Of the approximately 85 billion euros of gross investment needed on average each year between 2024 and 2030 in the building and road transport sectors, only a third would be profitable without public intervention if energy prices remain at their 2024 level. Their profitability would improve over time, particularly in road transport, thanks in particular to technological advances in electric vehicles. In the building sector, on the other hand, energy retrofits, and in particular thermal insulation, would generally not be profitable under our assumptions, barring significant intervention by the public sector. Only switching heating systems from oil and gas to heat pumps would be significantly profitable. To make unprofitable investments profitable, transfers of around €19 billion a year would be required between 2024 and 2030 (compared with an estimated subsidy volume of around €8 billion in the 2024 government budget - not counting non-budgetary schemes). To limit the impact on public finances, regulatory incentives, environmental penalties on the purchase of brown assets or the use of carbon taxes could be favored. Where subsidies are necessary, they should be tailored to household incomes to limit windfall effects and encourage the most modest households to participate in the transition. Nevertheless, even if profitability is assured, some households will face financial constraints that prevent them from making these investments. Many do not have sufficient liquidity and may have difficulty accessing credit. For example, credit repayments for the purchase of a new electric car would exceed 21% of income for half of French households. Less well-off households, in particular, will therefore need additional support to finance these investments.
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