The CO2 price, expensive electric cars, charging current at more than 50 cents per kilowatt hour and the first new demands for a tolling scheme even more far-reaching than the spectacularly unsuccessful one proposed by Federal Transport Minister Andreas Scheuer. Will mobility soon become unaffordable?
As indicated by the current figures of the German Federal Statistical Office published on the occasion of this year’s International Automobile Association (IAA) motor show, prices for purchasing and operating motor vehicles have increased by 4.6 per cent since the last IAA in September 2017 – measured using the so-called motoring price index – and are therefore somewhat higher than consumer prices as a whole. These rose by 3.4 per cent between September 2017 and July 2019.
The sharper rise in vehicle-related prices is above all attributable to the rise in fuel prices since autumn 2017. German pump prices for premium-grade petrol increased between September 2017 and July 2019 by 8.5 per cent – diesel even by 10.5 percent.
Even when buying a car though, customers had to dig deeper into their pockets. The price for new cars was 4.1 per cent higher. Used car prices on the other hand rose by only 2.0 per cent during the period under review.
With the car industry’s plans to market an increasing number of electric vehicles to circumvent the financial penalties if the European CO2 limits for the new car fleets are exceeded, new car prices at least ought to continue to rise.
The plans of a number of municipalities from Southern Germany to replace the unsuccessful tolling model of Federal Transport Minister Andreas Scheuer (CSU) with an even more extensive scheme also mean increasing costs for all motorists. A kilometre-based toll has been suggested for residents and foreigners on Federal and State roads as well as for municipal roads.
The burden of such a model would be particularly heavy on commuters and frequent drivers. Moreover, they are also among the first affected when it comes to taxing fossil fuels by their amount of CO2 or graduating taxation and insurance for motor vehicles according to emissions. If they cannot afford an electric car, they content themselves with their trusty petrol-powered vehicle and fork out the extra expenditure that the State imposes on them under the guise of climate protection.
There are other alternatives however, if a correct and ideologically independent approach is adopted, as the latest proposal by the petroleum industry association shows.
The petroleum industry in Germany is therefore calling for introduction of CO2-indexed pricing to help climate-friendly fuels achieve a breakthrough in road traffic. Unlike other proposals to date, this proposal by the petroleum industry association (MWV) and its member companies is largely possible without any additional burden on motorists.
This is because the tax scheme is to be revised in such a way that more climate-friendly fuels are offered, without the need to increase taxation as a whole.
From the outset of this transformation, the model would mean a high CO2 price on petroleum products. “This would be possible without a significantly greater burden on consumers than at present”, said MWV Managing Director Christian Küchen. The core idea behind this model is that appropriate CO2-indexed pricing makes it worthwhile to offer increasingly low CO2-emission and thus largely tax-free fuels, thereby improving the climate footprint on the roads. “What is important for us is that fuels are cleaner, but not more expensive”.
This works by reducing the rates of energy taxation on fuels to the EU minimum tax rates. The remaining portion of the present energy tax will be transformed into CO2-indexed pricing without affecting revenue. During a second stage and following revision of the Energy Tax Directive, fuel taxation could be geared entirely to CO2 emissions. This would, for example, allow a CO2 price of almost 300 euros per tonne of CO2 for petrol, without the customer having to bear higher tax rates than at present. “It can be assumed that this would result in a greater incentive to develop and market low greenhouse gas or greenhouse gas neutral fuels”, said Küchen.
If the switchover gives rise to additional state revenue, the latter should be used primarily to reimburse members of the public.
Will political decision-makers follow this proposal?