Bakers will benefit from the extension of electricity tax relief into 2025, alleviating concerns over rising energy costs. The tax rate remains at €0.5 per megawatt-hour, with various savings depending on their contracts. While general consumers may face tax increases, bakers are protected. Energy costs represent 5% to 10% of their annual revenue, with potential annual savings of up to €4,000 through improved energy efficiency. Eligible bakeries can seek reimbursement for the same excise tax as regular consumers.
Positive News for Bakers: Electricity Tax Relief Extended
Great news for bakers: they won’t face an increased burden from electricity taxes (previously known as TICFE or CSPE) set to take effect next February. The government has decided to uphold the tax benefits established for various industrial electricity users in 2024, extending them into 2025. With approximately 35,000 bakers affected by the rising energy costs, this decision comes as a relief amidst the ongoing energy crisis.
Details on Tax Rates and Impacts on Bills
This initiative is subtly woven into the finance bill, confirming that the tax will remain at €0.5 per megawatt-hour for the upcoming year. A representative from the Budget Minister’s office, Laurent Saint-Martin, emphasized that energy-intensive industries will continue to enjoy a lower tax rate.
The impact on electricity bills largely depends on the type of contracts bakers hold. While the general public may see an increase in taxes on their bills, which the government aimed for but has been rejected by the National Assembly, bakers will be shielded from this rise. Should there be an increase, it’s anticipated that a general decline in electricity market prices will offset that, allowing the government to project a 9% decrease in consumer bills.
For bakers, the extent of their savings will vary based on their specific contracts. Those with blue tariff meters—about 10 to 20% of bakers—could see reductions in their bills ranging from 15% to 20% come February. Conversely, bakers with yellow tariff contracts or fixed offers who have already benefitted from price drops may not experience further reductions but are guaranteed to avoid any tax hikes.
“Electricity costs account for approximately 5% to 10% of a baker’s annual revenue,” explains Jean-Baptiste Sizes, the founder of Eigrene, a company dedicated to assisting bakers in managing their energy usage. “This is certainly welcome news for them.” The significant consumption stems mainly from ovens, which alone represent nearly half of their electricity usage. Eigrene aids bakers in optimizing their consumption by transitioning from gas ovens to electric ones or upgrading to more energy-efficient models.
According to Jean-Baptiste Sizes, “There are substantial energy savings to be made in this sector, potentially up to €4,000 annually, while also reducing the environmental impact related to greenhouse gas emissions.” Notably, French bakeries are responsible for about 3% of the country’s industrial electricity consumption.
As for the tax benefits, eligible bakeries must take necessary actions: while they will pay the same excise tax as regular consumers, they can subsequently seek reimbursement from state services.