France Hikes CO2 Taxes for 2013

PARIS – France plans to raise its registration fees next year for cars that are gas hogs, in an effort to encourage sales of more fuel-efficient vehicles and keep the national budget under control.

But a “gas hog” in France can emit as little as 136 g/km of carbon-dioxide, the equivalent of 46 mpg (5.1 L/100 km) for a diesel powertrain or 41 mpg (5.7 L/100 km) for a gasoline engine.

The new “malus” fees start at €100 ($130) on those cars emitting 136-140 g/km CO2 and increase up to €6,000 ($7,800) for cars at 200 g/km or more, the equivalent of 31 mpg (7.6 L/100 km) with a diesel. Until the end of December, fees start at 141 g/km.

Money collected will fund bonuses of up to €7,000 ($9,100) for people who by electric cars and €2,000 ($2,600) for buyers of hybrids, as well as smaller sums to buyers of efficient internal-combustion-engine vehicles emitting less than 105g/km. That equates to 60 mpg (3.9 L/100 km) for a diesel and 53 mpg (4.4 L/100 km) for gasoline engines.

The new fees will affect the vast majority of cars sold in France and surely will dampen sales of gasoline engines. The Automobile Club of France, for example, notes a Dacia Duster cross/utility vehicle with a 1.6L gasoline engine will draw a malus fee of €2,600 ($3,400), raising its purchase price 19%.

Automobile Club President Didier Bollecker says the government action “is primarily motivated by a concern to preserve the precarious balance of the bonus/malus budget, which for the first time in 2012 has a surplus after four years of uninterrupted deficit.”

French legislators voted once to keep fees for cars up to 155 g/km CO2 at their current level, but they decided to go along with the government’s plan after pressure from Economic Minister Pierre Moscovici.

The entire tax law for 2013 isn’t yet official, but the malus fees are likely to stay.