France Plans Carbon Tax, Atomic Cap in $27 Billion Energy Shift

France will introduce a carbon levy and a law to cap nuclear-power capacity next year under plans to boost renewable generation that will cost about 20 billion euros ($27 billion) a year, according to President Francois Hollande.

“Everything will be done to lower production costs” for wind and solar, Hollande told an environment conference. Tenders for marine-energy projects will start in coming weeks, he said.

Hollande, who vowed during his election campaign to reduce reliance on nuclear to half of total output by about 2025 while also keeping down consumers’ bills, hasn’t yet said how he will reconcile those aims. The country gets about three-quarters of the power it produces from nuclear, more than any other nation.

The shift will be funded with a levy on “energy products” applied progressively based on their carbon emissions, Hollande told the conference in Paris, without specifying the details. The president said that Europe should also impose a carbon tax.

Finance Minister Pierre Moscovici said last month that he understands some people are “fed up” with taxes and promised the government is shifting to spending cuts in its 2014 budget. Full details of the budget plans will be published Sept. 25.

While seeking to curb energy bills and taxes on consumers, the administration has two Green party ministers and needs its help to get laws comfortably through parliament. Hollande sought to lure voters concerned about the environment to the Socialists during his election with his pledge to curb atomic generation.

Transfer Power

“Without closing more reactors, we don’t see how the proportion of nuclear will be carried out,” Reseau Sortir du Nucleaire, an anti-atomic power group, said in a statement.

Hollande didn’t say whether more nuclear plants will close, beyond the planned shuttering of Fessenheim in eastern France, and also failed to address Greens’ calls to raise diesel tax in line with gasoline on grounds that it’s more harmful to health.

The proposed law will allow the government, along with operator Electricite de France SA and the safety regulator, to decide how long nuclear plants should run, Hollande said.

France will also seek to cut energy use in half by 2050 and fossil fuel use 30 percent by 2030, he said. It will implement incentives to spur energy-saving measures in homes and use of electric cars by adding recharging stations. Improved efficiency will pay for changes to the energy mix from 2030, Hollande said.

The new law will also define how renewables are financed.

The above-market guaranteed prices currently paid to green energy producers “can lead to a waste of public funds, profit-taking and speculative behavior,” he said. “I want renewable energy support methods to be revised so that every euro paid by consumers is the most efficient possible and will favor the creation of national industrial champions.”

The expected 20 billion-euro annual cost of the proposals includes energy, construction and transportation, Hollande said.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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