French Government to introduce incentives for new low emission vehicles

18 September 2017

18 September 2017

The French Government is planning a series of new incentives and taxes as it continues its push to phase out polluting vehicles before introducing a ban on petrol and diesel vehicles in 2040.

Environment and Energy minister Nicolas Hulot discussed the plans when speaking to the French daily newspaper Liberation, before the government’s 2018 budget next week. This will include a series of measures to limit climate change, reduce pollution and help low-income families.

The country is planning, along with the UK, to ban the sale of conventional petrol and diesel vehicles by 2040. When the announcement was made in July 2017, Hulot suggested that there would be some form of incentive offered, alongside current promotions that allow low-income families a €1,000 saving on low pollution vehicles, while expanding this current scheme beyond just hybrid and electric cars.

The proposal is for a €500 – €1,000 incentive to switch to a less polluting model, whether it is petrol, diesel, hybrid or electric. The offer will be given to those trading in a petrol vehicle registered before 1997, or a diesel car registered before 2001, with the plan to clear the country’s roads of most of the three million vehicles which fall into these categories.

However, the sum will not only be for those buying new vehicles, but will also be offered against second-hand cars with low CO2 output levels. The current €1,000 incentive for low-income families to switch will also be doubled. Hulot suggested that for a low-income family buying a small second-hand vehicle, they could save up to 50% of the cost.

All car owners that switch to an electric vehicle (EV) will receive a €2,500 switching incentive on top of a €6,000 subsidy under the plans, which are yet to be fully approved.

While this is not being called a scrappage scheme, the incentive deal is likely to remove around 100,000 vehicles from French roads according to the plans. France is aiming to be ′the number one green economy in Europe’ with proposals to push France’s carbon tax to €44.60 per tonne in 2018 from the current €30.50 per tonne, and continue to increase it to €100 per tonne by 2030 as laid out in the country’s 2015 energy transition law. This would also affect vehicle manufacturers such as Renault and PSA, both of which have plants in the country that need to ensure they lower their carbon outputs or risk paying higher prices.

The proposals were first outlined in Hulot’s Climate Plan introduced in July.