French Tax to Fund Renewable Energy Shift

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -The French government has announced plans to introduce a tax on all fossil fuels as well as a levy on nuclear power in order to fund the country's transition to renewable energy.

The moves were revealed by Prime Minister Jean-Marc Ayrault at a national environmental conference, which marked the end of a 12-month public debate over France's future energy plans. The proposed carbon tax, which will be introduced next year, will be levied on the consumption of all fossil-fuels, ranging from coal and gas to petrol, oil, diesel and heavy fuel. The level will be decided according to the amount of emissions each emits.

The so-called 'climate energy contribution' will have no impact next year, but will raise an estimated €2.5 billion ($3.4 billion) in 2015 and €4 billion ($5.4 billion) in 2016. At the moment, Ayrault explained that the government currently spends €4 billion each year to fund renewable energy developments and another €1 billion ($1.3 billion) on energy efficiency programmes.

In addition, the nuclear sector, which is controlled by energy giant Electricite de France S.A. (EPA:EDF) (EDF) (Paris, France), will have to contribute to the transition to renewables. EDF owns and operates all 58 nuclear reactors in the country, which provide around 75% of France's electricity.

"All change is expensive in the short term even if it's beneficial in the long term," Ayraut told the conference. "Fossil and nuclear energy will thus be mobilised to allow us to meet our energy transition objectives. Our nuclear fleet will be asked to contribute. During all of the remaining life-span of our [nuclear] plants, and always guaranteeing maximum safety, our nuclear parks will be obliged to contribute without endangering [electricity] supply."

France's President, Francois Hollande, who was elected last year promised to close the country's oldest nuclear power plant, Fessenheim by 2016, in addition to reducing the country's reliance on nuclear power to 50% by shutting 24 plants over the next 13 years. For additional information, see July 24, 2013, article - France to Shut Oldest Nuclear Plant.

Details of France's new energy bill is expected in the coming weeks and President Hollande has said that the energy transition will cost an estimated €20 billion ($27 billion) a year.

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