Aid to Companies in France 2022/2023Share on LinkedIn
7 Dec 2022
The information compiled below comes from the latest official communiqué published on 29 November 2022. To date, we are awaiting the publication of the implementing decrees.
The French government has put several measures in place to support companies in the face of rising electricity and natural gas prices.
REMINDER - March to August 2022: An aid window for the payment of electricity and natural gas invoices (introduced in July 2022 as part of the Resilience Scheme)
For the periods of March to May 2022, and June to August 2022, companies that meet the following conditions are eligible for this aid:
- Their main activity isn’t electricity or heat production or the operating of lending and/or financial institutions;
- Their gas and/or electricity purchases in 2021 amounted to at least 3% or more of the turnover in that year;
- They must have suffered, in one of the months of the eligible period, a doubling in the price of their gas and/or electricity compared to the average price they themselves recorded over the entire 2021 calendar year.
For the periods March to May 2022, and June to August 2022 three aid schemes were introduced:
- Scheme 1: capped at 2M €, for companies having experienced a 30% drop in gross operating profit (EBITDA) compared to 2021 or a negative EBITDA; aid is set as 30% of total eligible costs;
- Scheme 2: capped at 25M € for companies with a negative EBITDA and an increase in eligible costs totaling at least 50% of the absolute value of the EBITDA; aid is set at 50% of the eligible costs within the limit of 80% of the absolute value of the EBITDA;
- Scheme 3: capped at 50M € for companies listed in Annex 1 of this decree, with a negative EBITDA and an increase in eligible costs amounting to at least 50% of the absolute value of the EBITDA; the aid is equal to 70% of the eligible costs within the limit of 80% of the absolute value of the EBITDA.
September - October 2022: A simplified aid window for the payment of electricity, natural gas, heat and cold invoices.
All companies can apply for this program until 31 December 2022, with individual aid ranging up to 4M €. It should be noted that from this period onwards, purchases of heat and cold generated via the use of natural gas or electricity are now eligible.
This aid can be claimed on the following website: https://www.impots.gouv.fr/professionnel
For claims relating to the months of September and October 2022, applications opened on 19 November. The window for the following period (November - December 2022) will be in early 2023.
The criteria for eligibility were simplified. From now on, in order to get aid:
- The energy price during the period applied for (September/October 2022 to start with) must have increased by 50% compared with the average price the applicant paid in 2021;
- Energy expenditure during the application period must be greater than 3% of the 2021 turnover (e.g. if you are applying for aid for the period September/October 2022, your energy expenditure over this period must represent more than 3% of your September/October 2021 turnover. Companies have the choice of comparing their energy invoices to the September/October 2021 turnover or to the prorated 2021 turnover).
In order to determine the amount of aid you can expect, determine the amount invoiced in the same period in 2021 and increase it by 50%. Aid will amount to 50% of the difference between that amount and the amount invoiced in 2022, within the limit of 70% of the 2021 cost.
For companies with higher energy expenditure, enhanced support can reach 50M € (i), and up to 150M € for sectors at risk of carbon leakage (ii). The criteria are:
- The energy price during the application period (September and/or October 2022) must have increased by 50% compared with the average price paid in 2021;
- Energy expenditure in 2021 represented at least 3% of turnover in that year OR energy expenditure in the first half of 2022 represented at least 6% of turnover in that six-month period;
- The Gross Operating Profit is either negative or down by 40% over the comparable span of time.
(i) Scheme 1: capped at 50M €. Determine the amount invoiced in the same period in 2021 and increase it by 50%. Aid will amount to 65% of the difference between that amount and the amount invoiced in 2022, within the limit of 70% of the 2021 cost.
(ii) Scheme 2: capped at 150M €. Determine the amount invoiced in the same period in 2021 and increase it by 50%. Aid will amount to 65% of the difference between that amount and the amount invoiced in 2022, within the limit of 70% of the 2021 cost.
Concerning the natural gas invoice:
All companies can access the same aid window capped at 4M €, 50M € and 150M € with the same simplifications until 31 December 2022.
Year 2023: Aid package for businesses for the payment of electricity and natural gas bills
All companies will continue to benefit from the reduction in the electricity tax (TICFE) (rate reduced to a maximum of 0.50 €/MWh)
The Shield Rate
The 1.5 million very small businesses (VSE) with fewer than 10 employees, 2M € in turnover and an electricity meter with a service capacity under 36 kVA will continue to be eligible for the shield rate. The companies
concerned will have the option of returning to regulated rates, the increase of which has been moderate (15% increase at the beginning of 2023).
Electricity Buffer for some VSEs and all SMEs
The Electricity Buffer will be aimed at all SMEs (fewer than 250 employees, 50M € turnover and 43M € balance sheet), as well as VSEs that aren’t eligible for the shield rate and all local authorities and public establishments that don’t have operate competitively, regardless of their status.
The aid will be integrated directly into consumers' electricity bills and the state will compensate the suppliers. Consumers will only have to confirm to their supplier that they fall under the scope of beneficiaries.
This aid will affect the “commodity” component of a given contract, i.e. the average annual price of electricity excluding transmission costs (Turpe) and taxes.
The Buffer will take effect on 50% of the "commodity" component of each invoice, as long as the invoiced unit price is between €180/MWh and €500/MWh. Its effect will serve to lower the “commodity” price, though a statutory limit is set at 160 €/MWh, in the sense that the relief brought by the of the Buffer cannot be used to bring the average price of the entire invoice below that level.
The definition of the "commodity" component raises a few questions (interpretation of the ARENH Shortfall Premium, the Capacity charge, optional green energy, etc.).
Below is a projection of the amount of relief (expressed in €/MWh) brought by the Buffer, depending on the average commodity price contracted by the consumer.
|Average contracted commodity price (excluding taxes and transmission) In €/MWh||Unit rate of relief received deduced from the contracted commodity price In €/MWh|
Source: Government press release on 29 November 2022
NOTE: Companies benefiting from the Electricity Buffer are excluded from the pre-existing aid window mentioned above. This exclusion naturally only applies to their electricity bills, meaning this category of consumers will still have access to the earlier aid window for their gas costs.
Aid window for the payment of Electricity invoices for SMEs and large companies
For mid-sized companies and large companies, which can’t request relief under the Electricity Buffer, all aid window schemes will be extended until the end of 2023.
With regard to natural gas invoices
All companies will retain access, until 31 December 2023, to the same aid window for the payment of natural gas invoices. The schemes, respectively capped at 4M €, 50M € & 150M €, will persist under the same conditions as in late 2022.
More: Market Updates, Electricity, France Energy Aid 2022/2023, Natural Gas