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France Weighs Gas Guzzler Penalties to Help Fund Climate Bill

France Weighs Gas Guzzler Penalties to Help Fund Climate Bill
France's President Emmanuel Macron arrives for a EU Summit, at the EU headquarters in Brussels, Belgium, 23 March 2023. The two-day summit of the 27 European Union leaders in Brussels aims to build on previous European Council meetings where EU leaders will discuss the latest developments including continued EU support for Ukraine, the economy, energy, and migration. (Photo: EPA-EFE / John Thys / Pool)

France could raise penalties on the most polluting vehicles to help finance a green industry bill that is designed to respond to subsidies in the US Inflation Reduction Act. 

The increase in levies is among possibilities proposed by groups of lawmakers and business leaders to ensure the bill — which the government wants to include tax credits and grants for industry — has a net zero cost for public finances.

The groups also proposed reviewing rates on France’s tax on domestic energy consumption, making changes to research credits, and raising taxation of company-owned vehicles.

The ideas will be opened to a public comment period in the coming weeks and the government aims to present the bill to parliament by summer.

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In January, French Finance Minister Bruno Le Maire asked lawmakers, public officials and business groups to make the proposals as European governments rush to stop businesses from being lured across the Atlantic by billions of dollars of subsidies.

But the country’s room to maneuver is limited by President Emmanuel Macron’s pledge to contain public debt while not raising taxes.

As part of the bill, the working groups backed grants or tax credits for industrial companies that committed to a carbon reduction plan and for producers of key technologies like batteries and solar panels.

Other elements of the bill could aim to speed up regulatory decisions for new industrial sites, direct savings to green investments and improve training for jobs in industry.

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