French businesses could be taxed twice on carbon emissions

Some businesses in France could end up being taxed twice for their carbon emissions under the French government’s proposed carbon tax, it has been suggested. The tax will be levied […]

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Some businesses in France could end up being taxed twice for their carbon emissions under the French government’s proposed carbon tax, it has been suggested.

The tax will be levied on all fossil fuels in proportion to the carbon emissions they generate. The government is hoping it will bring in €4 billion by 2016, with the extra cash funnelled back into clean energy.

Former president Nicholas Sarkozy proposed a similar tax in 2009 but because it didn’t apply to companies already paying for emissions under the EU’s Emissions Trading Scheme (ETS), the tax was rejected by France’s Constitutional Council on the basis it was discriminatory.

It means some big businesses, including energy suppliers, may have to pay for emissions through both the ETS and carbon tax if the same pitfall is to be avoided.

Jean-Louis Schilansky, President of the Energy Commission for business lobbying group MEDEF is quoted as saying: “How they are going to overcome that [legal taxation equality] obstacle, frankly we don’t know. If they do the same as Sarkozy the Constitutional Council will say the same thing,” reported ICIS Heren.

The problem could be somewhat mitigated by dominance of carbon free nuclear power in the French energy mix.

However nuclear suppliers won’t get away unscathed, as the government is also planning to introduce levy on nuclear power to generate more money for clean energy.