France eyes new carbon tax in 2012 budget

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France's conservative government is including a new one-off carbon levy in its €11 billion cuts package, but weakening growth may spell even more belt-tightening to meet sacrosanct deficit targets.

French GDP growth halted in the second quarter of this year as domestic demand contracted, France's statistics office confirmed on Wednesday (28 September).

It also said the government would introduce an exceptional surcharge for industrial firms using carbon dioxide emissions quotas, worth some €250 million next year. A government official confirmed the one-off measure but declined to comment on its revenues.

The French newspaper Le Figaro reported that the tax would vary between 0.08% and 0.12%, rather than a more complicated per-tonne levy on emissions.

Electricity companies, mainly French utility Electricité de France SA would pay a third of that, the newspaper said.

In 2010, Nicolas Sarkozy's government backed away from proposals to introduce a per-tonne penalty on carbon use, after fierce opposition from the business lobby.

France's highest court struck down the proposed measure just 48 hours before it was due to take effect and the government then put a revised version on ice, citing a lack of agreement with other European leaders.

French prime minister François Fillon said at the time that better coordination was needed "so as not to widen our gap in competitiveness with our neighbour Germany".

That tax had been expected to raise €1.5 billion, some six times more than the current measure.

EURACTIV with Reuters



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