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By Marion Douet and Laurence Frost

PARIS, June 13 (Reuters) – France should rein in tax

policies favouring diesel engines after a World Health

Organisation review found a clear link between their exhaust

emissions and cancer, the country’s environment minister said.

The French auto market, which was 72 percent diesel last

year, should reduce its dependence on the fuel, Nicole Bricq

told reporters on the sidelines of a conference in Paris on

Wednesday.

“The national vehicle fleet is completely unbalanced,” said

Bricq, who took office last month following the election of

Socialist President Francois Hollande.

Tax policies had encouraged this imbalance and should now be

adjusted, Bricq said.

“I’m in favour, and the competent ministers will have to be

convinced,” she said. “This study comes at an opportune moment

for us to make changes.”

European countries have favoured diesel partly because cars

using it are more fuel-efficient than similar gasoline-powered

vehicles and emit less carbon dioxide.

Bricq was speaking a day after the WHO’s cancer research

agency said its review of all relevant published science had

removed earlier doubts about the carcinogenic effects of diesel

exhaust.

France levies a tax of 43 euro cents per litre on diesel and

61 cents on petrol, according to industry data for 2011, leading

to a similar difference in prices at the pump.

The country’s main automakers, PSA Peugeot Citroen

and Renault are among the most reliant on diesel sales

in their home market and the rest of Europe, analysts say.

Peugeot said it was still waiting for a full copy of the WHO

findings before responding. Since 2010, all its vehicles have

been equipped with filters that leave no detectable trace of

cancer-causing particles or benzopyrene molecules in their

exhaust, spokesman Jean-Baptiste Mounier said.

Renault declined to comment, but other automakers and

industry bodies have attacked the findings.

“We’re convinced that this blanket judgement is completely

unjustified for modern diesels,” said Eckehart Rotter, a

spokesman for Germany’s VDA car manufacturing association.

Volkswagen, the biggest European automaker by

deliveries, and which is currently seeking to increase its U.S.

diesel sales, said the study “does not reflect the diesel

technology that has been on the market since 2004″.

The WHO cancer agency, which had first classified diesel

exhaust as “probably carcinogenic to humans” in 1988, said on

Tuesday it had removed the “probably” from that rating on the

basis of its review.

The rating on petrol exhaust was also reviewed and left

unchanged as “possibly carcinogenic”, two risk categories below

diesel.