In July, France has outlined plans to impose a carbon tax with the Rocard Proposal. This aims at leaving a CO2 tax on non-ETS sectors, especially on final consumption of fuels. Under this plan, France would charge non-ETS sectors 32 euros for every tonne of carbon dioxide emitted in 2010 and lift to 100 euros per tonne in 2030, in real terms. However, the Constitutional Court rejected last December the government’s original plan because the large number of exemptions for big emitters already covered by the EU ETS in the legislation would put an unfair burden on consumers. A new bill is expected to be presented to the French parliament soon which will consider the possibility to put into force the carbon tax on July 1 2010 and to subjects industrial installations under the ETS to a carbon tax until 1 January 2013. The European Commission is also considering to impose an EU-wide tax on CO2 emissions by 2013 on sectors such as transport and agriculture, which are currently not covered by EU ETS. This could be done through the amendment of the 2003 Energy Taxation Directive. According to the draft, motor fuels would be taxed either €0.01 or €0.03 per kg/CO2, depending on where they are used while a minimum levy of €0.01 per kilogramme of CO2 could be added to the price of heating fuels like gasoil, kerosene and natural gas. Finally, biomass would be exempt from CO2 taxation under the directive as carbon neutral at end use. So far, carbon tax is not a new tool. It has been implemented since the early 1990s in some Scandinavian countries as complementary to ETS.

For more information on international negotiations and national policies, see Box1. Carbon tax around the world.

International Climate Policy and Carbon Markets

This news is extracted from International Climate Policy and Carbon Markets, a bi-monthly report aiming to provide a clear analysis of the worldwide evolution of the carbon market, and of the international and domestic climate policies. Download the last issue, N. 6 January 2010 [254 Kb].