EN_FRA_Country_Brief_Apr2019.pdf

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April 2019
France
The OECD Inventory of Support Measures for Fossil Fuels identifies, documents and estimates direct
budgetary support and tax expenditures supporting the production or consumption of fossil fuels in OECD
countries and eight partner economies (Argentina, Brazil, the People’s Republic of China, Colombia, India,
Indonesia, the Russian Federation, and South Africa).
Energy resources and market structure
Total Primary Energy Supply* in 2017
France has very limited fossil-energy resources
and imports most of its oil, natural gas, and all
Nuclear,
Geothermal,
42%
of its coal. The country has pursued a policy of
solar &
wind, 1%
developing its nuclear energy industry to
reduce its dependence on fossil energy
imports, though almost all of the uranium
Hydro
, 2%
needed to fuel its nuclear power plants is
Coal, 4%
imported (mostly from Canada and Niger). In
Oil, 29%
2016, nuclear power accounted for roughly
Biofuels &
three-quarters
of
France’s
electricity
waste, 7%
Natural gas,
generation and 43% of its total primary energy
15%
supply, fossil fuels accounting for 47%.
*excluding net electricity import
Treating nuclear power as domestic supply,
Source:
IEA
indigenous production meets just over half of
the country’s energy use. Petroleum products accounted for 28% of energy use, having dropped steadily
from 37% in 1990 and nearly two-thirds in the 1970s.
France has liberalised its electricity and natural-gas sectors progressively to comply with EU directives,
eliminating the monopoly rights of the two state companies,
Électricité de France
(EDF) and
Gaz de
France
(GDF). As a result, high government ownership of energy companies has somewhat diminished in
recent years. Further actions taken included the unbundling of the transmission and distribution
networks of natural gas and electricity, the introduction of negotiation of third-party access to
underground storage of natural gas, and the establishment of both a regulator, the
Commission de
Régulation de l’Énergie
(CRE), and a mediator to protect electricity and gas consumers.
The oil industry has been private since the state sold its share of the international oil company, Total,
was completed in the late 1990s. A number of other private companies, many of them foreign-based
multinationals, are also active in the French refining, distribution, and marketing businesses. Despite
efforts to liberalise the electricity sector, EDF and its subsidiaries still account for the bulk of power
generation, transmission, and distribution. This is reflected by low consumer-switching rates (less than
10%), although electricity consumers in France have been able to choose their supplier since 2000.
Similarly, Engie (formerly GDF Suez) remains the dominant player in the natural-gas market, importing
the bulk of the country’s gas needs. Engie and other historical gas suppliers have retained most of the
retail market (79% of residential customers and 78% of non-residential customers in September 2018,
but only 68% of non-residential consumption).
Energy prices and taxes
Prices of all forms of energy other than electricity and natural gas are set freely by the market in France.
The CRE is responsible for proposing changes to the regulated tariffs and for regulating tariffs for access
by third parties to gas and electricity infrastructure, but the government still has the final say over
whether or not to approve the proposed changes (though not modify them). Energy products and
services are subject to normal VAT at the rate of 20%, with the exception of some segments of electricity
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supply, natural gas, and LPG, for which the rate is 5.5%. Excise duties in the form of the TICPE (Taxe
intérieure de consommation sur les produits énergétiques)
are payable on all sales of oil products at
varying rates while separate consumption taxes apply to deliveries of coal, natural gas and electricity. A
part of this rate is directly linked to the fuel carbon emissions.
Total support for fossil fuels in France by support indicator (left) and fuel type (right)
Note: CSE=Consumer Support Estimate; PSE=Producer Support Estimate; GSSE=General Services Support Estimate.
The peak in support in 2006 is linked to capital grants to the public mining company Charbonnages de France. Such grants
ended after the dissolution of the company at the end of 2007.
Recent developments and trends in support
There exists a number of different mechanisms and arrangements supporting the use of specific fuels
and categories of end users in France. These mainly take the form of partial or full exemptions and
refunds from VAT and excise duties on oil products. In many cases, the total volume of the different
forms of support is modest, though it can still represent a substantial transfer from the perspective of
the recipient. In 2015, with the addition of a carbon tax to the taxation of energy products in France,
exemptions to energy-intensive industries that are not part of the EU ETS and are exposed to the risk of
carbon leakage were introduced to shield concerned sectors from increases in excise tax rates on fossil
fuels. The resulting positive growth in support to fossil fuels between 2014 and 2016, as illustrated in the
graph above, is directly linked to the exclusion of energy-intensive industries from the new carbon tax on
fossil fuels.
Examples of measures
Excise Refund for Diesel Used
in Road Freight Transport
(1999-)
The excise tax levied on diesel fuel used in road freight vehicles weighing at
least 7.5 tonnes is, under this tax provision, partly refunded to eligible
beneficiaries. Freight companies registered in other EU countries can benefit
from this measure provided they are able to attest having purchased diesel fuel
in France for use in eligible vehicles.
Motor fuels consumed in French overseas
départements
(Guadeloupe, Guyane,
Martinique, Mayotte and La Réunion) are subject to a special tax (Taxe
Spéciale
sur la Consommation),
whose rate is decided locally, generally lower than the
final consumption tax and cannot exceed the excise tax rate applied in
Metropolitan France. In addition, there are no taxes applied to fuel for heating
or cooking purposes. This concession aims at supporting investment in
territories that are both geographically and economically disadvantaged.
Overseas Excise Tax for Fuels
(2001-)
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