to replace fossil fuel boilers

With a view to making France less dependent on foreign gas, Ms Pompili announced a strengthening of the "MaPrimeRénov'" scheme, in order to support households in transitioning to "renewable heating solutions".

The aid granted will be increased by €1,000 euros, from April 15 to the end of 2022.

"The total aid available will be up to €9,000 euros," the minister said. At the same time, "the flat rates for the installation of gas boilers will be stopped".

Farming and fishing

The fishing sector will receive “exceptional financial aid, equivalent to 35 centimes per litre of fishing diesel", from today, Mr Castex said.

Farming will receive help, over four months, of 400million to compensate for losses due to the “rising costs of animal feed”, and “25% reimbursement of the domestic tax on the consumption of energy products (TICPE) for non-road reasons”.

Transport

The 15 centimes refund on each litre of fuel announced at the weekend will also “benefit transport companies," Mr Castex said.

Transport Minister Jean-Baptiste Djebbari is also due to meet with industry representatives soon to help provide them with better support as prices rise.

‘Fuel discount’ extended to natural gas and LPG

The 15 centimes per litre discount on fuel prices will be extended to "natural gas vehicles (NGV) and liquefied petroleum gas (LPG)".

The prime minister said he also expects distributors to "contribute to this scheme, to go beyond" the 15 centimes expected so far. He said: "The Total group has already given its agreement in principle to go beyond the 15 centimes”, he said.

Read more: Fuel prices in France: TotalEnergies to offer an extra 10 centimes off

Read more: French fuel prices to be reduced by 15 euro cents per litre in April

Subsidies for companies trying to reduce dependence on Russian raw materials

A "call for tenders" will be launched to "subsidise, until the end of the year", the projects of companies that are aiming to eliminate dependence on Russian raw materials.

These subsidies will reach "15% for large groups and 35% for small companies", Bruno Le Maire said.

In addition, ministers are set to submit proposals to Mr Castex to develop "alternative sources of supply" for critical materials such as nickel, copper, aluminium, and titanium.

Medium-term measures to improve eco-friendly transition

Mr Castex cited the EU's objective of moving away from Russian oil and gas by 2027, and called for increased importation capacity for liquefied natural gas (LNG) and increased biogas production.

Gas stocks will be replenished "from this summer", said Ms Pompili, alongside extra measures to speed up the development of renewable energies.

Targeted support for weakened sectors

Lastly, other sectors were also mentioned. Mr Le Maire notably outlined certain measures for the building and public works sectors, calling for companies to be able to amend contracts and clauses in order to take account of “massive cost increases".

The minister also called on companies "to show solidarity", and recommended that companies work to take account of high price increases into their contracts with VSEs and SMEs.

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