France Plans New Incentives To Phase Out Polluting Vehicles

The French government is planning a series of new incentives and taxes to phase out polluting vehicles and to boost energy-saving insulation in houses, the environment minister said. Environment and Energy Minister Nicolas Hulot told French daily Liberation the 2018 government budget presented next week would include a series of measures to limit climate change, reduce pollution and help low-income families.

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Hulot said he would propose that a 500 to 1,000 euro incentive to switch to a less polluting vehicle, so far only available to low-income families, should be available from 2018 to all citizens who own cars with petrol engines registered before 1997 and cars with diesel engines registered before 2001. The sum will not only be for buying new cars but also relatively new second-hand vehicles with low carbon dioxide emissions.Hulot also said that for low-income households the incentive would be doubled to 2,000 euros. He added that for a low-income family buying a small second-hand car, the incentive could add up to more than half of the vehicle's value.

Some three million old cars are eligible for the conversion incentive and the ministry hopes around 100,000 of these will be replaced next year. All car owners who switch to an electric vehicle will receive a 2,500 euro switching incentive on top of a 6,000 euro subsidy if the measure is approved.

Hulot also said he would propose that from 2019 credits for housing insulation should be turned into a premium to be paid immediately after the works are finished, because low-income families do not have the means to finance these works and then wait to receive the tax credits months later.

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The government also plans subsidies of up to 3,000 euros for low-income families who switch from old, polluting diesel fuel heating systems to renewable energy heating systems, such as wood-fired heaters or heat pumps.

Hulot denied that President Emmanuel Macron's plans to reduce red tape in the building industry would lead to lowering insulation requirements for new buildings.

"The president has told me that current environmental requirements will not be affected ... from a social point of view the worst that we could do would be to deliver housing that is not energy efficient," he said.

Hulot also said the government would push France's carbon tax to 44.60 euros per tonne in 2018 from the current 30.50 euros per tonne and would continue to increase it to 100 euros per tonne by 2030 as laid out in the 2015 energy transition law.

Asked about major infrastructure projects such as the Lyon-Turin rail link and the Seine-Nord canal to link Paris to the major harbors of northern Europe, Hulot said "there will be a pause, we will take the time to define priorities".

(Reporting by Geert De Clercq; Editing by Mark Potter)

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