Seventeen EU member states levy carbon dioxide (CO2)-related taxes on passenger cars, while fifteen governments provide tax incentives for electrically chargeable vehicles. In 2009, motor vehicle taxes in the EU-15 amounted to €377 billion or 3.4 percent of GDP, according to a statement released by the European Automobile Manufacturers' Association (ACEA) on April 21.
The seventeen EU countries that levy passenger car taxes partially or totally based on the car's CO2 emissions and/or fuel consumption are: Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Ireland, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Romania, Spain, Sweden and 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 a system in the summer of 2009, and Latvia. Italy chose not to prolong its one-year fleet renewal scheme which included both CO2-based incentives and incentives for electric vehicles.
Incentives for electrically chargeable vehicles are now applied in all western European countries with the exceptions of Italy and Luxembourg. New to the list is Belgium. The Czech Republic and Romania take the number of member states up to fifteen. The incentives mainly consist of tax reductions and exemptions, as well as of bonus payments for the buyers of electric vehicles.
ACEA stated that the European car industry supports the further introduction of fiscal incentives for fuel efficiency. Tax measures are an important tool in shaping consumer demand towards fuel-efficient cars, and help create a market for breakthrough technologies, notably during the introduction phase, ACEA said. It went on to say that innovations generally first enter the market in low volumes and at a significant cost premium, and this needs to be offset by a positive policy framework.