Christiane Melgrani, a 59-year-old woman of Corsican origin, is accused of being one of the "principal organisers" of the highly profitable scam.
She gave up teaching to open a piano-bar near Marseille's Old Port, later working for a building company, while allegedly using her Corsican connections to build a life in organised crime.
She has already been convicted on several occasions for drug dealing and fraud.
Another of the accused, Gérard Chettier, 48, has confessed to playing the role of "trader", while Grégory Zaoui, who was sentenced in an earlier trial relating to the Paris end of the swindle, is said to have been one of its inventors and to have trained Melgrani in operating it.
A warrant is out for Zaoui's arrest.
Also in the dock was Melgrani's partner, Angelina Porcaro, a restaurant owner originally from the Italian city of Naples, who is believed to have recruited individuals to help launder the funds using her connections with the Neapolitan Camorra.
Other defendants include Marseille gangster Jean-René Benedetti, an accountant, and alleged front men and women, including a sculptor, an estate agent and unemployed people.
Billions lost to EU
The fraud, which is seen as a speciality of Franco-Israeli criminals, involved buying carbon credits abroad and selling them in France with VAT added, while omitting to pay the VAT to the French taxman.
It is believed to have cost the European Union as a whole five to six billion euros, 1.6 billion in France with the Marseille operators pocketing an estimated 385 million euros.
Those proceeds not invested into buying more credits, were laundered via a network of companies or used to buy property or luxury goods.
The scam led the French government to scrap VAT on carbon credits, a measure introduced as part of efforts to reduce global warming, in June 2009.
The trial is expected to last eight weeks.