Ethanol-based fuel becomes top-selling petrol in France

Source: By Sybille de La Hamaide, Reuters • Posted: Tuesday, November 7, 2017

PARIS (Reuters) – Gasoline containing up to 10 percent of ethanol has become the top-selling petrol in France, its largest market in the European Union, helped by a tax break that made the crop-based fuel more attractive to drivers, French ethanol producers said on Tuesday.

Sales of unleaded SP95-E10 accounted for 38.5 percent of total petrol sales in France in September, the Bioethanol Collective said in a statement.

That compared with 36.8 percent for SP95 and 23.6 percent for the higher-quality SP98.

Over the first nine months of 2017, SP95-E10 was also ahead with a share of 38.2 percent versus 37.5 percent for SP95.

The rise in demand for SP95-E10 in France contrasts with Germany where sales of E10 petrol fell last year despite a price advantage due to concern it is not suitable for all cars and with Britain where it has not yet been introduced.

Since its launch in 2009 in France, SP95-E10 has widened its network to more than one in two petrol stations in the country where it is 4 to 5 cents a liter cheaper than SP95 thanks to a tax incentive.

Ethanol, made from grains or sugar in France, has also benefited from French drivers’ distrust of diesel after Volkswagen’s (VOWG_p.DE) emissions test cheating scandal.

Registrations of petrol and diesel cars were nearly equal in France over the first 10 months of the year in a setback for diesel whose market share was 8.6 percentage points ahead of petrol a year earlier, French carmakers’ association CCFA said.

Demand for SP95-E10 in France was also boosted by an increase this year in the legal biofuel blending level in transport fuel to 7.5 percent overall from 7 percent previously.

To meet this goal, fuel distributors were tempted to promote ethanol-rich and easy-to-use SP95-E10 instead of standard SP95 and SP98 which also contain ethanol but only up to 5 percent, or E85 – with between 65 and 85 percent of ethanol – that requires specific engines or conversion kits.

Ethanol’s expansion is being threatened by a proposed change in EU biofuel policy over concerns that biofuels could contribute to high food prices and indirectly cause deforestation.

The EU executive has proposed cutting by nearly half the use of crop-based biofuels, which include ethanol, to a maximum 3.8 percent by 2030. The measure still needs to be approved by member states and lawmakers.

Reporting by Sybille de La Hamaide, additional reporting by Gilles Guillaume in Paris and Michael Hogan in Hamburg; Editing by Adrian Croft