Heat Fund 2025 Results: 1.200 projects supported to phase out fossil fuels

The ongoing energy crisis underscores the urgent need to accelerate our country's energy transition to rapidly strengthen our sovereignty and reduce our imports by leveraging locally produced energy. The electrification plan, announced by the Prime Minister on April 10th, structures this effort and increases both the ambition and the resources deployed in the short term to achieve it. District heating networks represent a crucial solution in this regard, particularly in urban areas and in situations where heat pumps cannot be deployed.

In February 2026, the government published the 3rd Multiannual Energy Programme (PPE3), aiming to drastically reduce the share of imported fossil fuels in the country's energy consumption (60% in 2023) and reach 60% low-carbon energy by 2030. PPE3 thus sets an ambitious target of 328 to 421 TWh of renewable and recovered heat by 2035 (compared to 172 TWh in 2022). It also aims to reach 68 to 90 TWh of heat distributed via district heating networks by that time, of which 80% must be renewable and recovered heat (compared to 26 TWh, of which 64% was renewable and recovered heat, in 2022). Operated by ADEME since 2009, the Heat Fund makes a significant contribution to the growth of renewable and recovered heat production, complementing substantial efforts in energy efficiency and conservation. Heat Fund grants allocated in 2025 to supply multi-family housing, businesses, and local authorities will enable the construction of 643 km of heat distribution networks and more than 1200 new installations producing 3,5 TWh per year of renewable and recovered heat.

France possesses numerous local, renewable, and recovered resources, industrial expertise, and public support. The deployment of projects supported by the Heat Fund contributes, particularly efficiently for public finances, to the decarbonization of the economy and the country's energy sovereignty; it is with this objective in mind that the State has increased the Heat Fund's budget to €800 million in 2026.

More than 1200 installations will be supported by efficient public aid by 2025.

For 17 years, the Heat Fund has supported approximately 11.200 renewable and recovered energy (RRE) installations, including 5200 km of distribution networks, through €5,9 billion in subsidies, generating nearly €18 billion in investments. This represents almost 52,5 TWh/year of additional RRE production, equivalent to the heat consumption of approximately 5 million homes, and around €2,6 billion/year in trade savings (compared to the gas that would have been required to produce this heat without these projects[1]). Furthermore, the France Relance, France 2030, and Ecological Planning Fund programs have supported heat production from biomass for industrial use to the tune of 8,7 TWh/year, particularly through the BCIAT[2] and BCIB calls for projects. The cumulative balance of all these devices leads to an additional thermal production of 61,2 TWh/year.

In 2025, the Heat Fund budget amounted to €801 million. The entire budget was committed. With an average efficiency of €51,5 of aid per tonne of CO2 saved[3], it is one of the most effective tools for decarbonizing the economy and reducing gas imports. This program supported nearly 1.200 installations in 2025, covering the heat needs equivalent to the heating consumption of approximately 200.000 homes. This significant number of installations[4] reflects the increasing scale of Renewable Heat Contracts supporting numerous smaller projects, with strong growth in geothermal projects in 2025.

This year again, the Heat Fund mainly subsidized investments (€727 million in investment aid generating more than €2,4 billion in spending on renewable energy installations, i.e. a leverage effect of 3,3) and financed to a lesser extent other support mechanisms (studies, animation of territorial renewable heat contracts, geothermal guarantee fund[5], subsidized loans for social housing offered by the Banque des Territoires, etc.), necessary to bring about quality projects in the territories.

Regarding investment aid, heat distribution networks, a key component in the development of renewable and recovered heat, represent one of the largest budget items with €298 million in aid, financing 643 km of networks. Biomass boiler plants received €155 million in aid, geothermal energy (shallow and deep) €85 million, and waste heat recovery equipment €21 million. Solar thermal energy and biogas injection equipment received €10,6 million and €8,1 million respectively.

Projects receiving investment aid from the Heat Fund 2025 will produce an additional 3,5 TWh/year of renewable and recovered heat. Biomass energy contributes the most to this heat production (52%), followed by geothermal energy (21%), waste heat recovery (18%), methanization (9%), and solar thermal energy (0,5%). The annual emissions avoided by these new installations amount to approximately 777 ktCO2/year.

The role of the Heat Fund is to support the acceleration of the development of renewable and recovered heat planned by the PPE3 by financing the most efficient projects (in terms of public aid relative to CO2 emissions avoided) while supporting the diversification of renewable energies mobilized to reduce the growing tension on certain biomass resources.

