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03/12/2016

Paris withdraws plans for carbon tax on coal

Energy

Paris withdraws plans for carbon tax on coal

Coal-fired power stations in France are currently exempt from the domestic carbon tax.

[Alexander G/Flickr]

Pressure from the miners’ and energy workers’ union CGT forced the French government to back down on extending the carbon tax to coal-fired power stations. EurActiv’s partner Journal de l’Environnement reports.

French governments have always struggled to tax emissions from coal. In 2009, François Fillon had to abandon the idea after his plans were struck down by the Constitutional Council. This time, the plan has been sunk by the country’s biggest union of miners and energy workers.

On 25 April, President François Hollande announced the introduction of a minimum quota price for greenhouse gas emissions from combustion power stations. “This price will give more visibility to investors and promote the use of gas over coal for the electricity sector,” Hollande said.

After an aggressive lobbying campaign by the energy company Engie, the measure was restricted to the country’s four remaining coal-fired power stations. Two are operated by EDF, in Le Havre and Cordemais, and two by Uniper (formerly E.ON), in Gardanne and Saint-Avold.

The tax was supposed to be introduced as part of France’s 2017 budget. Gérard Mestrallet, the former boss of Engie, is a member of the committee tasked with working on the carbon price.

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Chanteguet and Bardy amendment

But this will not happen as planned. Overnight from Thursday to Friday (20-21 October) the Secretary of State for the Budget, Christian Eckert, removed the amendment to introduce the carbon tax, which had already been approved by the French parliament’s sustainable development committee.

Presented by the Socialist MPs Jean-Paul Chanteguet and Serge Bardy, the text would have ended the exemption of France’s fossil-fired power stations from the domestic consumption tax on coal (TICC).

The amendment was rejected by the government after demonstrations organised by the union CGT on Thursday. Demonstrators doubtless had some persuasive arguments for Eckert, the MP for Meurthe-et-Moselle, which neighbours the Saint-Avold coal power station.

Putting it off

After burying the amendment, the secretary of state proposed introducing the tax at a later date. He stressed that under France’s multi-annual energy programme, these coal-fired power stations should be closed down “by 2023 at the latest”.

But the environment ministry has been making different noises, arguing that the tax on coal should be enacted at European level.

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Do as I say, not as I do

This latest failure to tax emissions from coal is doubly problematic for France. Just days before the opening of the COP 22 in Marakesh, the host of the COP 21 is sending a message to the world that it should “do as I say, not as I do”. It will also give a significant financial boost to EDF and Uniper, which will be able to run their power stations at full capacity and take advantage of soaring electricity prices.

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