On June 28, 2019, the National Assembly of France adopted a law on climate and energy policy aimed at achieving carbon neutrality by 2050. French Environment Minister François de Rugy said the adoption of the law makes France one of the pioneers in countries that have made specific commitments to the transition to carbon neutrality.

The main requirements of the new law are:

– deceleration of decline of the share of nuclear generation compared to previous plans, in view of its importance in achieving climate neutrality. Thus, reducing its share to 50% of total production is postponed to 2035;

– reduction of fossil fuel consumption by 40% by 2030 (against 30% in accordance with the previous legislation), which will include the cessation of electricity production using coal until January 1, 2022;

– intensification of the fight against irrational heat losses through the introduction of new incentive mechanisms, the period of mandatory thermo-modernization of the housing sector by 2028, and the development of five-year energy development programs by 2023 in accordance with the provisions of the law on climate and energy policy;

– introduction of new instruments of management and evaluation of current climate policy to achieve the specified goals: “green” budget, five-year roadmap for energy modernization of buildings, five-year climate program, improvement of corporate environmental reporting, etc.;

– improvement of the control of electricity prices, in particular, increasing the mandatory regulated price for NPPs from the current 100 TWh to 150 TWh;

– acceleration of the development of low carbon energy sources and renewable hydrogen.

In parallel with the drafting of a new law on energy and climate policy, the French government has begun to work on incentives for use of new energy industries for economic and industrial growth. Such promising industries include renewable energy, energy efficiency, energy storage, hydrogen technology and smart grids.

  According to the French government officials, domestic companies have significant advantages in the development of relevant areas due to their experience (Engie, EDF, Total), as well as the quality of research carried out in public and private laboratories.  In order to stimulate the development and overcome  inertia of business in the RES sector, a special contract was signed between a number of ministries, business representatives and trade unions – the so-called “new energy systems industry” agreement.  

Industry players have pledged to work towards a range of initiatives that will help achieve national carbon neutrality goals, including:

– accelerate the development of offshore wind power, the production of relevant goods and the provision of services;

– to ensure the profitability of methanization from renewable resources by 2030, as well as relevant technical and industrial proposals for the French market;

– to intensify implementation and increase support for the development of technologies for the production and storage of decarbonized hydrogen;

– to create a full cycle of energy-efficient solutions for the systematic reduction of energy consumption, in particular by implementing smart grids and digital energy management technologies;

– to conduct mass thermal modernization of public buildings using ESCO contracts;

– to expand cooperation with neighboring countries in order to standardize data exchange across networks and increase the demand for French companies’ services;

– to invest in the development of competitive battery production in France within the next five years;

– to support innovative industrial developments in the field of solar photovoltaic generation.

In turn, the French government has committed itself to draft the regulatory framework for new technological solutions and mobilizing private and public parties to implement them in a timely manner; to support the development of small and medium-sized enterprises as well as startups engaged in innovative technologies; to promote export opportunities for French business; to assist in the educational and professional development of professionals and to promote the maximum involvement of local business in competition in state tenders.