PSA and Renault hits government plans to reverse diesel policy

Article by Andrew Christian, on December 5, 2014

A plan by France to get rid of its policies encouraging diesel cars has met criticisms from the country’s own carmakers -- PSA/Peugeot-Citroen and Renault. French Prime Minister Manuel Valls has announced that the government will get rid of policies that have "favored the diesel engine" and will raise excise tax on diesel fuel as well as remove incentives for diesel car purchases.

PSA remarked that a change in the policy will hurt its competitiveness as it has been considered a leader in diesel technology. A spokeswoman for PSA told Automotive News Europe that diesel is a key technology to cut greenhouse gas and to fight against climate change.

She noted that the increase in excise tax on diesel will place France at a disadvantage compared with Germany. For decades, France has encouraged consumers to select diesel cars by imposing lower fuel and purchase taxes.

But that policy is bound to be changed soon, no thanks to green campaigners who claim that diesel emissions damage air quality in busy cities and cause health issues. Both PSA and Renault remarked that any tax hike on diesel fuel will not improve air quality.

A spokesman for Renault remarked that the tax does not “differentiate between modern and older diesel engines, and thus has no real environmental impact.”

The carmaker has noted that said planned fuel tax hikes will raise the price of diesel by 4 cents, and by 2 cents for gasoline. It is estimated that around 80 percent of motorists in France use diesel-powered cars.

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