This article was published about a bill that was still under discussion at the time. The legislation has since changed.
Greening company fleets is not a new subject. Since the 2019 Mobility Orientation Law (LOM), French companies with more than 100 vehicles have been required to renew their fleet with low-CO2-emission cars. But the expected results have not materialised. In 2022, 66% of the companies subject to this law did not reach the first target of 10% set by the law. In response, Damien Adam, an MP from the Renaissance party, worked on a new bill, debated on 30 April in the French National Assembly.
Towards an ecological transition
Company vehicle fleets are receiving particular attention because they play an important role in the ecological transition of the car market.
Accounting for 52.5% of new car sales each year, professionals have a direct impact on demand for new vehicles. They also feed the used car market, which is widely used by private individuals.
Growing demand for green cars will therefore reduce the number of polluting vehicles produced and put on the road each year, and will also influence used car purchases.
The French government has been trying to meet this challenge since the LOM law was enacted in 2019, followed by the Climate and Resilience law in 2021. For companies, electrifying a vehicle fleet also has advantages. Beyond complying with government regulations, it is notably more cost-effective in the long term.
Measures already in place
The bill on greening company fleets builds on the measures already introduced under the LOM and Climate and Resilience laws.
The LOM law
Published in the French Official Journal on 26 December 2019, the Mobility Orientation Law, known as LOM, aims to transform transport by making it easier to access, cheaper and greener.
To do this, many measures have been introduced, including one on greening professional vehicle fleets. Companies managing a fleet of more than 100 vehicles must choose low-emission vehicles when renewing their fleet. Vehicles emitting no more than 50 g of CO2 per kilometre are considered low-emission.
For these vehicles to make up at least 50% of fleet renewals, a step-by-step system was introduced:
- 10% in 2022
- 20% in 2024
- 35% in 2027
- 50% in 2030
These figures were later revised by the Climate and Resilience law.
The Climate and Resilience law
Dated 22 August 2021, the Climate and Resilience law aims to significantly reduce greenhouse gas emissions in France.
Like the LOM law, it tackles many subjects, including mobility. For company vehicles, it changes the steps set in 2019, making them more ambitious:
- The 35% rate planned for 2027 rises to 40%;
- The 50% rate planned for 2030 rises to 70%.
These results are proving hard to achieve. While companies should have reached the first 10% step by 1 January 2022, in 2023 60% of them were still not there.
This is explained by the lack of penalties in the law. Although there is a reporting obligation, failure to comply is not penalised. Damien Adam took this into account in his new bill, which seeks to have these measures applied quickly. All the more so as the ban on the sale of petrol, diesel and hybrid vehicles was decided by the Council of the European Union on 28 March 2023, with the ban taking effect from 2035.
What the bill proposes
The bill "to accelerate and monitor the greening of vehicle fleets" was tabled in the French National Assembly on 30 January. Led by Damien Adam, an MP from the Renaissance party, it was examined by the Committee on Sustainable Development and Regional Planning on 9 April. To date, it consists of 4 articles setting out the new steps companies must reach, their obligations and the penalties they face for non-compliance.
The new steps
Taking into account the challenges of the climate transition and the future ban on combustion-engine vehicles, the bill revises fleet renewal rates and adds to them to reach 90% very-low-emission vehicles by 2032.
Still aimed at companies with more than 100 cars, the new bill changes which vehicles are counted. As the ban on combustion-engine vehicles also applies to hybrids, they are removed from the definition of low-emission vehicles, now called very-low-emission vehicles.
Electric and hydrogen cars are therefore considered very-low-emission vehicles. Electric cars with an eco-score are favoured, earning the company more points. With this measure, Damien Adam wants to favour French and European manufacturers, which are more likely to obtain this bonus.
The new steps, set out in Article 1 of the bill, are as follows:
- 20% in 2025;
- 30% in 2026;
- 40% in 2027;
- 50% in 2028;
- 60% in 2029;
- 70% in 2030;
- 80% in 2031;
- 90% in 2032.
Note that short-term rental companies have a specific scale because they renew their fleet more often. However, the goal remains the same, with 90% of the fleet renewed by 2032.
As for the types of vehicle concerned, the bill includes cars, mopeds, motorbikes and scooters, licence-free cars (quadricycles) and tricycles. Some light commercial vehicles may be added to this list on a case-by-case basis.
As with the LOM law, this fleet renewal trajectory comes with a reporting obligation, but also a training obligation.
The obligations
Article 2 of the bill deals with transparency and monitoring. The reporting obligation is maintained, requiring the companies concerned to report their results to the administrative authority every year.
To ensure this obligation is respected, a financial penalty of 0.1% of the company's turnover is planned.
The same article includes a training obligation for fleet managers, who will have to be trained in the specific features of electric vehicles. They will then have everything they need to promote electric mobility within their company.
Beyond the penalty for failing to submit the report, Damien Adam's bill plans to penalise companies that do not reach the required thresholds.
The penalties
A new addition to the LOM law, penalties for failing to follow the fleet renewal trajectory are set out in Article 3. They will apply from 2025 and increase over the years:
- €2,000 per missing vehicle in 2025;
- €4,000 per missing vehicle in 2026;
- €5,000 per missing vehicle from 2027;
The amount of the penalty may not exceed 1% of the company's French turnover. Another penalty, this time non-financial, is exclusion from public contracts, set out in Article 4 of the bill. Companies that do not comply with the law will no longer be able to access certain public contracts.
Key takeaways
In short, the bill on greening company fleets updates the LOM and Climate and Resilience laws, taking the current situation into account and strengthening the requirements on companies.
To do this, it plans to:
- remove hybrid vehicles from the list of low-emission vehicles to anticipate the 2035 ban on combustion-engine vehicles;
- introduce new, more ambitious intermediate thresholds to reach 90% very-low-emission vehicles in fleets by 2032;
- penalise companies that get around their reporting obligation;
- introduce a training obligation so that fleet managers are informed about the features of electric cars;
- penalise any company that does not reach the thresholds required by law on time.
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