Fleet News

Member States levy CO2-based taxation

An increasing number of Member States levy CO2-based taxation or incentivise electric vehicles.

There are currently seventeen EU countries that levy passenger car taxes partially or totally based on the car’s carbon dioxide (CO2) emissions and/or fuel consumption including the United Kingdom.

By April last year, sixteen Member States had CO2-related taxation, up from fourteen in 2008, eleven in 2007 and nine in 2006. New to the list are Germany, that introduced such system in the summer of 2009, and Latvia.

Incentives for electrically chargeable vehicles are now applied in all western European countries with the exceptions of Italy and Luxembourg. The incentives mainly consist of tax reductions and exemptions, as well as of bonus payments for the buyers of electric vehicles.

Electric mobility will make an important contribution towards ensuring sustainable mobility. However, advanced conventional technologies, engines and fuels will further play a predominant role for years to come.

Failure to harmonise tax systems weakens the environmental benefits that CO2-based taxation and incentives can bring. European automakers have long called for the abolition of car registration taxes which are still widely applied in the EU. Generally, registration taxes threaten fleet renewal. 

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