French carbon tax set at 17 euros per tonne of CO2

PARIS, Sept 10 (Reuters) - French President Nicolas Sarkozy has set a new environmental levy at an initial 17 euros ($24.8) per tonne of carbon dioxide emitted, due to rise progressively over time, the newspaper Le Monde reported on Thursday.

Sarkozy is due to make details of the new tax public in a speech scheduled to start at 1030 GMT.

The plan for a carbon tax has caused a political furore in France, with disagreements within the ruling party on how exactly it would work and objections from opposition critics who say it will hurt the poor at a time of economic hardship.

According to Le Monde, which said it had obtained a copy of Sarkozy's speech, the new levy is not supposed to hurt households because the planned rise in the price of fossil fuels will be offset by tax breaks or "green cheques" for the poor.

The government had previously said the carbon tax was not designed to fill state coffers at a time when the budget deficit is ballooning, but rather to incite consumers to cut down on their energy consumption.

Prime Minister Francois Fillon had previously said the starting level of the tax would be 14 euros per tonne of CO2, only for Sarkozy to contradict him and say he had not yet decided. Thursday's speech is intended to quell infighting within the ruling UMP party on the details of the plan. (Reporting by Estelle Shirbon; Editing by Jon Boyle)