ACEA

Trend towards CO2-related car taxation continues

Since the beginning of this year, the number of EU countries with CO2-related car taxation is up to sixteen. All Western European countries now levy passenger car taxes that are partially or totally based on the car’s carbon dioxide emissions and/or fuel consumption, completing a trend that peaked in 2007 and 2008.

• A detailed overview of CO2 taxation can be found here

The data stem from the European Automobile Manufacturers’ Association Tax Guide 2009. The annual Tax Guide gives an overview of motor vehicle taxation in the twenty-seven Member States of the European Union, the countries of the European Free Trade Association as well as Turkey. In 2008, motor vehicle taxes in the EU 15 added up to EUR 378 billion or 3.3% of GDP.

The Tax Guide is compiled with the help of the national associations of motor vehicle manufacturers or importers in these countries and describes in detail the taxes that are levied on the sale, registration, ownership and the use of motor vehicles in each country.

• Highlights of the Tax Guide can be found here

In addition, national and regional governments in 15 member states have introduced incentives for buying electric vehicles.

• Click here for a full overview of incentives for buying electric vehicles

Fleet renewal is key

Romania was the first and so far only Eastern European Member State to introduce CO2-related taxation last year as part of a more comprehensive overhaul of vehicle taxation in the country. In most Central and Eastern European countries, the main concern of policy makers remains to reduce the level of old vehicles on the streets with pollutant emission standards of below Euro 3.

Fleet renewal improves both the CO2 efficiency and the level of pollutant emissions of cars and is essential to achieve the environmental targets society has set. The market incentives and scrapping schemes recently introduced across the EU to soften the impact of the recession benefit both the economy and the environment. Up till March, eleven EU countries had put a fleet renewal programme in place.

• An overview of scrapping schemes in the EU can be found here

CO2-taxation shapes consumer demand

The European car industry welcomes the clear trend towards CO2-related car taxation as fiscal measures are an important tool in shaping consumer demand towards fuel-efficient cars. The environmental results may, however, be negatively influenced by the widely varying systems in each country. The European car industry urges EU governments to show more resolve in harmonising car taxation schemes.

The car industry advocates a linear system, in which tax levels are directly proportionate to the car’s CO2 emissions and every gramme of CO2 is taxed the same. Car tax schemes should neither include nor exclude specific technologies and be budget neutral in end-effect.

• Read also the ACEA background on taxation and ACEA CO2 dossier

last updated 06/10/2009

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