Public Finance Alert. The energy transition will cause no less than €13 billion to lose state revenues by 2030, and up to €30 billion by 2050, estimates the Directorate-General of the Treasury. For the first time, the administration has calculated the shortfall in fuel taxation in the coming years.
Fuel taxation brought €41.5 billion to the public accounts in 2022, according to estimates by the Ministry of the Economy, notably through the domestic consumption tax on energy products (TICPE) and the value added tax (VAT). The exit from fossil fuels implies a reduction in taxes on these energies: with unchanged taxation, they could be eroded "by 13 billion euros by 2030 and 30 billion euros by 2050", estimates the Treasury in an interim report of the study on "the economic challenges of the transition to carbon neutrality" that it will publish in 2024.
This document is published on the occasion of the Bercy Meetings devoted on Tuesday to the theme "Growth and climate". These figures are in line with the scenario of global warming limited to 1.5°C, for which France and the European Union have made commitments to reduce their net greenhouse gas emissions by 55% in 2030 compared to 1990, and carbon neutrality in 2050.
Need for anticipation
The report notes that the Scandinavian countries, whose electrification of the car fleet started earlier, are already facing this phenomenon of revenue erosion, and that "several European countries are responding by mobilising more other sources of revenue within the road sector" such as congestion charges or reducing subsidies for electric vehicles as their purchase price falls. Tracks that could be considered in France to deal with the dry losses linked to the energy transition.
In addition, the report estimates that an additional €110 billion per year (gross, compared to 2021) in private and public investments will be needed for decarbonisation projects. It does not yet have an estimate for 2050. At the same time, climate-negative investments could be reduced, by €37 billion per year in 2030, for example, thanks to the ramp-up of electric vehicles and efforts to reduce consumption.
Despite these costs, the Treasury Department reiterates that "in the long term, the transition will be beneficial to the economy and well-being" compared to the status quo, and it strongly encourages strong anticipation of the measures to be taken.
The Bercy meetings on Tuesday at the Ministry of Economy and Finance will bring together several ministers, Bruno Le Maire (Economy), Agnès Pannier-Runacher (Energy Transition) and Christophe Béchu (Ecological Transition) with experts such as Bill Gates, co-president of the Bill and Melinda Gates Foundation, or Jean Pisani-Ferry, co-author of a report in the spring on "the economic impact of climate action".