I found an article on the French site Moteur Nature that states that low taxes on LPG is actually counterproductive. The reason? The cost of CO2 per km becomes cheaper, and therefore more pollution hits the air. Since virtually all gasoline cars can be converted to run on LPG, Moteur Nature says this is an open door for people to keep those large SUVs instead of downsizing (I know of a couple such cases among my acquaintances). Here is a good example:
Citroën C2 1.1, a subcompact with a small gasoline engine, pollutes 141 g of CO2 per km. It burns 5.8 l/km (40.5 mpg). At France's price of gasoline, 1.35 EUR/liter (that's like 7.8 USD/gallon), we have to spend 78.29 EUR to run 1000 km and we'll produce 141 kg of CO2.
Then, take a more polluting car: Ford C-Max 2.0, a compact people mover. It pollutes 169 g of CO2 per km. It burns 10.5 l/km (22 mpg). At France's price of LPG, 0.75 EUR/liter (that's like 4.4 USD/gallon), we'll spend 78.29 EUR to run 1000 km while producing 169 kg of CO2.
The conclusion is that LPG is not a good solution if we want to reduce CO2 emissions. Calculating for the complete lifespan of a car (about 150,000 km / 90,000 miles), a car running on LPG will produce 4.2 tons of CO2. Meanwhile, Germany just reduced government support for biofuels but has kept tax breaks for LPG. Moteur Nature is against that policy.
[Source: Moteur Nature]