By Michael Elkins
Proposals released by French lawmakers on Monday suggest that the country could soon be offering tax breaks and subsidies for producing climate-friendly technologies in the country.
The French government is concerned that its companies could fall irrevocably behind U.S. rivals, boosted by the Biden administration's $430 billion Inflation Reduction Act. To avoid such a fate, Finance Minister Bruno Le Maire has tasked a group of lawmakers and business leaders to come up with proposals to keep French firms competitive and reverse a long-term deindustrialization trend in the country.
Proposals presented Monday included plans for tax credits and subsidies depending on the size of a company's investment or how much it produces in France. The measure could be offered as an advance payment to ensure the money flows quickly and targets producers of technologies such as batteries, next-generation nuclear plants, semiconductors, and more.
"Now is the time to find financing and invest. So, we want to put public money on the table," Le Maire told a conference where the proposals were presented. "We want to look at tax credits as a way to speed up the investments."
The proposals are subject to a public consultation before legislation is brought to parliament this summer and would be financed by reducing favorable tax treatment that some polluting industries currently have access to.
In particular, a tax break on fuel consumption, which currently benefits the airline and shipping industry, could be reduced and tax on highly polluting car models could be raised further, the proposals said.