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France

Government scraps plans for carbon tax

Photo: Reuters

France is to abandon a plan to tax carbon fuels in favour of Europe-wide measures that will not harm French businesses' competitiveness, Prime Minister François Fillon told MPs on Tuesday. The decision to scrap the much debated tax comes as President Nicolas Sarkozy's UMP party attempts to win back support in response to its resounding defeat in regional elections on Sunday.

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Any attempt to tax carbon emissions would have to be introduced at a European level in order "not to harm the competitiveness of French companies", François Fillon was quoted as saying by several UMP members who attended a meeting with him on Tuesday.

Despite the President's enthusiasm for it, the proposed carbon fuel tax was unpopular with Sarkozy's own right-wing majority, which saw it as an additional burden on the French tax-payer.

Opinion polls last year showed that around two-thirds of voters opposed the scheme, while the Consitutional Court ruled it illegal, estimating that 93 per cent of industrial emissions, outside fuel use, would be exempt from the tax.

Implementing the planned tax would have been "very complicated", UMP Secretary-General Xavier Bertrand said on Tuesday, adding that he would prefer to see a European Union-led strategy.

The carbon fuel tax, announced by Sarkozy in September, was due to come into effect this year. Based on the Swedish model, it would have made consumption of carbon-heavy fuels such as oil, gas and coal more expensive in a bid to stimulate the use of less polluting energies.

The government had promised to use the revenues generated by the new tax to issue "green cheques" that would reduce the cost to consumers.

France has a target of 75 per cent reduction of CO2 emissions by 2050.

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