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24th December 2007

The French Government has announced plans for the introduction of emissions-based 'feebates' to subsidise the purchase of low carbon vehicles while raising the tax on higher emissions cars, whose buyers will pay an extra tax of up to €2,600. 'Greener' choices will earn buyers a discount of up to €1,000.

Autoindustry.co.uk reported earlier in December that Ireland is planning to adopt a new CO2-based car purchase tax as well as a more steeply graduated emissions-based road tax system, while Israel and Finland are also reported by the LowCVP charity to be considering ‘feebate’-type schemes.

The French proposal, to be enacted subject to EU competition regulations, is claimed to be the first in Europe to offer a bonus to greener vehicles on a technology-neutral basis. The French Government hopes it will be introduced in 2008. The French purchase tax is set at €200 for cars emitting between 161g and 165 CO2 g/km; €750 for 166g to 200g; €1,600 for 201g to 250g; and €2,600 for cars emitting over 251g.

The bonus will be €200 for cars emitting between 121g and 130g; €700 for 101g to 120g; and €1,000 for less than 101g. There will be neither tax nor bonus for cars emitting between 131g/km and 160g/km. The French Government also announced that drivers will be able to claim €300 for scrapping cars over 15 years old and replacing them with smaller, lower-emissions vehicles.

According to a report in The Times, a study by the French Automobile Observatory says that the new policy could generate 110,000 new car sales next year. PSA Peugeot Citroen, currently Europe’s producer of the lowest CO2-emitting car fleet, has supported the French Government's move.

(LowCVP newsletter, 21 December)

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