URIError: Failed to decode param ‘/%PUBLIC_URL%/favicon.ico’

Quick fix

What if you were to replace %PUBLIC_URL% with the actual path. I think that Babel is having issues transpiling the %. Try replacing %PUBLIC_URL%/favicon.ico with /public/favicon.ico and the issue is resolved.

Better fix

Add a new rule to your webpack.config.js.

//...
{
  test: /\.(png|svg|jpg|jpeg|gif|ico)$/,
  exclude: /node_modules/,
  use: ['file-loader?name=[name].[ext]'] // ?name=[name].[ext] is only necessary to preserve the original file name
}
//...

Then have the .ico resource copied to the dist directory by adding an import in your App.js. import '../public/favicon.ico';

In your index.html; <link rel="shortcut icon" href="https://stackoverflow.com/questions/50824024/favicon.ico"> to make use of your icon. No longer need to provide a path since it will be copied to the dist directory

OR:

In addition to the rule added to the webpack.config.js mentioned above, adding plugins to the webpack config may be a better way to go depending on your setup.

For me this looks like adding the npm package html-webpack-plugin to the project. Then requiring it in the webpack config; const HtmlWebpackPlugin = require('html-webpack-plugin');. Then adding plugins to the module.exports.

//...
plugins: [
  new HtmlWebpackPlugin({
    template: './public/index.html',
    filename: './index.html',
    favicon: './public/favicon.ico'
  })
]
//...

Going this route and doing the work in the webpack config means the line added to the App.js to import the favicon.ico will no longer be necessary.

EDIT: As mentioned by @Tolumide

Don’t forget to configure the webpack.config appropriately per environment.