Final adoption of the green industry bill and creation of a new tax credit: the C3IV

October 17, 2023

The green industry bill has been definitively adopted. It was approved on October 9 by the joint committee, on October 10 by the deputies and on October 11 by the senators. It has not yet been definitively promulgated. Promulgation is subject to an examination by the European Commission confirming its compliance with European Union law on state aid. The data presented below are those in the bill to date.

At a time when public policy on climate issues is taking shape, the government intends to encourage the financing of innovative projects that respect the environment. The purpose of the project is to reindustrialize the country and make France a major player in green industry in Europethe leader in the green technologies needed to decarbonize and green existing industries.

Measures introduced by the Green Industry Bill

To meet the objectives set by the government, an arsenal of 15 measures will be implemented around 4 pillars :

Facilitating the establishment of industrial sites in France
Financing green industry
Promoting virtuous companies
Training for jobs in green industry

Creation of a tax credit for green industry: the C3IV

In this group of measures, a green industry investment tax credit, hereinafter referred to as "C3IVwill be introduced. The aim of this tax credit is to promote the production of new-generation batteries, solar panels, wind turbines and heat pumps.

How to calculate C3IV?

C3IV rate

The "ordinary law" rate of this tax credit will be 20% of capital expenditure base (replacement expenditure would not be affected) "green industry".

Government defines green industry:

"The green industry encompasses two major families of activities:

Creating green industries Establish and expand new industries that provide goods and services to decarbonize our economy.

Decarbonizing existing industry To enable all existing industries, regardless of sector, size or location, to green their operations, and to support them in this process.

The rate will be adapted to the size of the company and the geographical areas where the investments will be made. The rate will be increased by 10% for medium-sized businesses and 20% for small businesses. As for the "regional" increases, the rate will be raised to 25 % for investments made in ZAFRs (regional aid areas) and to 40% in the outermost regions.

C3IV ceiling

The amount of the tax credit available to the company will also be capped. The standard ceiling will be 150 M€. It will be increased to €200 million for investments made in ZAFRs and €350 million in the outermost regions.

Eligible investments

Eligible investments will be those related to production of new-generation batteries, solar panels, wind turbines and heat pumps. Investment expenditure will therefore be eligibleexcluding replacement costs, for the production or acquisition of tangible and intangible assets listed in the project.

To qualify for this tax credit, companies must meet certain conditions. In particular (this list is not exhaustive), they must not have relocated from the territory of the European Union in the course of the two previous financial years; they must not, in the course of the two financial years following the financial year in which the investments benefiting from the C3IV were commissioned, transfer them outside the national territory; and they must operate the eligible investments for a minimum period of five years from the date of commissioning (reduced to three years for SMEs).

Will certification be required to benefit from C3IV?

The answer is yes. The government has made receipt of the tax benefit conditional on approval. Bercy has already set up a link to submit an application for such approval, and undertakes to give an answer within three months. ADEME (l'Agence de l'Environnement et de la Maîtrise de l'Energie) will also examine the application.

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