The French Government stops the Eco-Tax for the trucks until next summer in view of the regional protests

The French Government delays once more the entry into force of the eco-tax which was originally scheduled for last July. It had to be put into effect in January 2014 after repeated postponements for not guaranteeing the correct operation of the system.
A few days ago we read in Le Monde that the new date will possibly be July 1, 2014, waiting for an agreement with the different groups and possibly after the elections.

Given the complexity of the issue, we want to analyze first what is the eco-tax and the origin of the problem.

The eco-tax and its aims
According to the researcher Mohcine Bakhat of Economics for Energy, in its article The Difficulties in the Implementation of the Eco-tax in France, the first time we heard about this tax for the heavy vehicles in France was in 2006. It was a proposal of the then Minister of the Interior and Territorial Planning, Nicolas Sarkozy. The tax was for heavy vehicles of 3.5 tons or more, both domestic and foreign which were to drive through the free French road network. Its aim was to encourage carriers to use shorter or less polluting routes to finance infrastructures so as rail and river transport.
This fee would be passed on to shippers and not to carriers, taking into account the types of vehicles and the particularities of each region. In fact, from the beginning, some reductions were announced for vehicles operating in peripheral areas like Brittany.

How does the eco-tax collection work?
It is estimated that when becoming effective, the eco-tax will affect 800.000 trucks, 200.000 of them being foreigners. For the payment of this tax, the trucks must wear a satellite tracking system that allows the automatic debiting when the vehicle passes the checkpoints deployed by the road network.

The conflict in Brittany
The French Prime Minister, the socialist Jean Marc Ayrault, announced the suspension (not deletion) of the eco-tax “to continue discussing” after meeting with Breton authorities following the violent demonstrations occurred in recent weeks against the project.
The main argument of the detractors is that Brittany is one of the most remote areas of Europe and, in spite of this, one of the most exposed to the tax because they have few toll highways (exempt from the eco-tax), resulting in longer journeys and therefore, with a higher transport cost. Another problem raised by this tax is that the Breton economy is essentially based on the food industry, a sector in crisis and much subject to goods transport.
The French government had already lowered the tax for Britons to 6,5 cents/km, instead of the 13 cents/km to be paid on average in the rest of the country (with one exception in the south of France) but still have presented a strong opposition to the project which has resulted in the suspension of its application.

For a closer reality, we talked to Louis Guarino, a journalist for l’Officiel  des Transporteurs , the newspaper of reference of the transport and logistics sector in France. According to Guarino, it will not be possible to apply this tax next summer:  “There are other regions that have joined the protest in Brittany. The industry is facing these days a revolution and not just carriers are determined to prevent the eco-tax but also other sectors that are affected such as food industry and people against the economic policy that is carrying out the government”.
When we asked Guarino the reason for its blunt rejection, he says the new norm in itself is not as objectionable as it is intended to encourage the development of a cleaner transport and the investment in new infrastructures. The problem comes when you add this tax to other ones on “a difficult economic context in which the French government has imposed an austerity plan”.

The only certainty so far is that the eco-tax will not be implemented as planned in January and that the solution to remove the project is not so simple because the government has acquired a number of contractual obligations with the Ecomouv consortium, responsible for the construction and installation of gates and control terminals. “Investments for 610 million euros have been carried out and should this new tax be deleted, the state would be obliged to pay this amount”, says Louis Guarino.