Comprehensive tax reform in German transport sector could bring climate targets in reach - report

Changes to taxation and CO2 pricing should be used to make the transport sector more sustainable, a report commissioned by the Federal Environment Agency (UBA) has found. The paper found that higher CO2 prices combined with an abolition of the renewables levy, taxation reforms for company cars and a bonus-malus system for car purchases could all help the sector cut its emissions by 2030. The authors stated that, by the end of the decade, the CO2 price should reflect “the true societal costs of climate protection,” and that this should be made affordable to consumers by scrapping the renewables elevy. They also argued that the private use of company cars should be taxed far more heavily. "The taxation of our mobility stems from the fossil age,” said Dr Wiebke Zimmer, deputy head of the Resources & Mobility department at the Öko-Institut, in a press release. "It no longer fits the requirements for sustainable, equitable, individual mobility and must therefore be realigned."

Emissions from the transport sector have remained stubbornly high in Germany for many decades, as gains from more efficient engines have been eaten up by heavier cars. Even as the country's national car industry finally has set out on transitioning to electric mobility after years of reluctance and resistance, the country's challenges in the transport sector remain significant and include a makeover of the rail infrastructure, reducing car use in cities and encouraging new models of sharing and renting vehicles.