French Minister sees carbon tax in 2010 budget

PARIS (Reuters) - France’s proposed carbon tax is expected to be included in the 2010 budget but will probably be set below the 32 euros per metric ton level recommended by a special advisory panel, Budget Minister Eric Woerth said on Tuesday.

The panel, headed by former Socialist Prime Minister Michel Rocard, has recommended billing 32 euros ($46) for every metric ton of carbon dioxide emitted in 2010 and lifting the levy progressively to 100 euros per metric ton by 2030.

That would add between 7 and 8 cents to the cost of a liter of petrol. The tax, heavily criticized by intensive fuel users such as farmers and fishermen, will affect all sectors that are not part of existing emissions trading programs.

There had been some uncertainty over whether the tax would be ready in time for next year’s budget but Woerth confirmed it would be, although probably at a level lower than the recommendation.

“It will be in the 2010 budget because the carbon tax is an intelligent tax,” he told i-tele television.

“Michel Rocard has named a figure, I have indicated that I think this figure of 32 euros per ton of carbon emitted is too high. I think the figure will be lower but it’s up to the president and the prime minister to decide,” he said.

Details of the carbon tax will be established after a debate when parliament resumes, with a host of details still unclear.

As well as the level itself, there is major uncertainty over compensation for poorer households or those who need to drive to work because they live in remote areas.

($1=.6990 Euro)

Writing by James Mackenzie, editing by Mike Peacock