Given the local tensions observed in certain areas (particularly regarding wood chips), the EnR'Choix approach[6] has been implemented nationwide since 2024. This approach prioritizes energy efficiency and conservation measures, followed by opportunities for sharing energy production facilities, notably through connection to an existing or newly created district heating network, and finally, the use of renewable and recovered thermal energy. These renewable and recovered thermal energy sources are prioritized in the following order: (1) Use of local, non-relocatable recovered thermal energy sources for both heating (waste incineration, wastewater treatment, data centers, etc.) and cooling (free cooling, waste heat recovery, etc.); (2) Use of local renewable thermal energy sources (deep geothermal energy, geothermal heat pumps, solar thermal energy, etc.); (3) Use of other renewable energy sources that can be relocated (biomass). The use of biomass must be based on diversifying supplies of different types of biomass resources. This will translate, from 2025 onwards, into a more diversified energy mix and a significant increase in the share of non-biomass renewable energies (48% of supported renewable energy production in MWh in 2025, see graph above). It is worth noting the strong momentum in geothermal energy, with more than 300 projects supported in 2025, representing 20,7% of supported renewable energy production in MWh.

Priorities and actions related to the Heat Fund for 2026

To further the deployment of renewable heat, the government has increased the Heat Fund's budget by €800 million for 2026. The momentum in local areas remains very strong, as the portfolio of projects has accumulated a total of applications for funding that is approximately double this budget. Eligibility and funding criteria have been revised to support a greater number of projects.

Furthermore, given the challenges related to biomass resource availability, and in particular the strain on wood chips in certain regions, the prioritization of renewable and recovered energy sources is strengthened, and the diversification of biomass supply plans is encouraged. Energy biomass will nevertheless remain essential, especially for high-temperature applications.

Accelerating the deployment of deep and shallow geothermal energy remains a priority for 2026 with the implementation of the action plan launched in February 2023 by the State, which includes twenty-seven priority actions in metropolitan and overseas France.

Furthermore, work continues on the methods of covering the risks inherent in the recovery of industrial waste heat.

Finally, the BCIAT 2026 call for projects was launched on March 26, 2026, as part of the France 2030 program. It aims to support ambitious renewable heat production projects in industry; pyrolysis/pyrogasification and self-consumption methanization projects are also eligible, subject to certain conditions. Projects can be submitted until July 17, 2026, and will be processed subject to the availability of funding.

The BCIB scheme is also open until April 30, 2026 to support the increase in drying capacity (of wood material) of sawmills with the development of decarbonized drying equipment.

Some examples of flagship projects supported in 2025

• Shallow geothermal system installation with boreholes in Pontivy (56). The project involves installing a shallow geothermal system with boreholes to meet the heating and cooling (via geocooling) needs of a nursing home for dependent elderly people in Pontivy (56). The shallow geothermal system will consist of an 82 kW heat pump connected to 13 boreholes, each 200 m deep. The system will produce 345 MWh/year and will prevent the equivalent of 66 tonnes of CO2 emissions per year. Project cost: €1,043,000 - ADEME Heat Fund grant: €219,600 - Commissioning scheduled for May 2026.
• Creation of a district heating network powered by a biomass boiler and a solar thermal installation in Salon-de-Provence (13). The project consists of installing a 2.000 m² solar thermal power plant combined with a 10 MW biomass boiler equipped with a condenser and thermal storage; and creating a 15 km network. This network of 70 substations will be supplied by 49 GWh of renewable energy, thus avoiding the equivalent of 11.000 tonnes of CO2 per year. Project cost: €27,8 million - ADEME Heat Fund grant: €10,1 million - Commissioning scheduled for 2026.
• Extension of a district heating network powered by deep geothermal energy and a biomass boiler in Bordeaux (33). The project involves the construction of a geothermal doublet at a depth of approximately 1.000 meters, coupled with a 7,4 MW heat pump, as well as the installation of a 4 MW biomass boiler. It also includes the extension of a 7,5 km district heating network. This extension will serve 47 new substations, primarily intended for social housing located in the Grand Parc Priority Neighborhood. Ultimately, the project will help prevent the emission of approximately 8.400 tons of CO₂ per year. Project cost: €39,5 million - ADEME Heat Fund grant: €7,5 million - Commissioning scheduled for 2026.

[1] Assuming a gas price of €50/MWh

[2] The BCIAT call for projects supports ambitious renewable biomass heat production projects in industry. Depending on the year, it has been funded by the Heat Fund, France Relance, or France 2030 budgets. The BCIB call for projects specifically supports the wood industry in developing high-performance drying solutions, promoting energy self-sufficiency and reducing fossil fuel use: depending on the year, it has been funded by the Heat Fund, France 2030, or Ecological Planning Fund budgets.

[3] On average, for projects supported by the Heat Fund in 2025, the ratio between the total budget of the Heat Fund and the additional production expected over 20 years reached €11,5/MWh, compared to around €11/MWh in 2024, which remains a particularly efficient value from the point of view of public finances.

[4] Renewable Heat Contract: a mechanism of the Heat Fund enabling the financing of clusters of Renewable Energy & Recovery projects, including small-scale projects that would not be eligible individually.

[5] The "geothermal guarantee fund", managed by SAF-Environnement, on the basis of an agreement with ADEME, allows investors to be insured against geological risk in exchange for a contribution

[6] https://www.enrchoix.idf.ademe.fr/

Illustrative image of the article via Depositphotos.com.