Background information

The Transition Obligations is a financing tool to support SMEs and intermediate-sized companies to develop their decarbonization efforts. Guaranteed by the French government, this scheme will provide long-term financing for a greener economy and growth. Provided for in the art. 185 of the 2024 Finance Act, this is a new type of bond that is a state-guaranteed long-term financing scheme with a fixed term of eight years and a four-year grace period.

Content of measure

From the beginning of 2025 to 31 December 2029, SMEs and intermediate-sized companies engaged to the ecological transition are eligible to this fiscal benefit. In detail, the criteria for eligibility is: - to finance projects to improve the environmental performance of the companies concerned;
- to directly finance SMEs whose main activity contributes to the ecological transition (known as 'solution’ SMEs);
- to directly finance SMEs that have engaged on a decarbonisation process (known as ‘transition’ SMEs).

In monetary terms, the transition obligations will be composed by two funds managed by partner management companies: an interest alignment fund, which will house 20% of the assets (not guaranteed by the State) and a public fund that will hold 80% of the assets. The French government will provide a 100% guarantee on any initial losses (up to a limit of €5 billion and a maximum of 30% of the fund's assets).

Use of measure

There is no available data about the estimated number of companies eligible receiving payments of this bond.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	SMEs One person or microenterprises Other businesses Start-ups	Does not apply to citizens

Actors and funding

Actors	Funding
National government	Companies National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

The Transition Obligations is a government policy to promote the economy and the green transition, although with the participation of private partners. There is no data on the participation of social partners in the contribution process of this measure.

Views and reactions

To this moment, there is no reaction from social partners.

Sources

• 23 December 2023: LOI n° 2023-1322 du 29 décembre 2023 de finances pour 2024 (1) (www.legifrance.gouv.fr)
• 07 July 2024: Décret n° 2024-752 du 7 juillet 2024 relatif à la garantie de l'Etat prévue à l'article 185 de la loi n° 2023-1322 du 29 décembre 2023 de finances pour 2024 (www.legifrance.gouv.fr)
• 19 November 2024: Arrêté du 19 novembre 2024 relatif à la garantie de l'Etat prévue à l'article 185 de la loi n° 2023-1322 du 29 décembre 2023 de finances pour 2024 (www.legifrance.gouv.fr)
• 22 November 2024: Qu’est-ce qu’une obligation transition ? (www.economie.gouv.fr)
• 22 November 2024: Infographie sur les Obligations transition Découvrez notre infographie sur les Obligations transition (www.economie.gouv.fr)