New financial aid for energy-intensive businesses

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New financial aid for mid-sized companies with high energy consumption

Decree No. 2024-251 of March 22, 2024, published on March 23, introduces a highly beneficial aid package for companies significantly impacted by the increase in electricity supply costs due to the war in Ukraine. Adopted following a European Commission decision approving the implementation of emergency aid¹, it establishes financial assistance for private or public legal entities to cover energy expenses (electricity, natural gas, or heat/cold produced from these sources) incurred throughout 2024.

Cumulative conditions

Eligibility for the aid is subject to meeting several conditions.

The decree sets requirements regarding the company's number of employees, turnover, energy consumption, and sector of activity.

• Conditions regarding number of employees and turnover:
  • The company must employ fewer than 5,000 people;
  • Its turnover must not exceed €1.5 billion, or its balance sheet total must not exceed €2 billion.

               / ! / The same thresholds apply to a group of companies.

• Conditions regarding activity:
  • The company must have been established no later than June 30, 2023;
  • The company’s primary activity must not be in the energy, credit, or financial sectors (an activity is considered primary if it generates more than 50% of the company's total turnover);
  • If the company is an association, it must be subject to commercial taxes and employ at least one salaried worker.

• Conditions regarding energy consumption:
  • The company must have at least one electricity supply contract in effect in 2024, signed or renewed before June 30, 2023.
  • The company’s energy consumption (electricity, natural gas, or heat/cold produced from these sources) during any quarter or month of 2024 must represent at least 3% of its turnover during a past reference period (the same quarter, the same month, or the entire reference period adjusted to the duration of the eligible period).

The reference period is mandatory and varies depending on the company's date of incorporation, as follows:

·  For companies created on or before December 31, 2020, the period from January 1^st 2021 to December 31, 2021;

·  For companies created between January 1^st 2021 and December 31, 2021, the period from January 1^st 2022 to December 31, 2022;

·   For companies created between January 1^st 2022 and December 31, 2022, the period from January 1^st 2023 to December 31, 2023;

·  Finally, for companies created between January 1^st 2023 and June 30, 2023, the period from July 1^st 2023 to December 31, 2023.

Specific conditions for the payment of the aid are also detailed for each eligible period.

Exclusion of certain business categories

The decree expressly excludes certain categories of businesses from the scope of the aid:

• Businesses that have received group-level aid exceeding certain thresholds (€280,000 for businesses in the primary agricultural production sector, €335,000 for those in the fisheries and aquaculture sectors, and €2,250,000 for others).
• Businesses eligible for the 2024 electricity price buffer scheme (specifically, businesses with fewer than 250 employees and an annual turnover not exceeding €50 million or an annual balance sheet total not exceeding €43 million).
• Businesses subject to European Union sanctions, or those that are part of the persons, entities, or bodies specifically designated in the legal acts establishing such sanctions; businesses owned or controlled by persons, entities, or bodies targeted by EU sanctions; or businesses operating in sectors targeted by EU sanctions.
• Businesses in receivership, liquidation, or safeguard proceedings at the time of the aid application. Once eligibility is confirmed, the aid cannot be paid if the application for one of the quarters (see below) coincides with any of these situations. It may, however, be paid for initial applications if, for example, the business enters liquidation between the third and fourth payment requests.

Application process

Eligible businesses have until May 31 to submit their aid application online. Applications must be filed via the tax authority website along with all required supporting documents. The Directorate General of Public Finance will then notify businesses of their eligibility for the aid no later than June 30, 2024.

Following receipt of the notification, the business must then submit payment requests for each of the following quarters:

• For January, February, and March 2024: between April 15, 2024, and July 31, 2024;
• For April, May, and June 2024: between July 15, 2024, and October 31, 2024;
• For July, August, and September 2024: between October 15, 2024, and January 31, 2025;
• For October, November, and December 2024: between January 15, 2025, and April 30, 2025.

Aid amount

The aid amount is equal to 50% of the total eligible cost for each eligible period considered, subject to certain conditions.

Application requirements

The application must include:

• A sworn statement confirming that the company meets the aforementioned conditions and that the information provided is accurate;
• A certificate from an accountant or statutory auditor (or the public accountant assigned to public law entities) containing specific mandatory information as required by regulation;
• The aid calculation file, following the template available on the impots.gouv website;
• The gross operating surplus calculation file, following the template available on the impots.gouv website;
• The trial balance for the eligible period or the reference year;
• The energy invoices used for the 3% calculation, a summary list of these invoices following the available template, and the signed or renewed supply contracts;
• The company's bank account details.