Interesting things are happening in the francophone world. Last week I reported that the Quebec government had decided to stop supporting any new ethanol plants based on corn as a feedstock. Now the French government, perhaps flowing out of its broad social dialogue on the environment (known as “Le Grenelle français de l’environnement“), is reported to be thinking of slashing subsidies benefiting the production of ethanol in the country.

Ooh la la, what in the world is going on?

This news first appeared in an article published in Britain’s Guardian newspaper. It has since been picked up both by Biopact (who, naturally, sees it as a great opportunity for increased imports of ethanol from developing countries) and the Competitive Enterprise Institute’s “Facts About Ethanol” web site. (Ethanol makes for strange bedfellows.)

To quote from the original article:

The French ethanol sector is heavily reliant on subsidies in the form of a lower TIPP [Taxe Intérieure de consommation sur les Produits Pétroliers] fuel tax, which makes the fuel competitive with gasoline at fuel pumps.

“The talks (on upping the TIPP tax) are well advanced in the framework of inter-ministerial discussions and are causing great concern,” said Alain Jeanroy, co-ordinator of the ethanol industry group.

No one from the relevant ministries was immediately available to comment.

Ethanol currently benefits from a 0.33 euro per litre discount when sold at petrol pumps, but that amount could soon be halved, said other industry sources.

“When taking into account commitments taken with industrial investments of close to 1 billion euros and the recent start-up of production units, we would not understand (such a move),” Jeanroy said.

France produced 235,000 tonnes of ethanol and 631,000 tonnes of biodiesel in 2006, the French farm ministry said.

France decided to go beyond the EU target and incorporate 5.75 percent of alternative fuels by end-2008, seven percent by end-2010 and 10 percent by end-2015.

Not entirely unrelated, there is another alternative to gasoline in France that is attracting increasing attention: compressed air. According to an article in the International Herald Tribune published on October 24, Guy Nègre, a Frenchman who founded Moteur Developpment International (now MDI Enterprises), in Carros, France, has recently signed a 20-million-euro (about $28 million) agreement with Tata Motors, India’s largest automaker, to deliver vehicles that run on compressed air in hopes of putting them on the market in India by 2009.

The compressed air that drives MDI’s cars is stored in carbon-fibre tanks located under the chassis. (A video featuring its cars can be seen here.) Other air-powered cars are under development using different systems, and the Scuderi Group, of West Springfield, Mass., is working on a hybrid engine design that compresses air and burns petroleum fuel in separate cylinders and uses some compressed air to extend the petroleum engine.

MDI’s cars are still prototypes, and look like they would not survive even a parking-lot accident with a Hummer. (I have yet to be able to determine whether they will be outfitted with airbags.) And it will be years before Americans see such vehicles on the streets. But lets hope that, in the meantime, governments outside La francophonie stop acting as if ethanol is the only possible answer to future transport needs and start applying more broad-based policies, like a carbon tax, to encourage alternatives to petroleum fuels.