France: What to remember from the government's green industry project

The French Minister of the Economy, Bruno Le Maire, surrounded by his counterparts in Industry, Roland Lescure, and Ecological Transition, Christophe Béchu, on May 16, 2023 in Paris. AFP - GEOFFROY VAN DER HASSELT

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The objective is to promote a carbon-free reindustrialization of France and to respond to the massive support of the US "Inflation Reduction Act" (IRA), a plan adopted a few months ago, which is shaking up the global situation in this area.

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Funds to "clean up" wastelands, tax credits to attract industrial investment in sectors such as batteries... After the pension reform, the executive is embarking on another battle: the carbon-free reindustrialization of France. The government presented its draft law on green industry to the Council of Ministers on Tuesday, May 16.

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We now want to accelerate by using (...) climate change as a lever for decarbonization and reinvestment in France," explained Economy Minister Bruno Le Maire.

To promote the establishment of new industrial sites, the bill intends first of all to halve the authorization procedures, to a maximum of nine months. One billion euros is planned to "depollute" wastelands, with the objective of preparing 50 pre-developed turnkey sites.

The objective is to respond to the very proactive policy of the US "Inflation Reduction Act" (IRA) in this area, a "green industry tax credit" will be created to attract industrial investment in sectors such as batteries, heat pumps, wind turbines or solar panels. This tax credit will cover 20% to 45% of investments made, taking advantage of a recent relaxation of European state aid rules for green technologies. The government hopes to invest €20 billion by 2030 and create tens of thousands of jobs. At stake: avoiding the relocation of European green industries, attracted by large subsidies across the Atlantic and cheap energy.

Vincent Charlet, general delegate of the think tank La Fabrique de l'industrie, stresses that beyond the IRA, the problems for the European industrial sector lie elsewhere, on the Chinese side. "In the case of the automobile for example, like Joe Biden in his time, the President of the French Republic has announced conditions in the allocation of bonuses for the purchase of electric vehicles," he said at the microphone of Anne Verdaguer, of RFI's Economy Department. In reality, today for the French or European automotive sectors, it is rather from China that the first of the competitive threats comes, and the announcements of recent days are rather a response to Chinese commercial aggressiveness than to the IRA as such. But giventhat France and Europe will not have succeeded in regaining a clear and readable framework for ten years of conditions of access to low-carbon and cheap electricity, then the development of industry in France and Europe is compromised.

At zero cost

If it has not provided an overall amount for this device which will be decided "project by project", the Ministry of the Economy has indicated that it will be compensated by the reduction of "brown" tax loopholes, that is to say the advantages granted in particular to fossil fuels. The ecological bonus for the purchase of an electric car will be reformed to take into account the carbon footprint of their production. Decarbonisation subsidies are also planned for existing industries, as well as €700 million for training.

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We want to give ourselves the best chance of having green industrial sectors on our territory," insisted Bruno Le Maire. "This is a battle in which no one is giving themselves a gift to attract investment at home, jobs at home, technologies at home," he added, justifying the use of public subsidies to attract projects, such as a ProLogium battery factory in Dunkirk.

However, the government wants measures in favour of green industry to be done at zero cost for public finances in bad shape, which it has committed to straightening over the coming years. The questions of costing will be debated in the context of the next finance law. In addition to public funds, it also intends to mobilize private savings via a new "future climate savings plan" for miners, the annual collection of up to one billion euros. This savings plan, whose remuneration should be higher than that of the Livret A, will benefit from a guaranteed capital and will be exempt from tax and contributions, with a ceiling of around 23,000 euros.

The bill will arrive on July 17 at the National Assembly according to Bercy. In the absence of a majority, the presidential camp will have to convince beyond its benches to adopt its text.

On the side of the Insoumis, we already denounce a "communication operation". "It's always the same recipes," denounces MP Mathias Tavel, at the microphone of Pierrick Bonno of RFI's political department: tax credits, administrative simplifications, the mobilization of private savings at the whim of banks and insurance companies; There is no public capital, there is no real planning, there is no protectionism, there is no employee participation in this bill.

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With AFP)

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