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France marches for renewables

French-exports-report

France’s new president has been rallying for climate policy both nationally and internationally. Aleya Begum reports.

 

Since winning the election in May this year, French President Emmanuel Macron has been making international headlines. From his meeting with Russian President Vladimir Putin, whom he invited to Versailles but openly challenged on several issues, to his strolls with Canadian Prime Minister Justin Trudeau along flowered pathways that had the internet gushing, the French leader has been in the limelight.

One area where he has received considerable attention is his strong stance on climate policy and his commitment to continue pushing France towards a more renewable energy mix. Since US President Donald Trump’s announcement that he is pulling the US out of the 2015 Paris Agreement on climate policy, Macron’s dedication has been highlighted – through both his direct response to the US president, whom he called on to “make the planet great again”, as well his efforts to rally international support.

 

At home

Macron’s election manifesto holds several key measures for France relating to the environment, including shutting down all coal power plants within five years and reducing the amount of power from nuclear energy. Meanwhile, the president says he will ban all new shale gas exploration and wants to double wind and solar energy capacity.

France has carried out a series of significant environmental reforms in the last few years, including the Grenelle Laws in 2009 and 2010 and the Energy Transition and Green Growth Law in 2015. Grenelle I outlines France’s objectives on sustainable development, while Grenelle II provides the framework for implementation. The law is divided into six target areas: buildings and urbanisation, transport, energy and climate, biodiversity, health and governance.

The energy transition law is designed to give France the means to diversify its energy mix and bring in binding energy targets for transport, housing and renewable energy. Some ambitious national targets include cutting greenhouse gas emissions by 40% compared to 1990 levels by 2030 and by 75% by 2050; cutting national energy usage by 50% by 2050; reducing the share of fossil fuels in energy production by 30% compared to 2012; capping the total output from nuclear power at 63.2GW and reducing reliance on nuclear power from the current 75% to 50% by 2030.

Macron’s pledges push these targets further. His deadline for shutting down coal power plants is sooner and the reduction in nuclear is scheduled five years ahead of the transition law. He has also promised to accelerate research and development and investment for energy storage and smart grids, as well as increase the French carbon tax to €100 per tonne by 2030. He’s also said he will put out a five-year calendar for tenders to develop 26,000MW of renewable projects “at the beginning of” his presidency – all indicating a boon for the renewables industry.

The sector will no doubt benefit from Macron’s appointment of environmental activist Nicolas Hulot as head of energy policy. Hulot, a former press photographer who rose to fame on the back of environmental documentaries, will be minister of ecological and solidarity-based transition, in charge of the ministry of the environment, energy and marine affairs.

 

Abroad

In his victory speech, Macron promised to promote international co-operation on climate change and assured world leaders that France would be a constructive partner on matters of global concern.

“France will be active and mindful of peace, of the balance of power, of international co-operation, of respect for the commitments made on development and the fight against global warming,” he said.

Among his manifesto pledges, Macron calls for the use of trade sanctions, at EU level, against countries that do not adhere to the bloc’s environmental standards. The proposal was seen by many as a warning to the Trump administration to stick to the commitments made by the US at COP21 in Paris, and to the UK to avoid weakening environmental protections during Brexit negotiations. When Trump announced the US’ withdrawal from the Paris accord, the French leader called the decision “a mistake both for the US and for our planet” and invited American climate researchers to France.

“To all scientists, engineers, entrepreneurs, responsible citizens who were disappointed by the decision of the president of the US, I want to say that they will find France a second homeland. I call on them: come and work here with us,” Macron says in a Twitter video.

Since the appeal, the president has also launched a “Make Our Planet Great Again” website, where researchers interested in taking up his invitation can apply for up to €1.5mn in grant funds.

Macron has met with various world leaders since his election win. Notably, in his meeting with Indian Prime Minister Narendra Modi, just days after Trump’s announcement, the two leaders vowed to “fight against global warming”, and both pledged to go above and beyond the Paris commitments.

During the Paris climate talks, the two countries launched the International Solar Alliance. The alliance seeks to mobilise more than US$1tn by 2030 and bring together over 100 solar-rich countries to deliver energy to some of the planet’s poorest communities.

 

Banks get on board

French banks have also backed a green goal. Last September, the French Banking Federation (FBF) acknowledged that the cost of funding the energy transition was a key element and proposed a “green supporting factor” to assist. The supporting factor comprises three components: firstly, reduced capital requirement for financing; secondly, asset eligibility based on specific terminology and labelling as climate transition assets; and finally, eligibility to extend to individuals and SMEs making greener purchases.

“Our green supporting factor proposal will help speed up funding of the energy transition in France and Europe. For France this is also an opportunity to step up its role in funding green growth,” said director of FBF Marie-Anne Barbat-Layani when the plans were announced during Responsible Finance Week.

Earlier this year, Société Générale halted all future financing of coal projects anywhere in the world and committed to increasing its green exposure. The bank will also scale back its outstanding loans to the coal industry, with the goal of reducing the proportion of coal-fuelled power in its energy portofolio to 19% by 2020. Last year the bank said it maintained its position among the world leaders in renewable project financing and was involved in a majority of offshore wind projects in Europe, including the Dudgeon farm in the UK, Mercur in Germany and Rentel in Belgium.

Moreover, the bank has committed to restructure its energy portfolio in line with the energy mix defined by the International Energy Agency (IEA) as necessary to limit the average global temperature increase to 2°C.

“We have committed to ban coal financing as of January 1, 2017– be it mining or coal fired-power projects and related infrastructures anywhere in the world. This ban was active as of January 1, 2017,” global head of energy at Société Générale CIB, Olivier Musset, tells GTR.

“We now have the ability to track all our lending and to break it down in terms of energy stock. 90% of our new origination in the power sector is for green energy, including wind, solar and hydro. This is where the world is currently investing so that’s where we can get involved.”

BNP Paribas has also announced new strategies to align with tackling the 2°C scenario. At the end of 2016, the bank said it planned to better measure, disclose and reduce carbon risks in its portfolios and encourage companies to report and reduce their carbon footprints. In March, the bank committed to becoming carbon-neutral by the end of the year in terms of CO2 emissions arising from its own operations.

However, a recent report Banking On Climate Change 2017, found that French banks were still ploughing money into heavy oil and gas. The report ranks 37 major global banks’ policies and practices around financing of the most carbon-intensive, financially risky and environmentally destructive sectors of the fossil fuel industry. BNP Paribas, Société Générale and Crédit Agricole were all reviewed for financing activity in the 2014 to 2016 period, and were ranked at 15th, 17th and 25th place respectively – investing a total US$20.62bn between them.

The Paris Agreement saw 197 countries sign up to strengthen the global response to climate change. While by no means exclusively a French initiative, despite the name (which appears to have confused Trump who said he wants to talk to the citizens of “Pittsburgh, not Paris” as he pulled out of the deal), the new French president is on route to lead the march for climate policy and renewables.

But while the banks appear to be changing course, it seems they are not quite ready to give up on dirty fossils.

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