- The French government proposes a tax on power plants over 260 megawatts to balance the 2025 budget, potentially affecting EDF, Engie, and TotalEnergies.
- Industry leaders argue that the tax could harm investments in clean energy, and EDF warns that it may disrupt nuclear expansion plans.
- Officials, including the Minister of Ecology, oppose the tax, fearing it could raise consumer electricity bills despite improving market conditions.
The French government plans to impose a new tax on electricity production plants to balance the 2025 budget while avoiding electricity bill hikes for consumers. This proposal, targeting power plants exceeding 260 megawatts, sparks opposition from industry leaders who warn it could harm investments in clean energy.
The proposed “contribution on inframarginal rents” (Crim) targets nuclear, hydroelectric, wind, and gas plants. EDF (Électricité de France) expects the most significant impact, facing an estimated €2.7 billion burden due to its nuclear portfolio. Other energy producers like Engie and TotalEnergies also foresee negative impacts, though on a smaller scale.
Industry representatives argue that the tax would stifle essential investment in France’s energy transition. Mattias Vandelbulcke, Strategy Director at France Renouvelables, claims the tax sends a “negative signal” to renewable energy developers. The Union Française de l’Électricité (UFE) supports this view, warning that Crim would reduce incentives for clean energy investments and endanger long-term energy security.
EDF, which struggles with €54.2 billion in debt, warns that the new tax could severely strain its finances. CEO Luc Rémont believes it threatens the company’s nuclear expansion, including plans for new EPR2 reactors. Rémont also suggests that EDF may need to take unprecedented steps, such as issuing dividends from its profits for the first time since 2016.
Agnès Pannier-Runacher, Minister of Ecology and Energy, opposes the Crim, arguing the tax would eventually raise consumer electricity bills. She stresses the need to stabilise energy prices significantly as market conditions improve. Prime Minister Michel Barnier shares this concern, stating that easing inflation should lower consumer costs without introducing new taxes on energy producers.
Since spring, government officials and energy sector leaders have engaged in talks but have not decided. The Crim remains one of several strategies under consideration to meet budgetary goals without burdening consumers or disrupting France’s energy transition.
The proposed tax raises fears of jeopardising critical investments in renewable energy and nuclear projects. EDF faces significant risks, with its atomic expansion potentially derailed, while other major energy producers closely monitor the situation, wary of future implications for the industry.
As France works to balance its budget while advancing its energy transition, debates over achieving these objectives without penalising consumers or energy producers continue. The government’s final decision on the Crim will likely shape the future of the French energy market and the country’s ability to meet its climate goals. Industry players urge officials to reconsider the tax and instead focus on promoting long-term investments in clean energy.