France’s plans to impose an additional tax on palm oil used in food from 2017 moved a step closer as the National Assembly approved the levy, which has been vehemently opposed by top producers Indonesia and Malaysia.
However, the extra tax aimed at encouraging the sector to reduce the environmental damage palm oil plantations can cause, has been sharply reduced from an initial proposal in January and now excludes oils produced in a sustainable way.
Lawmakers also agreed today to introduce the new tax gradually to soften its impact. The tax would now start at 30 euros ($34) in 2017 and rise by 20 euros per year to 90 euros in 2020, rather than start at a flat rate of 90 euros.
The new levy, which would add to an existing tax of 104 euros per tonne, would be well below the upper house’s original proposal that started at 300 euros.
The French government backs the tax, originally proposed by a senator, since it has been reduced and excludes oils that were produced in a sustainable way.
The levy, part of a wider biodiversity bill expected to be adopted on Friday, still needs to be reviewed in the upper house, likely in May or June.
Previous French attempts to impose a special tax on palm oil have failed, mainly due to strong lobbying from producers.
Past proposals were dubbed the “Nutella tax” by the French media because the popular chocolate-hazelnut paste contains about 20 percent palm oil.
However, since 2013, Nutella sold in France has been made only with palm oil from sustainable supplies, the maker, privately owned Ferrero, says.
Several French supermarkets have committed to ban the use of palm oil in their own-brand products by the end of the decade, partly due to public concerns that high levels of saturated fat may be harmful to human health.