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France announces ban on petrol and diesel sales from 2040 while Shell braces for lower oil demand

Thu 13 July 2017 | Back to news list

The French Government has announced that it will outlaw the sale of all petrol and diesel vehicles by 2040 as part of a pledge from the new Macron administration to make France carbon neutral by 2050.

The country's new environment minister, Nicolas Hulot, said that France will also ban any “new project to use petrol, gas or coal”, as well as shale oil, by that date.

Mr Hulot added: "The carbon neutral objective will force us to make the necessary investments".

French drivers will be offered financial incentives to scrap their polluting vehicles for cleaner alternatives. Mr Hulot said that: “the government will offer each French person a bonus to replace their diesel car dating before 1997 or petrol from before 2001 by a new or second-hand vehicle,” he said.

The Daily Telegraph reports that France is not the only country aiming to ban combustion-powered cars in some form. Germany has stated that it wants to do away with 100 per cent combustion-powered vehicles by 2030, as does India. The Netherlands and Norway have said they plan to do so by 2025.

Most recently, the UK Government has announced that sales of new cars powered by 'conventional' diesel and petrol will be banned from 2040 as part of plans to improve urban air quality as well as tackle climate change.

Diesel and gasoline vehicles represented about 95.2 percent of French new car fleets in the first half of year, while electric vehicles hold 1.2 percent of the market. Hybrid cars make up about 3.5 percent.

The new French Government has also stated that it will take measures to restrict the use of palm oil in the production of biofuels with the aim of reducing indirect deforestation.

In a related development, the Swedish car maker Volvo became the latest manufacturer to announce a decisive switch to electrification of its vehicles.

Volvo Cars’ president and chief executive, Hakan Samuelsson, announced that all new Volvo models from 2019 will enjoy some form of electric propulsion, either as hybrids that will retain a conventional petrol or diesel engine, or as purely electric models.

He said that depending on customer demand, when this generation of models reaches the end of its cycle in the mid-2020s, then the last ever Volvo car with a petrol or diesel motor could roll off the production lines, possibly coinciding with Volvo’s centenary year of 2027. 

In response to the spate of recent announcements about electrification of the transport secto the Royal Dutch Shell Chief Executive, Ben Van Beurden, said the oil major had changed its company mindset to a “lower forever” oil price environment.

Shell is already shifting its production focus from oil to natural gas, but in its clearest statement of intent to date Mr Van Beurden said that within the next year Shell will reveal early plans for a deeper presence in renewable energy and in the supply and delivery of electricity to tap into the boom in electric vehicles.

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