Germany needs CO2-based vehicle tax to accelerate e-mobility – report

New internal combustion engine vehicles should be taxed exclusively according to their CO2 emissions to accelerate the switch to electric mobility, the Climate Neutrality Foundation writes in a report. The foundation argues that the measures Germany has taken so far to promote the mobility transition are insufficient to achieve its 2030 climate targets. "Without a rapid change in drive technologies, the climate goals in Germany cannot be achieved. Therefore, new vehicles with CO2-emitting combustion engines must no longer have a cost advantage over those with CO2-free drives," said head of the foundation Rainer Baake. According to the proposal, petrol and diesel vehicles will be taxed according to their CO2 emissions in such a way that, calculated over a ten-year period, the average price differences to battery-electric vehicles would be compensated. Pure battery-electric drives would be exempt from the tax.

At the start of this year, Germany implemented a national CO2 price in the transport and heating sectors. The emissions trading system applies to fuels such as petrol, diesel, heating oil and gas. The system started on 1 January with a fixed price of 25 euros per tonne of CO2, which environmentalists say is too low to really make an impact. Germany aims to cut emissions in the transport sector by more than 40 percent by 2030. An increase of the EU’s 2030 emissions reduction target, which is currently under discussion, could result in an even more ambitious target for Germany’s transport sector. The German car industry has committed to achieving climate neutrality by 2050.