July 30, 2014

France to Earmark 10 Billion Euros of Funding to Promote Renewable Energy Use

France will mobilize about 10 billion euros ($13.41 billion) for a package of tax breaks, low-cost loans and bonuses to boost investment in renewable energy and cut the country's oil and gas bill, Energy Minister Segolene Royal said on Tuesday.

Royal, President Francois Hollande's fourth energy minister in two years, is tasked with reducing the country's reliance on nuclear energy - the highest in the world - to 50 percent of its electricity production from 75 percent and boosting renewable energy sources.

Last month, she presented the broad outline of a much-delayed energy transition bill, which passes through cabinet on Wednesday and is expected to become law in early 2015.

She confirmed that homeowners will be allowed to deduct 30 percent of the cost of thermal insulation from their taxable income, up to a maximum of 16,000 euros per couple.

She declined to give the overall amount budgeted for this measure, but said a similar tax break in 2009 cost about 2 billion euros per year.

The government will also simplify access to zero-percent loans for renovation work, and will increase a bonus available to drivers who buy an electric or any other clean car from 6,700 euros to 10,000 euros if they scrap a diesel-powered car at the same time.

Owners of an electric car will also get a 30 percent rebate on the cost of installing a charger at home, she said.

A 1.5 billion euro fund to subsidize "zero-waste" and "energy-plus" territories - communities or buildings producing more energy than they import from external sources - will be set up.

It remained unclear how much these measures will cost the state for any given year, but Royal said the tax breaks would be part of rebates already announced by Prime Minister Manuel Valls earlier this year.

France's energy bill reached 66 billion euros in 2013, down 4.6 percent from a record high the previous year, due to lower oil and coal prices, ministry data showed. That compares with a wider trade deficit of 62.2 billion euros last year. (1 US dollar = 0.7460 euro) 

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