Zero-interest loan for residents and small businesses in France’s low emission zones

From January 2023, people and companies living or working in or next to low emission mobility zones (ZFE-m) in France can apply for a zero-interest loan to buy a low-emission vehicle. In accordance with a new Decree, adopted in April 2022, the loan will be available for people whose household tax income does not exceed EUR 14,000, as well as for micro-enterprises with fewer than 10 employees and a turnover or balance sheet total that does not exceed EUR 2 million.    

In the fight against climate change, low emission mobility zones (ZFE-m) are being created in cities throughout France. Within these zones access is restricted for the most polluting vehicles. Currently, 12 ZFE-m have been set up, but ZFE-m must be set up in the 43 agglomerations of more than 150,000 inhabitants before 31 December 2024.

Acquiring a clean vehicle may be hard to afford for some low-income households and small businesses. The introduction and extension of ZFE-m could particularly affect vehicle accessibility of these low-income households and businesses residing in that area. The zero-interest loan is to help these households and businesses to buy or lease a low-emission vehicle. In this way, averse accessibility impact on these groups could be limited, while supporting the renewal of the vehicle fleet towards low/zero-emissions.  

The loan, with a maximum of EUR 30,000, can be used to purchase vehicles with a maximum value of EUR 45,000 for a car, or EUR 60,000 for a van, with a maximum total laden weight of 2.6 tonnes. In addition, loans can only be used for vehicles with CO2 emission of less than 50 grams per kilometre. Only electric vehicles, or certain plug-in hybrid vehicles, meet this threshold.

The loan can also be used for the long-term rental or rental with option to buy such vehicles. In these cases, the amount of the loan is reduced to EUR 10,000 and the repayment period of the loan is that of the rental contract.

The loan scheme will exist for a period of two years, after which it will be evaluated by the Minister for the Economy and the Minister for Transport.