Last two decades have witnessed an increase in the sales of SUVs at the expense of other type of cars. Riding along, there is a steep increase in greenhouse gas (GHG) emissions as at the exhaust pipe we find the second-largest source of CO2 emissions, right after the airline industry. Carbon taxes, under French law, are not something new. The French government hit the headlines with the announcement of a great change in its fiscal policy by the end of last year. On one hand, it amended its tax policy by raising or lowering the CO2 emission ceiling and by triggering brand new thresholds within something that came to be known as ‘Ecotax.’ One the other hand, it created a new plan to tax heavier cars.

Malus CO2 or the Ecotax

The Ecotax is an ecological malus enshrined in the French tax code, which is in force since 2008. It applies to private cars, which are new or for the first time registered in France from 2008 onwards. It is due at the same time of the purchase of the car with the registration documents. The Ecotax trigger threshold has been lowered to 133 g CO2/km (138 g in 2020) and fines start at 50 euros. The government also amended the ceiling threshold, which amounts to 30,000 euros (20,000 in 2020) for the most polluting cars. For instance, if you want to buy in 2021 a well-known French SUV car brand which releases 124 g of CO2 it will be exempted from the French Ecotax. Conversely, if you want to buy one of the best-selling German brand SUV releasing 185 gr of CO2 you will have to pay 7,462 euros.

Additional tax by weight – coming into force in 2022

Along with the taxation based on CO2 release emissions, the car weight tax is an additional imposition to the Ecotax. The idea to tax by weight came after a proposal by the Citizens’ Climate Convention and WWF France and aims at deterring car shoppers from purchasing the heaviest and dirtiest vehicles, but also to foster the car industry to reduce its emissions and take the entire ecological footprint into account. Looking at last year’s figures, sells of SUVs represented 38 % of the French car market and, currently, SUV is automakers’ most profitable model.

It was originally suggested a tax for any weight over a threshold of 1,400 kg. However, the government has set up the threshold at 1,800 kg to be applied to new cars and second-hand cars registered in France for the first time in 2022.  Electric cars, hybrid cars, seven-seater family cars (under certain conditions) are exempted from the taxation. In practice the penalty amounts to 10 euros for every additional kilogram over 1,800. The cumulation of the Ecotax and its additional tax on weight cannot exceed the threshold of 30,000 euros in 2021.

Since the largest SUVs account for 2% of the French market – where the average car weight is around 1,200 kg – German models would be the most impacted; almost all French-made cars will be spared.

Government purchase schemes

The Government is still granting 1,000 euros for anyone willing to buy a second-hand electric car in France.

France – not a bad student in the class …

According to the European Automobile Manufacturer’s association, France is the nation which has the costliest taxes on polluting vehicles in Europe. Hard to say if this new tax will have an effect in France as the proportion of heavy vehicles dealing with the tax is rather small compared to other lighter SUVs on the market. Nevertheless, it is still a path towards fairer taxation and an example worth spreading all over Europe.