Tax credit for investments in green industries- Heat pumps

France introduced in 2024 a tax credit for industrial investments in 4 key sectors, as part of its Green Industry Law aimed at decarbonising the domestic industry, as well as developing domestic low-carbon production capacities. 

Battery, heat pump, wind and solar PV equipment new production projects across the entire value chain benefit from a 20% investment tax credit. Small and Medium-sized Enterprises, as well as project beneficiaries operating in regions recognised under the European Commission Regional Aid Guidelines (RAG), benefit from higher tax credit rates.

A related EUR 2.9 billion State aid was approved in January 2024 by the European Commission under the State aid Temporary Crisis and Transition Framework to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.

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