France to adopt carbon pricing

19 May 2016

France is taking bold steps towards carbon pricing. The Ex'tax Project fully supports France taking a leadership role in measures to solve the climate crisis. 

From: The Guardian

France will set a carbon price floor of about €30 ($33.95) a tonne in its 2017 finance bill as the government seeks to kickstart broader European action to cut emissions and drive forward last year's landmark international climate accord.

From: Carbon Pulse

France will set a domestic carbon price floor for power generators from next year, the country’s environment ministry said Tuesday. The ministry confirmed an earlier announcment by French President Francois Hollande, who also said the country would seek to close some of its nuclear reactors from 2018 and would make a formal proposal to introduce a price collar on EU Allowances in Europe’s carbon market.

France’s domestic price floor would drive its utilities to switch from burning coal to cleaner gas and avoid 12 million tonnes of CO2 a year, almost half the country’s power-related emissions, the ministry said, adding that details on how the price floor will work are to be proposed in the autumn.

France’s domestic carbon price floor would follow that of the UK, which since 2013 has taxed thermal utilities for their emissions on top of their obligations under the EU ETS. France’s floor price is unlikely to have nearly as big an impact on the market as the UK’s because French utilities emit far less CO2, with around 90% of the country’s electricity generated from nuclear or renewables. The UK’s power sector emissions were around 160 million tonnes in 2012 but had fallen 37% to 101.5 million  tonnes by 2015.

France also pledged to double the number of wind farms, triple the amount of electricity it sources from solar, and increase the amount of heat produced from renewables by 50% – all as part of its goal to reduce the share of nuclear in its energy mix to 50% by 2025 from 75% currently. Hollande added that to help fund this initiative, the country would become the first to issue green bonds.

The country’s so-called ‘Green Transition’ programme, which also includes a domestic carbon tax for non-ETS sectors that will rise from €56/tonne in 2020 to €100/tonne in 2030, was passed into law last summer.