Germany mulls climate levy for new combustion engine car registrations

Germany's climate and economy ministry (BMWK) has released a strategy paper suggesting that a climate levy for new registrations of combustion engine cars could help e-cars become cheaper than their fossil-fuel powered equivalents, reports Handelsblatt. The paper, which says a CO2-dependent climate levy would be used in combination with a continued e-car buyer's premium, also states that minister Robert Habeck is considering “increasing company car taxation for fossil combustion cars” by “taxing the imputed income for pure combustion cars.” The Green Party minister, alongside federal finance minister Christian Lindner and transport minister Volker Wissing, both of the Free Democratic Party (FDP), recently received a joint letter from 13 companies, including Aldi Süd and Ikea, asking for a change of incentives for environmentally friendly mobility and the conversion of car fleets to e-cars in particular. The German government presented an emergency climate protection programme last week in response to its failure to meet its own climate targets, particularly in the transport sector. However, a revision of the company car privilege was still absent, despite the government’s goal to have around 15 million electric cars on the roads by 2030.

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. However, a report by business consultancy PwC warns Germany will not manage to reach its target of 15 million electric cars by 2030 due to a lack of charging points, and suggests 10 million as a more realistic figure for 2030.