The phase-out of leaded gasoline in the EU: a successful failure?

Abstract

The objective of this paper is to analyze in both descriptive and econometric terms the phase-out of leaded gasoline consumption in the EU countries. The phase-out process is characterized by increased consumption of unleaded gasoline. We analyze the importance of price differences, share of catalytic converters, income per capita, and country characteristics in the phase-out process. Since the expected maintenance costs of using unleaded gasoline in cars without catalytic converters compared to the use of leaded gasoline differ insignificantly according to available evidence, and consumers still use leaded gasoline even though unleaded gasoline is cheaper, we interpret this as a lack of reliable information. The results indicate that countries, which have not yet phased-out leaded gasoline, should do this by either banning leaded gasoline or use a larger tax differential complemented with information.