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You won't cut it, despite the meteoric rise in prices: a good part of your fuel expenses go back to the State, in the form of taxes on fossil fuels.
Others, however, do not pay a penny: these are companies or professionals in the transport, energy or agriculture sectors.
As part of their work, these French people pay little or no tax on fuels and combustibles: they benefit from a “tax niche”.
While France continues to reiterate its commitment to ecological transition and plans to gradually get rid of combustion engines, should these exemptions be abolished?
Are they unfair?
Many of our readers have suggested that we put an end to these tax benefits, as part of our "Proposals Lab", in view of the presidential election.
We have analyzed the advantages and disadvantages of this proposal.
What is it about ?
Exemptions, rates or reduced VAT… In France, many companies benefit from “tax loopholes” relating to fossil fuels.
The State uses them as a means of supporting economic activity, by facilitating the purchase or investment in oil and gas in particular.
Thus the sectors of aviation, transport, energy production as well as agriculture pay less tax on energy products (TICPE), if at all.
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These multiple “climate-unfavorable” boosts would have cost the State more than 14.2 billion euros in 2019, according to a study by the Institute for Climate Economics, an economic and climate research organization funded by the French Development Agency.
According to a report by the European Court of Auditors published on January 31, 2022, France grants more subsidies to fossil fuels than to renewable energies.
The COP 21 country is therefore still fueled a lot by tax advantages on fuels.
What are the costs and benefits?
Maintaining subsidies at such a high level risks “hindering the energy transition” and ecological transition because they make “clean energy and low-energy technologies (…) relatively more expensive”, in comparison, still according to the Court. European accounts.
If the fossil fuel sector remains attractive, investments and purchases will persist in this way, which is harmful for the climate and health.
However, many companies need this aid to continue their activity.
Farmers, whose incomes are particularly low, often rely on these reduced rates to get by, for example.
Machines consume fuel, and many farm treasuries could not sustain such increased expenses.
Deprived of these exemptions all of a sudden, certain economic players risk bankruptcy.
Is it doable?
Removing these exemptions remains feasible, provided it is progressive and offers compensation to avoid harming the activity of key sectors.
“The challenge is to reflect in consultation with the current beneficiaries: what are the needs of the beneficiaries?
Is the tax niche necessary for them?
What alternatives could they benefit from”, develops Marion Fetet, research fellow at the Institute for Climate Economics.
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The State is already working to reduce exemptions, as part of the energy transition and the Paris agreement, aimed at limiting global warming, but the subject of compensation is perilous.
“In the construction industry, an alternative exemption has been proposed, on the purchase of electrical equipment for example.
But in terms of cash, exchanging an exemption for the promise of partial and subsequent reimbursements on new investments is difficult to bear,” illustrates Marion Fetet.
What about abroad?
The European Commission and some member states have promised to phase out fossil fuel subsidies.
Except that in reality, they "remained relatively stable", from 2008 to 2019, according to a study carried out for the European Commission published in October 2021. They represent a total of 55 to 58 billion euros per year at the scale of the European Union.
Fossil fuel subsidies, however, are a declining share of energy support in Europe.
The latter does not cut the tap of exemptions on fossil fuels but waters more and more “clean” energies.
Over the same period, subsidies for renewable energies were multiplied by 3.9, from 20 to 78 billion euros, according to the same study.
At the same time, their use has increased from 12.6% in 2008 to 20% in 2020.
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On November 12, 2021 during COP26, France announced that it was joining a coalition of around thirty countries to put an end to public investment in projects related to fossil fuels by the end of 2022, if they are not equipped with "devices for 'mitigation' of greenhouse gas emissions.
It will completely cut its investments in oil in 2025 and in gas in 2035.
What are the candidates proposing?
Only Jean-Luc Mélenchon directly targets these exemptions: to switch to 100% renewables in 2050, the far-left candidate wants to “stop fossil fuel subsidies, including abroad”.
Ecologist Yannick Jadot plans to “redirect investment aid” for farmers to facilitate their ecological transition and to increase exemptions for renewable energies.
He also wants, like the LFI Jean-Luc Mélenchon and the socialist Anne Hidalgo, to superimpose incomes and heritages harmful to the planet.
Candidate Macron has not yet spoken about this aspect in particular, but he wants to develop and invest in electric motors.
While France is trying to reduce its dependence on oil, Valérie Pécresse, LR candidate, wants to "support the diversification of farms by focusing in particular on biofuels" and grant them additional income according to the "benefits" they bring to the environment. environment, so as not to penalize them when the energy transition risks affecting them.
Conversely, Marine Le Pen wants to create new tax exemptions and lower VAT from 20% to 5.5% on fuel, fuel oil and gas, in a logic geared towards short-term purchasing power.
Éric Zemmour does not cite this component in particular, but proposes an exemption in another form: he wants companies to reimburse 50% of the fuel costs of their employees for their home-work trips.
Another way to make gas expenses easier.
Asked about this, the Ministry of Economy and Finance ensures that overall, the tax expenditures (subsidies, exemptions, endowments) of the State are favorable to the environment (32.5 against 10.8 billion neutral).
These figures are taken from the "Green Budget" 2022, an annual account of the environmental impact of the state budget, adopted in 2017.
In summary
For the moment, France exempts fossil fuels more than renewable energies.
To keep its environmental commitments, the State should gradually reverse the trend.
Environmental NGOs, such as Greenpeace, find that the change is not fast enough, but some economists warn of the importance of implementing alternatives and not drying up the companies that benefit from this boost.
Every remedy has its side effects.