Inception date: 04 Dec 2008 | Removal date: 03 Jan 2010
Still in force

Consumption subsidy

As part of the French economic recovery plan in December 2008, France introduced a car scrappage scheme. According to the Ministry of Recovery the scheme intends:
(i) to support the activity of the automobile sector,
(ii) to support the purchasing power of the consumers who are willing to buy a car, and
(iii) to be supportive of the environment.
For the period of 4 December 2008 to 31 December 2009 owners of cars older than 10 years can receive a subsidy of EUR 1'000 towards the acquisition of a new private vehicle emitting less than 160 g CO2 per km or a new utility vehicle (with no carbon restrictions), if their old car is scrapped at the same time.
In a press conference on 8 June 2009, Luc Chatel (Minister of Industry and Consumption) described the impact of the measure: Until 31 May 2009, 175'000 vehicles have benefited from the car scrappage scheme (by the end of August, this figure was up to 330'000, see Les Echos, 2 September 2009). Car sales went up by 12% in May 2009 (compared to declines during the first four months of 2009).
In a press article (La Tribune, 17 July 2009) several government officials (including Finance Minister Christine Lagarde, Recovery Plan Minister Patrick Devedijan and Industry Minister Christian Estrosi) are reported suggesting that the government should abandon or gradually reduce the incentives of the car scrapping scheme, as costs are estimated to reach EUR 390 million rather than initially planned EUR 220 million. 
According to Dow Jones International News, 26 August 2009, Industry Minister Christian Estrosi announced that the car scrappage scheme will be extended in a modified way into 2010. One option would be to reduce the payment gradually from the current level, another would be to encourage car buyers to opt for low polluting models in a bonus-malus system.
Having considered the provision of 19 January 2009 (Décret no 2009-66), which modifies the provision of 26 December 2007 (Décret no 2007-1873) implemented to support the acquisiton of vehicles, our assessment of this measure is that it is non-discriminatory. It puts no restrictions on the type and brand for the acquisition of new private cars (except on carbon emissions) and no restrictions for the acquisition of new utility vehicles. According to an official press statement by the French government on 5 March 2009 the European Commission has confirmed that the scheme is non-discriminatory.
 

AFFECTED SECTORS