Constitutional Court Skewers French Carbon Tax

by Ulrika Lomas, LawAndTax-News.com, Brussels

04 January 2010

France’s Constitutional Court has declared the new carbon tax – which was to be introduced on January 1 – to be unconstitutional, a blow to President Nicolas Sarkosy’s ambitions for a greener France.

The new tax was one of the highlights of the 2010 budget, and was seen as an important milestone in the country’s fight against climate change. The court, however, found the tax to be subject to too many exemptions in favor of heavy industry – in other words, the highest polluters – while ordinary consumers and factories were to be subject to higher fuel costs through higher taxation. The court claimed that 93% of emissions from industrial sources would be exempt from the tax.

The court’s decision is seen as a major blow to Sarkozy, who was keen to promote his green credentials at the Copenhagen climate change conference. The tax was expected to raise over EUR4bn in 2010.

Prime Minister François Fillon, who is currently in charge of French government while the President is on his Christmas break, said the government will work towards a new carbon tax policy that will take account of the court’s ruling.

The court’s decision will likely be good news to the majority of French citizens, around two-thirds of whom opposed the new tax.

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