Yahoo Finance France’s Green Energy Shift at Risk of Stalling If Le Pen’s Party Wins Elections
(Bloomberg) -- France’s plans to expand renewable energy and move away from fossil fuels is under threat from Marine Le Pen’s far-right nationalist party, which might win the most seats in legislative elections within weeks and scrap key environment policies.
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Tapping into anger among some voters that climate policies are hitting their wallets and freedom of choice, Le Pen’s National Rally has pledged to roll back major planks of the European Union’s historic Green Deal. A victory for the party could threaten utilities, renewables developers, turbine makers and car-battery manufacturers, putting France on a collision course over its green obligations to EU partners.
“We want to stop punitive green policies,” said Jean-Philippe Tanguy, who is in charge of the National Rally’s economic and energy platform, said in an interview. “We don’t want to abandon the plan to reach carbon neutrality by 2050, we want to achieve it with other means.”
If it forms the next government, the National Rally would halt the development of wind power, abandon a ban on the sale of gasoline- and diesel-powered cars slated for 2035, loosen housing-renovation requirements, and curb plans to exclude the most polluting vehicles from large cities. Instead it would focus on building new nuclear reactors and supporting the development of clean fuels such as hydrogen.
This policy program would be a seismic shift in the energy priorities of the EU’s second-biggest economy. President Emmanuel Macron, whose Renaissance party is currently in a distant third place in recent polls, had laid an ambitious road map for everything from wind, solar and nuclear power, to electric cars, building renovations and green gases. Now all of that is up in the air.
“All businesses that are subsidized and have an impact on populations, like wind, will be in great danger,” said Nicolas Rochon, the chief executive officer of fund manager RGreen Invest. “This will put a brake on the pace of new projects.”
Investors, already spooked by the broader economic impact of a possible National Rally victory, have been selling off French energy stocks. Power and gas utility Engie SA and renewable developer Voltalia SA have dropped more than most other shares traded in Paris in recent weeks.
Populist politicians around the world, from Donald Trump in the U.S. to Nigel Farage in the UK, have been vowing to roll back low-carbon policies and downplaying climate change ahead of key elections. The strategy appears to be working, with green political parties suffering big losses in European elections earlier this month.
In France, Le Pen’s party has surfed to greater popularity on the back of voters’ angst about the surge in gas and power bills resulting from Russia’s invasion of Ukraine. The National Rally has pledged to cut the value-added tax on gasoline, natural gas, heating fuel and electricity. The cost of this, which it estimates at €14 billion ($15 billion), would be partly funded by a temporary tax on windfall profits of power companies and lower subsidies for renewables, Tanguy said.
France’s influential Medef business lobby has criticized the campaign programs of both the far right and an alliance of leftist parties, saying they are a danger to the economy. Fulfilling Le Pen’s plans would cost about €100 billion, according to the Institut Montaigne think tank. Bloomberg Economics sees that whoever wins at the elections, the tendency will be to borrow more, and that the National Rally’s plans may lift the ratio of debt to gross domestic product to 121.5% in 2027 from 110.6% in 2023 — in breach of the EU’s fiscal rules.
Speaking at a session with Medef on Thursday, National Rally President Jordan Bardella disputed the €100 billion estimate, saying the party’s as measures will be “spread out” over time, depending on the financial and economic situation.
The greatest green policy change resulting from a win for the National Rally would be in wind, which accounts for about 10% of France’s power production. Macron plans to grant financial support for a major expansion, adding about 1.5 gigawatts of onshore wind projects annually and to tender for almost 16 gigawatts of offshore turbines by the end of 2026.
Tanguy, dubbed as the National Rally’s “Mr. Economy,” says France doesn’t need more wind power. The country’s electricity mix is already almost entirely carbon-free, he said, with about 90% coming from nuclear, hydro, wind and solar. He would even take down a limited number of turbines that are “ugly” in iconic tourist areas.
Le Pen’s party would also end support for new solar farm projects that use Chinese panels, while backing the construction of photovoltaic equipment in France, Tanguy said. Such a move could significantly slow developments because Europe hardly manufactures solar panels any more, and projects to build two factories in France have yet to get off the ground.
On nuclear power, National Rally would support the construction of 20 reactors by 2045, Tanguy said, going further than the six to 14 new atomic plants Macron wants state-owned Electricite de France SA to build. The cost of this would be partly offset by savings on power-network investments thanks to the slowdown in new grid connections for renewables, Tanguy said.
Some investors, such as Thierry Deau, the CEO of Meridiam SAS, which has more than $22 billion invested in infrastructure assets worldwide, are optimistic that the expansion of clean energy will continue in France.
“I don’t believe in a slowdown of investments in the energy transition,” Deau said in an interview. His fund just decided to reinvest in Allego NV, a company that builds car-charging networks in France and other European countries. “I’m also not worried for the European Green Deal.”
Clean-power developments have thrived under far-right governments in Italy, Hungary and Poland, said Rochon. Still, RGreen is pausing any investments that are heavily exposed to France for three months, he said.
The National Rally would need to win at least 289 seats at the end of the two-round election on June 30 and July 7 to get a majority in the National Assembly, a prerequisite set by Bardella for him to become prime minister. The party held 88 seats in the prior parliament.
Given the structure of French elections, predicting final seat counts before voting starts is difficult. For the first round, polls showed the National Rally leading with 32.7% of voting intentions. A leftist alliance, called the New Popular Front, was second on 26.3% while Emmanuel Macron’s Renaissance party and its allies were in third place.
(Updates with details on financial impact of NR plans in 10th paragraph.)
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