French Economy Minister Bruno Le Maire has announced the abolition of tax-free diesel fuel for farmers and public works companies. This measure is designed to encourage green taxation. However, it will not apply to road hauliers in order to maintain their competitiveness.
Gradual abolition of tax exemptions for off-road diesel fuel: farmers and construction companies affected in France
“We’ll be doing away with the tax niche on non-road diesel (GNR) quite simply to switch our tax system from a brown tax system – it’s a tax system that encourages the consumption of fossil fuels, so it’s bad for the climate – to a tax system that values green investments,” declared Mr. Le Maire on Franceinfo.
This measure will concern farmers and construction companies, with whom discussions are underway to “find an agreement”, he continued, specifying that there would be “compensation to accompany the transformation”. “We mustn’t be brutal,” added the Minister.
According to the Ministry of the Economy, the end of tax exemption for GNR will be phased in from 2024 to 2030.
The president of the FNSEA, the leading farmers’ union, will be at Bercy next week, added the same source. The FNSEA is open to a gradual transition from RNG to alternatives, with support to facilitate the process.
Its chairman Arnaud Rousseau said again on RMC on Thursday that there was “no question of it being abruptly withdrawn”. “Asking for an effort, a mutation from brown to green, to use the expression of the Minister of the Economy, requires solutions. Today, there aren’t many solutions. For us, it’s a question of competitiveness”, he said.
On the other hand, road hauliers will “not be affected” by the gradual end of diesel tax exemption, in order to “preserve (their) competitiveness”, stressed Mr. Le Maire.
Diesel fuel taxation: Road hauliers hail preservation of their competitiveness in France
The Minister pointed out that, for this profession, France applied a higher diesel tax than other European countries.
“The level of taxation on diesel is 3.8 centimes for farmers, 18 centimes for public works, so it’s much lower than the average for European countries and France”, he detailed.
“But it’s 45 centimes for road hauliers, which is higher than what’s charged in Spain, higher than what’s charged in Italy.”
Union TLF said hauliers were eagerly awaiting this decision.
“We are already among the most heavily taxed countries in Europe! We need to preserve our competitiveness, because we’re a strategic sector for the country,” said Olivier Poncelet, General Delegate.
Why does it matter?
The gradual abolition of tax exemption on GNR for farmers and public works companies in France has major implications.
This measure is designed to encourage the transition to greener sources by eliminating the advantages granted to fossil fuels. The decision not to apply this measure to road hauliers is designed to maintain their competitiveness.
This reflects France’s commitment to reducing its carbon footprint and switching to cleaner fuels.
