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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure FR-2022-49/3087 – measures in France

State aid to reduce energy bills for businesses

Aide de l'Etat pour réduire les factures d'énergie des entreprises

Country France , applies nationwide
Time period Temporary, 30 November 2022 – 31 December 2023
Context War in Ukraine
Type Legislations or other statutory regulations
Category N/A
– Support for energy bills
Author Frédéric Turlan (IRshare) and Eurofound
Measure added 19 February 2023 (updated 21 March 2023)

Background information

On 27 October 2022, the government announced new aids to support businesses and local authorities in the face of soaring energy bills.

The first scheme came into force on 1 January 2023 and was named "electricity shock absorber". It aims to have the State pay part of the 2023 bill for some of the institutions without access to the tariff shield set up for individuals.

The second measure consists of simplifying an existing system for companies to obtain aid on their energy bills.

Content of measure

The "electricity shock absorber" aims to have the State pay part of the 2023 bill of small and very small businesses, but also of local authorities, hospitals, universities and associations, which do not have access to the tariff shield . The State will split their electricity bill: one part (between 40 and 60% approximately) is invoiced by the suppliers at the advantageous Arenh rate (regulated access to historical nuclear electricity), the other is exposed to market prices. The State will pay up to 50% of the part of the electricity bill of companies exposed to market volatility, when the invoiced price exceeds €325 per MWh, with a ceiling set at €800 per MWh. The reduction is automatic on invoices and the compensation is paid directly to suppliers by the State.

On 29 November 2022, the government presented adjustments to the "electricity shock absorber" designed to help very small businesses, SMEs and local authorities without a tariff shield to cope with the rise in electricity prices. To be eligible, SMEs must have fewer than 250 employees, a turnover of €50 million and a balance sheet of €43 million. On the other hand, VSEs that consume less than 36 kilovoltamperes are already eligible for the "tariff shield". According to the new criteria announced, the aid will concern entities paying more than €180 per MWh (excluding tax and CSPE) for their electricity. This floor required for access to the aid was lowered after protests from elected representatives (the government had previously set it at more than €325 per MWh). Above €180 per MWh, the State will pay 50% of the amount affected by the price hike, up to a ceiling finally reduced to €500 per MWh (compared with the €800 in force until now). According to the Ministry of Energy Transition, this aid should represent about 20% of the amount of the bill.

The second measure is to simplify an existing system that is far too complex and therefore underused. By the end of November, a one-stop shop will enable companies whose energy bills have increased by at least 50% by 2022 to obtain aid, with the possibility of requesting an advance payment. This window is mainly intended for medium-sized companies, but the others will also have access to it for gas. The existing ceilings will also be raised and a company will be able to receive up to €150 million in aid.

Both measures will have a budget of almost €12 billion.

Use of measure

No data.

Target groups

Workers Businesses Citizens
Does not apply to workers SMEs
One person or microenterprises
Other businesses
Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement as case not in social partner domain No involvement as case not in social partner domain
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

No involvement.

Views and reactions

No data.

Sources

Citation

Eurofound (2023), State aid to reduce energy bills for businesses, measure FR-2022-49/3087 (measures in France), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/FR-2022-49_3087.html

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