There is no autonomous “carbon tax” in French positive law. Two attempts at a specific tax were struck down by the Constitutional Council, in 2000 and 2009, on the ground that the cumulative scale of exemptions deprived the scheme of any rational link with the climate objective pursued. What remains in French law is a carbon component lodged in the rate schedule of a pre-existing excise, frozen at 44.60 euros per tonne of CO2 since 2018, while the legal centre of gravity has shifted to Union law: the Emissions Trading System (ETS) and, since 1 January 2026, the Carbon Border Adjustment Mechanism (CBAM) in its definitive regime. The mechanism entered into force, without transition. Here are the six points that determine, in practice, the legal exposure of companies subject to carbon pricing.
1. Two constitutional censures shaped the subject
By Decision No 2000-441 DC of 28 December 2000, the Constitutional Council struck down the extension of the general tax on polluting activities to intermediate energy consumption, on the ground that subjecting electricity to it was inappropriate to the nature of French generation sources. The founding censure came nine years later: Decision No 2009-599 DC of 29 December 2009 struck down the carbon contribution created by the finance law for 2010, finding that the accumulation of exemptions (installations under allowances, road, air and sea transport, agriculture) would have left less than half of national emissions actually subject to the tax, hence a clear breach of equality before public charges. The Council never held that a carbon tax would be unconstitutional in principle: it held that a tax displaying a climate purpose and failing that purpose through the scale of its exemptions breaches equality, a lesson that has dictated the whole technique adopted since 2014. An exemption that is too wide kills the tax itself.
2. The 2014 workaround removed the mechanism from the adequacy review
Article 32 of Law No 2013-1278 of 29 December 2013 (finance law for 2014) introduced the carbon component, not as an autonomous tax but as a fraction proportional to CO2 content inserted in the rates of the existing domestic consumption taxes. That article was never referred to the Constitutional Council: the carbon component has therefore never been “validated”, it has simply never been challenged. By lodging the price signal in the schedule of a pre-existing excise rather than in a tax with a declared ecological purpose, the legislature removed it from the adequacy review of 2009-599 DC. Article 64 of Law No 2018-1317 of 28 December 2018 froze rates at their 2018 level, without repealing the objective of 100 euros per tonne in 2030 set by Article L. 222-1 of the Environmental Code: a statutory objective thus coexists, unreconciled, with a rate frozen at 44.60 euros per tonne, nearly six times below the shadow price of carbon the State sets itself for its own investment decisions.
3. The CBAM entered its definitive regime on 1 January 2026
Since that date, the importer of cement, iron and steel, aluminium, fertilisers, electricity or hydrogen must have obtained authorised declarant status, declare the embedded emissions of its goods and surrender certificates. Failures are penalised in line with the ETS excess emissions penalty, raised to three to five times that amount for the unauthorised importer. The 50-tonne de minimis threshold, assessed in cumulative net mass over the calendar year across all CBAM sectors, relieves only from declaratory obligations: it never relieves from the risk of recharacterisation in case of artificial splitting of imports. Splitting the shipment fools no one. The first CBAM declaration is due on 30 September 2027 for 2026 emissions, the sale of certificates opening on 1 February 2027.
4. The CBAM is challenged before the Court of Justice for wrong legal basis
The Republic of Poland brought on 8 August 2023 an action for the complete annulment of Regulation (EU) 2023/956, pending as Case C-512/23, mainly for wrong legal basis: the mechanism would be fiscal in nature, adopted by unanimity under Article 192(2) TFEU, and not environmental policy adopted by qualified majority under Article 192(1). The Union legislature has systematically chosen the second basis for the ETS as for the CBAM, on the ground that neither instrument sets a rate, the price resulting from the market. An annulment, even with deferred effects, would call into question the entire architecture of border adjustment. Everything hangs on that single mechanism. Poland has also brought three other actions against acts of the “Fit for 55” package.
5. The CBAM is also challenged before the WTO Dispute Settlement Body
The Russian Federation submitted on 19 May 2025 a request for consultations with the Union and its Member States concerning the CBAM and free allocation of allowances, under Articles I, II, III, VI, X, XI and XVI of the GATT. The Union blocked a first panel request on 24 July 2026. The CBAM is also the subject of a specific trade concern raised in the Council for Trade in Goods, notably by Russia, China, India, Brazil and Indonesia, gathered in the BASIC group, which invokes the principle of common but differentiated responsibilities from the Kyoto Protocol against the unilateralism of the European scheme. Brussels accepts that reproach without denying it. No WTO decision has yet settled the compatibility of a carbon border adjustment with GATT disciplines: that is the CBAM’s main legal uncertainty, interpretative rather than factual.
6. The Messer France case law sets the test transposable to any national carbon tax
By its Messer France SAS judgment, C-103/17, of 25 July 2018, the Court of Justice held that a national indirect tax on energy may coexist with the harmonised excise only in proportion to the specific purposes it pursues: an object other than purely budgetary and a direct link between the use of revenue and the object of the tax, predetermined allocation being insufficient. On remittal, the Conseil d’État held on 3 December 2018 (No 399115) that only 7.42% of the 2009 CSPE revenue failed that test, opening mass refund litigation closed by its decision of 17 October 2023 (No 475983) on the basis of the four-year limitation period. That specific-purpose test applies to any national contribution with a climate purpose superimposed on the harmonised excise: earmarked tax, sectoral levy, financing of a transition fund. The revenue must be allocated by the text itself, not merely by budgetary practice, to expenditure pursuing the very objective of the tax. Here the tax expenditure serves the same cause as the tax.
Guyader Avocat has published a practical guide on carbon taxation, detailing the interplay between the French excise on energies, the European ETS and the CBAM, and the contractual clauses to secure before the 2027 compliance exercise. Download the guide to anticipate the 2027-2030 deadlines and secure your CBAM declarant status.
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