PARIS, June 1 -- French Finance, Economy, and Industry Minister Thierry Breton in late May announced a "very ambitious biofuels development plan" along with an elaborate energy-savings program in which all gas, heating oil, and electricity suppliers and "all the players within the automobile world" must participate under threat of financial penalties.
"Oil is henceforth a rare and costly product," Breton said, saying the plan will "prepare France for the post-oil period."
A law will make it compulsory for anyone distributing motor oil in France to be "totally transparent and provide permanent information on prices."
Breton has called a June 7 meeting of oil, automobile construction, and agricultural players to examine the plan under which "consumers must be free to choose" their motor fuel in service stations by 2010. He means E85 biofuel—an 85% ethanol-15% fossil fuel mix—alongside the usual fossil fuel.
The government on June 1 will test seven Ford "flexfuel" vehicles in one of France's agricultural regions that produce ethanol-adaptable crops.
Jean-Louis Shilansky, delegate general of the oil industry trade group Union des Industries Pétrolières, described France's plan to accelerate the use of biofuels in transport as "an important project, which merits examination." But he viewed it with caution because it will involve service stations' offering both fossil motor fuels and biofuel on an equal basis by 2010.
Even with oil hovering at $70/bbl, a liter of biofuel is 30% more costly than a liter of gasoline, and "(biofuel) would need to be massively detaxed," Schilansky said. He told OGJ that the government first needs to study all the plan's "logistics, economic, and fiscal aspects." For example, he wondered whether the compulsory nonstop information on service station fuel prices might pose compliance and competition problems for small service stations.
Moreover, the choice of an ethanol-based biofuel in a country where most vehicles run on diesel will further destabilize France's refining industry, which already must import diesel and export surplus gasoline.
In addition, the new system would require a new generation of automobiles. The president of PSA Peugeot-Citroën said gasoline currently contains only 2% biofuels, and existing cars can tolerate only 10% without modification. Schilansky suggested it would be best to start with fleet vehicles belonging to corporations, administrations, and other official entities.