Germany must revamp system of mobility taxes – UBA report

Germany has to reform its transport sector taxes to help reach climate targets, but also to ensure sufficient revenue in a climate-friendly mobility future, says a report commissioned by the Federal Environment Agency (UBA) and published by the Institute for Applied Ecology (Öko-Institut) and Green Budget Germany (FÖS). “The current system of taxing mobility stems from a ‘fossil age’,” write the authors. “It no longer fits the requirements for a sustainable, fair, individual mobility.” The faster electrically powered vehicles replace conventional petrol and diesel vehicles in the coming years, the faster the revenue from energy taxes will decline, says the report. Should the transport sector reach its 2030 greenhouse gas reduction target through comprehensive electrification, revenues would drop from 35 billion euros (2019) to 23 billion euros, if the current system remained in place. Taxes on electricity would not fill the gap left behind by declining tax revenues on petrol and diesel. The authors propose short-term measures from 2023, including ambitiously raising the national carbon price on transport fuels while abolishing the renewables levy, basing the truck toll partly on CO2 emissions and higher taxes on company cars. In the long term (from 2035), a mileage-dependent car toll system together with the truck toll can ensure sufficient revenue to finance the transport system by those who actually use it.

Germany’s transport sector is “miles away” from reaching its 2030 climate target or climate neutrality by 2045, write the authors. Greenhouse gas emissions from the sector have remained almost unchanged since 1990, as efficiency gains of passenger cars have been eaten up by a move to bigger and more powerful models.