Germany is not doing enough to decarbonize its transport sector and reduce pollution from road traffic, the OECD criticized in a rapport published this Monday, May 8.

“The decarbonisation of the German transport sector is not on track”writes the Organization for Economic Co-operation and Development (OECD) in this report devoted to the climate policy of Europe’s leading economy.

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The transport sector is traditionally the black point of the CO2 emissions balance sheet in Germany. Like the previous year, in 2022 it did not meet government targets for reducing greenhouse gas emissions, recording a slight increase of 0.7%, according to official figures.

Missed Opportunities

“Efforts to reduce emissions are hampered by the increase in the number of passenger cars and the growth in heavy truck traffic”notes the OECD.

The OECD deplores the missed opportunities for reform, whether imposing speed limits on motorways, road or urban tolls, raising parking prices.

Transport policy is one of the bones of contention within Olaf Scholz’s coalition between the Liberal party’s transport minister and environmental ministers who accuse him of not doing enough against car pollution.

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If electromobility will play a decisive role in the decarbonisation of transport, “Germany should not, however, aim to replace every petrol or diesel vehicle with an electric car”warns the OECD.

The country is called to “take bold steps to move from isolated measures aimed primarily at putting less polluting cars on the road, to an integrated mobility strategy”.

An advantageous tax system for the car

The disproportionate place given to the car “is reflected in the tax system”adds the OECD, noting that in Germany, “the revenue from transport-related taxes is well below the OECD average”.

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Thus, Germany “is one of the few countries that does not levy a tax when buying or registering a vehicle”.

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Company cars, which represent more than 60% of new cars, continue to be subject to low flat-rate taxation (1%), leading to tax revenue losses estimated at 3.1 billion euros for 2018. Employees commuting to work by car also benefit from an advantageous flat-rate allowance.

Environmentally harmful subsidies have increased over the past decade, according to the OECD, being estimated in 2018 at €65 billion, up from €48 billion in 2008.

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