Fired up after hosting last year's Cop21 climate conference, President François Hollande announced in April that a floor price for each tonne of carbon in electricity production would be introduced, meaning that an additional tax would be slapped on electricity produced by power stations fired by fossil fuels - coal, gas or oil.
Environment Minister Ségolène Royal later said that the measure would only apply to coal-fired power stations, which are the heaviest polluters.
France only has four such power stations, two operated by national power company EDF, two by Germany's Uniper.
But the plan led to protests in the towns that would have been affected.
They were organised by the CGT trade union, which claims the tax would mean the plants would close within two years, leading to the loss of 5,000 jobs within two years.
In a parliamentary debate on Thursday night the government withdrew the amendment that would have put the tax into effect, because of the "considerable feeling" it had aroused, as Budget Minister Christian Eckert put it.
But the measure will be introduced at a later date, Eckert said, and on Friday the environment ministry said it would be done at a European level.
The CGT pledged to remain "vigilant".
EDF on Friday announced that it would spread out the temporary closure of five nuclear reactors until mid-January.
The closures were ordered by the nuclear safety watchdog for checks on equipment that have a high carbon content.
Diesel tax break extended to petrol
The French parliament also voted on Thursday night to extend tax breaks for companies using diesel-fuelled vehicles to petrol.
By 2012 companies will be able to claim an 80-percent reduction on VAT on petrol, although the exemption will start next year at 10 percent.
The tax concession meant that nearly all vehicles used by businesses are currently high-polluting diesel.
Half of all sales of new vehicles in France are to companies.
The Cop22 conference takes place in Marrakesh on 7-18 November.
For our coverage of the Cop21 cliate change conference click here