France: National Assembly rejects additional taxes on tropical oils

Posted on: June 23, 2016

A majority of the Deputies in the French National Assembly (NA) adopted a new text version of article 27A of the 'Projet de loi pour la reconquête de la biodiversité' 22 June 2016. This text amendment (no. 457) was proposed at a late stage by the government. In this new text no reference is made to palm oil or other tropical oils being singled out and subjected to an additional tax.

Both the Minister of State for Biodiversity Barbara Pompili and the NA’s commission for sustainable development reporter Genevieve Gaillard showed willingness to take into account the report on the logic and justification of existing food taxes presented yesterday morning by NA representatives Razzy Hammadi and Véronique Louwagie. One of the main conclusions of this report is that the actual system of specific French food taxing is incoherent, complex and disruptive, and that it would make more sense to abolish these taxes than to yet again come up with a new tax.

Furthermore, Pompili agreed with the argument put forward by some representatives on the text of article 27A being juridically weak and therefore easily challengeable, since a) one specific product - palm oil - is singled out in what could be considered a discriminatory way, and b) no criteria for sustainable production are given which would allow producers to apply for an exemption of the tax.

The newly adopted text version of article 27A stipulates:

'In order to contribute to the preservation and the reconquering of biodiversity and to preserve its role in climate change, the State will, within six months following the promulgation of this law, present a proposal for the fiscal treatment of vegetable oils which are, either in their actual state or incorporated in all kind of products, destined for food purposes. This fiscal treatment shall on the one hand be simplified, harmonised and non discriminatory, and on the other hand favorise oils which have been produced in a sustainable way, whereby the certification of sustainability will be based on objective criteria'.

For the original text of the amendment no. 457 in French, click here.

The French Senate is expected to enter its third and last reading on this subject in the coming weeks.