Carbon Taxes > France passes sweeping energy bill, to raise CO2 tax to €100/t by 2030

France passes sweeping energy bill, to raise CO2 tax to €100/t by 2030

Published 17:40 on July 22, 2015  /  Last updated at 18:46 on July 23, 2015  /  Carbon Taxes, EMEA, EU ETS

French lawmakers passed a sweeping energy bill late on Wednesday that will both raise the country's domestic carbon tax to €100/tonne and cut its fossil fuel consumption by 30% by 2030, while reducing its reliance on nuclear power by a third within a decade in favour of more renewables.

(Corrects date of €56/t carbon tax to 2020 from 2022)

French lawmakers passed a sweeping energy bill late on Wednesday that will both raise the country’s domestic carbon tax to €100/tonne and cut its fossil fuel consumption by 30% by 2030, while reducing its reliance on nuclear power by a third within a decade in favour of more renewables.

French Environment Minister Segolene Royal said that she hoped it would set an example for other countries ahead of this year’s UN climate talks, which will be held in Paris from late November.

The bill contained a number of measures, including:

  • Cutting greenhouse gas output by 40% below 1990 levels by 2030 (a goal in line with the wider 2030 energy and climate package agreed by EU leaders last year)
  • Increasing France’s domestic carbon tax on natural gas, heating oil, coal and transport fuels to €56/t in 2020 and €100/t by 2030
  • Reducing nuclear power’s share in the energy mix to 50% by 2025
  • Decreasing fossil fuel consumption by 30% below 2012 levels by 2030
  • Ensuring renewable sources make up 23% of energy consumption by 2020, 32% of energy consumption by 2030 and 40% of electricity production by 2030
  • Slashing overall energy consumption to 20% below 2012 levels by 2030, and to 50% by 2050
  • Halving the amount of waste going to landfills by 2050

The government estimates the bill will also lead to the creation of 100,000 new green jobs in the country.

CO2 TAX

France introduced a domestic carbon tax last year, charging €7/tonne of CO2 on the consumption of natural gas, heating oil and coal.  Companies regulated by the EU ETS are exempt.

Under existing legislation, the tax was raised to €14.50/tonne and extended to cover transport fuels including gasoline and diesel in 2015, before increasing to €22 in 2016.

Under today’s bill, it then soars to €56 in 2020 and to €100 in 2030.

The law also caps the country’s nuclear output at current levels of 63.2 GW.  Just over three-quarters of France’s electricity comes from atomic reactors, making the country the world’s most reliant on nuclear power.

In contrast, only around 5% of France’s power comes from fossil fuels, so the tax increase will have little bearing on electricity prices.

However, the country relies on natural gas and fuel oil for much of its domestic heating, meaning the higher tax will raise some household bills while adding an estimated 7 cents to a litre of gasoline and 9 cents to a litre of diesel by 2022.

DELAYED

The long-awaited law to transition the country towards more renewable energy and away from nuclear power, a campaign promise made by President Francois Hollande back in 2012, had been delayed for years amid opposition from industry and some lawmakers.

Royal Wednesday’s approved law was the result of more than 5,000 amendments put up for public consultation, 970 amendments adopted by lawmakers, and more than 150 hours of parliamentary debate.

Political opponents to the bill had called the 2025 nuclear phase-out deadline unrealistic, warning that it could jeopardise France’s energy supply and potentially lead to the closure of a more than a third of its 58 reactors.

By Mike Szabo – mike@carbon-pulse.com