France Hikes Taxes On Diesel Fuel, Auto Makers Protest

Derek Kreindler
by Derek Kreindler
france hikes taxes on diesel fuel auto makers protest

The French government is planning on raising taxes on diesel fuel, branding it a “health issue”, much to the chagrin of consumers and the country’s auto industry.

France’s environment minister, Delphine Bartho, told French radio ( via Bloomberg) that a study by the WHO showed that diesel fumes presented a significant health hazard, and the French government would move to raise taxes on the fuel to help soften demand.

“It’s inescapable,” Batho told RMC radio today when asked whether lower taxes paid on diesel compared with gasoline should be eliminated. “I am favorable. It’s a public health issue.”

Currently, diesel is about 20 cents cheaper per liter than gasoline, but France’s new tax regimen would bring diesel costs in line with gasoline. Originally, diesel was taxed at a favorable rate due to its use in farm equipment and heavy-duty vehicles, but the lower cost led to a massive shift towards diesel powered passenger cars. 73 percent of cars sold in France last year came with a diesel engine, compared to 55 percent on average in Western Europe.

Renault and PSA have been less than enthused with the new tax hikes. PSA is one of the world’s largest producers of diesel engines, and had criticized the studies cited by the French government, with PSA’s Director of R&D, William Faury, stating that they ignored modern particulate-filter diesel engines in favor of old-style engines.

The problem is not the diesel engines on sale now, but the pre-filter era diesels. Current Euro 5 standards for diesel engines are exceedingly tough, and PSA already has diesel powered models capable of emitting a Prius-like 100 grams of CO2 per km. PSA’s aggregate CO2 emissions level for its fleet of cars is already the lowest in Europe, at 122.5 grams per kilometer, just ahead of Toyota. And thanks to the upcoming Euro 6 emissions standards, that number should fall, as diesel NOx emissions are required to be aligned with those of gasoline engines.

While the government may be genuinely concerned about the health of its citizens, it’s hard not to see this as another cynical political calculation, similar to the now shelved plans for extremely high tax rates on France’s top earners. A hallmark of ineffective government is the use of dramatic, headline grabbing solutions, which are little more than PR stunts and rarely mistaken for solid governance. Despite the posturing of France’s current administration. A La Tribune columnist noted that the Environment minister herself admitted that diesel engines from a decade prior are the real problem, since they can emit as much as 30 times more pollution than the current crop of diesels.

To add to the matter, both PSA and Renault are in a precarious position. TTAC readers will know that the French government has been marshaled to help provide de facto bailouts to PSA and quell the ongoing labor disputes between the French auto makers and the myriad of unions entrenched in their factories. With Europe’s new car market already hanging by a thread, the diesel tax comes at a particularly bad time for France’s domestic auto industry.

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  • Rpn453 Rpn453 on Mar 02, 2013

    "The problem is not the diesel engines on sale now, but the pre-filter era diesels. Current Euro 5 standards for diesel engines are exceedingly tough, and PSA already has diesel powered models capable of emitting a Prius-like 100 grams of CO2 per km. PSA’s aggregate CO2 emissions level for its fleet of cars is already the lowest in Europe . . ." CO2 emissions are irrelevant. What is the difference in particulate emissions?

    • Big Al from Oz Big Al from Oz on Mar 02, 2013

      @rpn453 The link below is a working document by our government (Finance Dept) on the implementation of Euro V & VI, it's could be deemed boring. But you seem to be correct in assuming the problem is caused by older diesels, we have the same problem. But what I found amazing is that it appears this is a money grab by Hollande. In Sydney only 12% of particulates can be attributed to human activity, the rest comes from nature. It might be worth finding out what the "natural" particulate count is for Paris. But it did state that ultra fine particulates are higher near heavily trafficated roads, it didn't give an indication of the increase. Also the acceptable/mandated particulate count for Euro V & VI (extremely low) is the same. The biggest change is in NOx. Also, I find it amazing that the US is paying alot for their Add Blu systems. Our finance department figured to move from Euro IV to Euro V would add an additional $630.00 per vehicle and to move from Euro V to Euro VI will add another $87.00 (that's AUD) http://ris.finance.gov.au/files/2011/07/02-RIS-Euro-5-6.pdf

  • Big Al from Oz Big Al from Oz on Mar 02, 2013

    @rpn453 This got me thinking, I do realise diesels emit particulates. In Melbourne the particulate count is higher than Sydney due to human activity. Now Melbourne has significantly less rainfall than Sydney. How many particulates are "natural dust" and are lifted by traffic? A similar senario for Paris, except Paris is very developed with little open space (greenery) compared to an Australian city for the particulates to leech back into the ground. More traffic equals more particulates even if they didn't originate from a vehicle.

  • Kcflyer The solution is harsh punishment, long prison terms, for car thieves. I suggest two weeks for first offense (unless they run from the cops or commit other offenses. Second offense, thirty years hard labor. That should do it.
  • Oberkanone Installing immobilizer is the answer. It's not hard. It's not expensive.
  • MrIcky Out of the possible Jeep recalls to bring up on this site, I'm surprised it's this one and not round 2 of the clutch recall.
  • Dukeisduke I saw a well-preserved Mark VII LSC on the road not too long ago, and I had to do a double-take. They still have a presence. Back when these were new, a cousin of mine owned an LSC with the BMW turbo diesel.
  • Dukeisduke I imagine that stud was added during the design process for something, and someone further along the process forgot to delete it after it became unnecessary.
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