Carbon tax dropped but not yet buried
France says it will lead calls for an EU-wide tax on carbon emissions after abandoning plans to bring in the law here
BUSINESSES and consumer groups have welcomed the government's announcement that it is shelving plans to introduce a "carbon tax" on fuel emissions.
The tax on petrol and gas was originally due to come into force on January 1 but had to be redrafted after it was thrown out at the very last minute by the Conseil Constitutionnel.
Prime Minister François Fillon said the revised tax - which the government had hoped would come into force on July 1 - would not be going ahead because it risked harming French industrial competitiveness.
The government has said it will press ahead with the idea of taxing emissions - but any future law would have to apply on an EU scale and not just in France.
Economy Minister Christine Lagarde said the plan had not been completely abandoned and she was "very optimistic" that the EU would look into such a tax.
A Green party spokeswoman said it was against the tax - but was disappointed that shelving it meant a better alternative might never be drawn up.
Poitou-Charentes president Ségolène Royal said she had always believed that the tax would be "unfair and ineffective" because it penalised people living in rural areas without access to public transport.
The Medef employers' federation said the tax would have been a "competitive handicap" for companies. Consumer watchdog UFC-Que Choisir said the government was right to abandon the tax plan, but needed to think of an alternative, fairer way of taxing those who pollute the most.
The carbon tax was unveiled by Nicolas Sarkozy in 2009 and was one of the key elements of the 2010 budget, alongside the scrapping of the taxe professionnelle.
It would have seen four or five centimes added to the price of a litre of fuel - the equivalent of €17 per tonne of CO² emissions - with a similar rise in gas prices.
The tax was estimated to bring in about €4bn in the first year, split equally between households and businesses.
It was also expected to provide extra government income via VAT, which would have been levied after the tax.
The tax had to be redrafted in January after the Conseil Constitutionnel ruled the first version was unfair and failed to target some of the most polluting businesses.
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