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France says to diesel fuel users: "no more"

Erik Bjornstad : Feb 12 2015

Diesel Fuel Policy

It seems like Europe has always done things a little bit differently than over here in the United States. But this news takes that to a whole new level. On December 1^st, the French Prime Minister Manuel Valls announced the intention to eliminate diesel-powered passenger cars from French roads.

You heard that right. Get rid of all diesel cars in France.

That proposed feat is as big as it sounds. Unlike the U.S., the vast majority of cars in France are actually diesel-powered. In the U.S., diesel cars are but a 3% sliver of the car market. In France, they are 80%.

The French proposal applies to diesel cars, not trucks. So the ubiquitous diesel big-rig is safe for now. But still, this is huge news. Shocking, really.

Prime Minister Vallis went on to say in his statement that France has always favored the diesel engine, and that was a mistake that they needed to "remedy and progressively undo".

This doesn’t seem to make sense, at first blush. Diesel engines are more efficient as gas-powered engines and get much better gas mileage. That should be what you want people to use.

But this announcement is only part of a broader environmental effort in France that is sure to lead to other, similarly momentous policy implementations. They’re already planning to launch a pollution rating system for cars. The worst (dirtiest) cars will actually be banned from cities and urban centers.

How to get 80% of the car market in France off the road? Use tax credits.

France has traditionally subsidized diesel fuel to make it cheaper than gasoline. So of course someone is going to buy a diesel vehicle – it’s cheaper to fuel, unlike in the United States. France did this because they wanted to emphasize the fuel efficiency of diesels over gasoline. But the mood is shifting away from emphasizing this to looking at diesel particulate emissions that are deemed to be a lot worse than gasoline engines. As a nation, France’s attention is shifting away from the amount of oil they use to the quality of the air around them. Couple this with the fact that gasoline engines have made great efficiency strides recently and we arrive at the decision today.

France intends to influence consumer behavior in the desired direction (away from diesel) by raising the tax on diesel by two cents per gallon (or is it litre?). They predict this will both cause consumers to move away from purchasing diesel and also raise $1 billion or more in extra tax revenue. Governments can always use more money to play with.

Additionally, they’re taking a page out of our playbook by offering huge tax incentives to French consumers who trade in their diesel cars for electric cars. How huge? Over $13,000 in many cases.