The aid for decarbonizing industry under the Recovery Plan and France 2030

Between 2020 and 2024, the French government significantly increased aid to support decarbonization as part of the recovery plan and the France 2030 initiative. While these measures are still being implemented, the Court of Auditors' evaluation aims to shed light on their initial effects and their interaction with other levers of the industrial transition. To ensure a coherent scope for the evaluation, only aid intended to support investment in the deployment of decarbonization technologies at industrial sites was considered. This represents a total of €3,4 billion. The Court's evaluation focuses on the consistency of this aid with other public interventions and programs, the relevance of targeting the companies receiving aid in light of decarbonization objectives and competitiveness challenges, and the effects observed so far on the beneficiary companies.

Industry: decarbonization underway but still a major contributor to national emissions

Despite a downward trend in its emissions since 1990, the manufacturing industry remains a major contributor to national greenhouse gas emissions. In 2024, it accounted for 58,7 MtCO2e, or 15,9% of total emissions, making it the third largest emitting sector. Its emissions are characterized by a high sectoral and geographical concentration: four sub-sectors—non-metallic minerals and construction materials, chemicals, metallurgy, and the agri-food industry—account for 88,6% of the sector's emissions, and the 50 largest emitting sites concentrate 58% of total emissions. While emissions have decreased by 57% between 1990 and 2024 and emission intensity has declined significantly, the observed rate remains insufficient to meet the medium-term objectives set by the national low-carbon strategy, whose targets have been made more demanding. Achieving these objectives requires sustained efforts to reduce emissions and significant investments to transform production processes and deploy decarbonization technologies at varying levels of maturity and deployment prospects.

Are decarbonization subsidies consistent with other public interventions and mechanisms?

Support for industrial decarbonization is part of a broader set of public interventions. From an external coherence perspective, carbon pricing is, according to economic theory, the preferred tool for incentivizing decarbonization, with the European emissions trading system playing a central role. However, its operational limitations—price volatility, the risk of carbon leakage, and implementation complexity—justify the existence of complementary public support. The aid provided by the recovery plan and then by France 2030 represented an unprecedented increase in resources dedicated to industrial decarbonization, but it operates within a complex and fragmented landscape, characterized by a multitude of mechanisms at the European, national, and regional levels, whose coordination remains limited. From an internal coherence perspective, while the management of aid has become increasingly professionalized, monitoring still needs strengthening, and non-financial obstacles—particularly administrative and technical delays—must be addressed. The Court therefore recommends establishing, from 2026 onwards, a projected trajectory for aid to decarbonize industry in line with the multi-year programming of public finances.

Is the targeting of companies receiving aid relevant in light of decarbonization objectives and the challenges of industrial competitiveness?

In 2019, manufacturing emissions were heavily concentrated in a small number of facilities, the vast majority of which were not investing in decarbonization. Previous aid, particularly from the Heat Fund, benefited facilities representing a very limited share of total emissions. Since 2020, the measures of the recovery plan and France 2030 have made it possible to reach sectors and facilities that are, on average, higher emitters than others, belonging to more innovative and export-oriented companies in a favorable economic position, in line with the dual objective of decarbonization and competitiveness. However, while targeting has improved, of the 56 sites covered by the contracts signed under the name "50 sites," only about twenty received aid over the 2020-2024 period. The report thus highlights the areas for improvement in targeting and the need to consider the knock-on effects and the mobilization of other tools to support the entire industrial fabric.

What are the effects of decarbonization aid on the beneficiary companies?

The econometric assessment conducted by the Court, based on a still limited period of data, shows that decarbonization aid has a positive effect on the amount of investment made by companies already committed to this approach, without increasing the likelihood of new companies initiating a decarbonization project. The aid thus appears to be correlated with a significant increase in decarbonization investments (intensive margin), accompanied by a decrease in emissions and their carbon intensity. However, no positive effect has been observed at this stage on employment or production levels. Initial results highlight favorable effects on innovation and productivity, notably through an increase in the number of patents and an improvement in net profit margins. These results will need to be confirmed by further medium-term assessments. The Court therefore recommends implementing, starting in 2026, a monitoring program for cohorts of companies to measure the medium- and long-term effects of the measures, particularly on industrial transformation.

The industrial decarbonization support scheme of the recovery plan and France 2030 has accelerated investments and thus responded to the climate emergency, highlighted in the national low-carbon strategy which sets ambitious targets for 2030. Nevertheless, a comprehensive and long-term policy, which includes all stakeholders, the highest emitting sites but also the entire industry, is necessary to prepare the transition to carbon neutrality by 2050, beyond the 2030 milestone.

The Court recommends, firstly, establishing from 2026 a forecast trajectory for aid to the decarbonisation of industry in line with the multiannual programming of public finances and, secondly, setting up a monitoring of cohorts of companies in order to measure the medium and long term effects of the schemes.

Illustrative image of the article via Depositphotos.com.