Using Vehicle Taxation Policy to Lower Transport Emissions: an Overview for Passenger Cars in Europe

In Europe, emissions of carbon dioxide (CO₂) from transportation have not decreased in as much as in other sectors; therefore discussions on policy focus on how the transportation sector can help meet climate protection goals in the European Union. A crucial policy option is the increase of taxation on vehicles with high emissions while easing tax for low-emission vehicles, as different taxation levels can strongly affect consumers' decisions on vehicle purchases. Such taxation, together with requirements on manufacturers to increase production of low-emission vehicles, could help accelerate reductions in emissions. In this report the authors provide an overview of vehicle taxation policy across Europe, seeking to find how governments can influence consumers towards low-emission vehicles. Automobile taxation policies in Europe are summarized, and five European markets (France, Germany, the Netherlands, Norway, and the UK) are reviewed. The impact of taxation policy on costs for selected vehicle models is assessed, and vehicle taxation policies in the five markets are compared in order to identify which policies offer the highest benefit for consumers who opt for a low-emission vehicle. For the research, the authors used the specifications of Volkswagen Golf models with various combustion and drive train systems. The Golf was chosen as a reference because it is Europe's best-selling automobile, and presents a useful middle point in terms of price and size. Based on their findings, the authors offer several recommendations on how EU governments can use taxation to encourage purchases of low-emission automobiles. The authors recommend: significant tax advantages for low-emission vehicles at the point of purchase; continued tax benefits for low-emission vehicles during their use; inclusion of the emissions of a vehicle as part of the company-car tax system; and regular balancing and re-adjustment of the tax system to be self-sustaining.

• Record URL:
  https://www.theicct.org/sites/default/files/publications/EU_vehicle_taxation_Report_20181214_0.pdf
• Corporate Authors:

  International Council on Clean Transportation Europe

  Berlin,   Germany  10178
• Authors:
  • Wappelhorst, Sandra
  • Mock, Peter
  • Yang, Zifei
• Publication Date: 2018-12

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References;
• Pagination: 54p

Subject/Index Terms

• TRT Terms: Carbon dioxide; Economic policy; Exhaust gases; Taxation
• Identifier Terms: Volkswagen automobile
• Uncontrolled Terms: Low emission vehicles
• Geographic Terms: European Union
• Subject Areas: Economics; Environment; Highways; Policy; Vehicles and Equipment;

Filing Info

• Accession Number: 01696563
• Record Type: Publication
• Files: TRIS
• Created Date: Feb 27 2019 9:54AM