Coalition partners reject Green-backed CO2 levy for conventional cars

German chancellor Olaf Scholz’s Social Democrats (SPD) and the business-friendly Free Democrats (FDP) have rejected a Green Party-backed proposal for a climate levy on new combustion engine cars, Handelsblatt reports. Detlef Müller, deputy leader of the SPD parliamentary group, said that he did not support the idea of “a new component for artificially increasing the price of combustion vehicles” in the form of a CO2-dependent climate tax for new car registrations, which was put forward in a strategy paper issued by the Green-led climate and economy ministry. Müller said the government should focus on implementing other coalition agreements instead, such as accelerating the roll-out of charging stations. FDP parliamentary group leader Christian Dürr also criticised the proposal, saying that “in view of the rising prices, the burdens are already high enough. In times of inflation, the state must not artificially inflate prices.”

The state of Lower Saxony, one of the largest shareholders of carmaker Volkswagen, also opposes the initiative. A spokesperson for state’s transport ministry stated that “a considerable amount of tax money is wasted on unnecessary subsidies" and that there was currently greater demand for the federal government to provide the necessary charging infrastructure for electric cars in a timely manner.

According to the Federal Motor Transport Authority (KBA), electric car registrations increased by 26 percent in the first quarter of 2022 compared to the same period in 2021. According to a recent forecast by business consultancy PwC, Germany will fail to reach its target of 15 million electric cars by 2030 due to a lack of charging stations. In contrast, utility association BDEW warned that Germany will only need a fraction of the charging points currently planned.