Industrial decarbonization in support of the ecological transition

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The industrial decarbonization was recently included in the recovery plan. On September 3, 2020, the Government announced the launch of a 100-billion-euro plan structured around three priorities: ecology, competitiveness, and cohesion. Of these 100 billion, 30 will be dedicated to the ecological transition through several areas:

• the thermal renovation of buildings,
• support for industrial decarbonization,
• the ecological bonus,
• the conversion premium for the purchase of a clean vehicle,
• the development of public transport,
• the transformation of the agricultural sector,
• research and innovation for the development of green technologies.

But what exactly is decarbonization? It involves seeking to move away from the use of fossil fuels such as oil, coal, or gas and replacing them with renewable energy sources.

The industrial decarbonization therefore aims to support companies in investing in production equipment that emits less CO₂and consumes less energy.

Support for industrial decarbonization

Support for industrial decarbonization (€1.2 billion) also bolsters the National Low-Carbon Strategy, which aims for carbon neutrality by 2050. As a reminder, the National Low-Carbon Strategy (SNBC) targets an 81% reduction in greenhouse gas (GHG) emissions from the industrial sector by 2050. Industry currently accounts for approximately 20% of France's greenhouse gas emissions.

Two main pillars for reducing CO₂ emissions have been defined, and support mechanisms have been established:

First pillar: Support for industrial investment in processes that consume less energy or emit fewer greenhouse gases.

• Support window for equipment related to energy efficiency or process electrification: managed by the ASP (Services and Payment Agency), this mechanism is governed by Decree No. 2020-1361 of November 7, 2020. It is open until December 31, 2022.
  • Any company operating in the manufacturing sector or any company acting as a third-party financier for such an industrial company is eligible. The equipment in question must be directly used for industrial activity. The list of eligible assets is attached to the decree of November 7, 2020, regarding the management procedures for aid supporting the decarbonization of industrial production tools.
• Aid for investments in the decarbonization of industrial activity;
• Aid for investments in the decarbonization of industrial production tools;
  • Any company in the industrial sector is eligible.
  • The project cost must exceed €3 million.

Second pillar : Support for the decarbonization of industrial heat.

• Operating aid for biomass heat;
  • Any company operating in the manufacturing sector is eligible
  • This aid is reserved for biomass projects exceeding 12,000 MWh/year.
• Operating aid for heat produced from Solid Recovered Fuels (SRF).
  • Any company operating in the manufacturing sector that sells the heat produced to one or more companies operating in the manufacturing sector is eligible;

New calls for projects to support industrial decarbonization were launched in mid-March 2021:

• A single call for projects (DECARB IND) is being renewed in 2021 with an expanded scope: in addition to energy efficiency improvements, process transformation in all its forms is now eligible;
• The 2021 BCIAT call for projects supporting biomass heat was launched on March 11, 2021, with a first submission deadline on May 17, 2021, and a second on October 14, 2021.
• The 2021 SRF Energy call for projects for SRF heat projects was launched on October 20, 2020: Following an initial submission deadline on January 14, 2021, the program remains open for a second round until October 14, 2021, at 11:00 AM

Summary of the first selected initiatives

Support for decarbonized heat:

The first 17 winners were selected from the 54 projects submitted. These winners represent:

• 130 million euros in industrial investments;
• 44 million euros in investment aid;
• 83 million euros in operating aid;
• 332,000 tons of CO₂ saved per year;

Support for industrial energy efficiency:

16 new winners join the 16 initiatives already selected in December 2020, representing a total of:

• 466 million euros in industrial investment;
• 97 million euros in subsidies;
• An average 12.5% reduction in greenhouse gas emissions for the sites involved;
• 410,000 tonnes of CO₂ saved per year.

Note: The 2021 Finance Act requires private legal entities (companies, associations, etc.) receiving funding from the 2020-2022 recovery plan and employing more than 50 people to complete a simplified greenhouse gas (GHG) emissions report by December 31, 2022. By way of derogation, those employing between 51 and 250 people are required to complete this simplified report by December 31, 2023.

Conclusion

These figures do not allow us to be complacent about the scale of the measures initiated, but rather provide a comprehensive overview of the relationship between the investments made, the aid granted, and the amount of CO₂ saved.

As a reminder, the CO₂ emissions reduction target for 2019 was adjusted from 2.3% to 1.5%. The record drop in CO₂ last year was primarily driven by the health crisis we are currently experiencing. As the "Climate and Resilience" bill is now before Parliament, we can only hope that initiatives supporting decarbonization, and energy efficiency more broadly, will expand and be applied across all sectors of activity.

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Photo credit: Chris Robert