Sarkozy returns to reject carbon tax plans with proposal for new levy on polluting firms.

The French government is planning to revive previously rejected plans for a national carbon tax, according to local media reports.

Le Figaro and Les Échos reported yesterday that the government will introduce a carbon tax from next year on large industrial and energy firms.

Citing unidentified government sources, the papers said that the tax will operate as a simple levy of between 0.08 and 0.12 per cent on the pre-tax revenues of carbon intensive companies, rather than a more complex per-tonne levy on emissions.

Le Figaro said that the exceptional tax will raise around €250m, around a third of the revenue coming from the energy sector.

Government officials later confirmed that a carbon tax is being considered, but declined to provide any details on the plans.

Nicolas Sarkozy’s government initially attempted to introduce a per-tonne carbon tax in 2010, positioning the plan as central to its efforts to cut greenhouse gas emissions and drive investment in clean technology.

But the proposals faced fierce opposition amid fears over the likely impact on competitiveness and energy prices, and the government was forced to water down and then completely ditch the plans.

Ministers are evidently now hoping that, with France under pressure to reduce its budget deficit, a one-off tax on carbon intensive firms could secure wider support.

However, the proposals are likely to face fierce opposition from business groups, which are expected to argue that such a tax will erode the competitiveness of French companies and encourage some carbon intensive businesses to migrate overseas.

By James Murray