PARIS (Reuters) – France will ask automakers on Monday to fund an expanded trade-in program to free older, polluting cars off the road with incentives for new ones, the French Finance Minister said daily to Le Parisien on Sunday.
FILE PHOTO: Traffic jam is seen as the Seine river banks are closed for traffic in Paris, France, on October 26, 2016. REUTERS / Charles Platiau / file photo
The existing state scrapping premium, which is aimed primarily at old diesel vehicles, is already oversubscribed.
The expansion of the incentive will be partly funded by a tighter tax on pollution-control vehicles adopted on Tuesday, which should raise € 40 million (£ 35.5 million) to a total of € 610 million next year, to contribute to the purchase of more environment finance-friendly cars.
The Minister's agenda is that he will meet with Environment Minister Francois de Rugy and car manufacturers such as Renault and PSA to "discuss measures to accelerate the ecological transition of the vehicle fleet".
"With Francois de Rugy, tomorrow we will ask carmakers to contribute to the conversion premium," Finance Minister Bruno Le Maire told Le Parisien in an interview, adding that the incentive should be more efficient and reach more Frenchmen.
The level of contribution of automakers to the larger system would have to be discussed with them, he said.
The newspaper Les Echos said earlier this week that the French automakers had already discussed between them implementation at the expense of a bonus for retrofitting old vehicles. The exact outlines remained in discussion.
Since the leading German automaker Volkswagen, there has been a worldwide backlash on diesel vehicles.VOWG_p.DE) admitted in 2015 to defraud US emissions tests. The scandal has spurred investment in electric vehicles and incentives for green cars.
German Chancellor Angela Merkel and her coalition partners agreed earlier this month on plans to reduce diesel pollution by asking automakers to provide owners with incentives and hardware repairs.
But the automakers had said the focus should instead be on encouraging car owners to trade their older diesel models for cleaner vehicles – which would lead to a sales boost, albeit at reduced prices.
Volkswagen said Thursday that it will offer trade-in incentives and a bonus for scrapping older diesels in Germany.
Regardless, Le Maire rejected demands to lower taxes on fuel prices, which rose after a sharp rise in crude oil prices at French gas stations, which would contribute to climate change.
France's budget for 2019 includes an increase in diesel taxes of more than 6 cents a liter and that of gasoline by almost 3 cents, an increase the government has been trying to downplay compared to rising oil prices.
Reporting by Sybille de La Hamaide and Julie Carriat; Editing by David Evans