French legislators in 2018 excluded palm oil from biofuel inputs eligible for tax breaks, which threw a spanner in the financial works for a Total refinery under construction slated to use considerable amounts of imported palm oil as feedstock.
Environmentalists say palm oil drives deforestation, with vast areas of Southeast Asian rainforest having been logged or set ablaze in recent decades to make way for plantations.
In additional to releasing vast amounts of greenhouse gas carbon dioxide, this has threatened the habitat of orangutans and other endangered species.
Total attacked the legal change as violating the principle of equal treatment by singling out palm oil.
However the constitutional court rejected that argument, saying French "legislators, knowing about the global palm oil farming conditions, used objective and rational criteria" towards achieving the goal of reducing emission of greenhouse gases.
Taxes and tax breaks are important in the relative profitability and cost to consumers of biofuels compared to fossil fuels.
When launching the La Mede biorefinery earlier this year Total pledged it would process no more than 300,000 tonnes of palm oil per year -- less than half of the total volume of raw materials needed and that would be certified as being sustainable according to EU standards.
It said the certification ensured there had been no deforestation to produce the oil and would result in at least a 50 percent reduction in carbon emissions compared to fossil fuels.
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