31 Dec 2009

Carbon tax ruled illegal in France

7:12 pm on 31 December 2009

The Constitutional Council in France has ruled that a new carbon tax that was supposed to take effect in the New Year, is illegal.

The Council said there were too many exemptions in the plan: 93% of industrial emissions, other than fuel use, would be exempt from the tax.

The tax was set at €7 per tonne of emitted carbon dioxide


Prime Minister Francois Fillon has said the government will now work on a new law taking account of the legal ruling.

The BBC reports the tax was intended to encourage consumers to use less oil, gas and coal. It would have meant a rise in the price of fuel for cars, domestic heating and factories.

But it did not apply to the heavy industries and power companies included in the EU's emissions trading scheme.

Most electricity in France - excluded from the carbon tax - is nuclear-generated.

According to Le Monde newspaper, the tax would have generated about €4.3 billion of revenue annually.