Germany has finally announced how it will reform its tax system to factor in CO₂ emission levels. After a long political struggle between the two main parties, the SPD and the CDU/CSU, the system will not only change from being based on engine displacement to be dependent on CO₂ emission levels, but will change hands. Until now, car taxes were a matter of the Länder (states). This new system is a Federal one, and the switch is blamed as the reason for the delay. The Länder will get €8.9 billion from the Federal government to compensate their income loss.

The new tax system is expected to roll out on January 1st, 2010, a bit late according to Germany's ADAC car club. ADAC stated that consumers won't be convinced to purchase more fuel-efficient cars until that late date. Another car club, called VCD, said that the new tax was too light on cars that burn a lot of fuel.

The system will leave the tax as it is for vehicles following the Euro-2 and Euro-3 standards, which is calculated on engine displacement. It remains unchanged for owners of classic and vintage cars as well. Currently, the average car sold in German produces 170 g/km of CO₂, which is quite a ways away from the EU's limit of 130 g/km expected for 2012.

[Source: Auto News]

It's easy to argue that road taxes are quite unfair because they're flat: You pay fees to drive around; it doesn't matter how much you actually use the car.

The Netherlands has decided to improve the country's road tax by taxing according to the vehicle type, usage, hour and roads the vehicle is using. The system uses GPS, a car transmitter and a standard cell phone GSM network to send this information to a central computer that processes the information. Once these figures are calculated, the driver is charged. Congestion and the environment are both taken into consideration in the rate scheme. Using a highway that enters a city in peak hours while driving an SUV will be taxed more than driving a small car in a rural area where private vehicles are more of a necessity.

Dutch officials hope the system will reduce CO₂ emissions and congestion, because the Dutch government claims that there is no more room to build more roads. Critics say this system is an attack on privacy: a computer will know where and when you've driven, although the company that implements the system guarantees that this information won't be stored once translated into money. The system starts in 2011 for freight transport and will be expanded to include cars in 2012. Full deployment of the system is scheduled to be completed in 2016. A similar system has been under study in the UK.

[Source: Qué!]

A win is a win, right? We're content to consider the fact that two-thirds of new car buyers in the U.K. are considering going green for their next car purchase a good thing, despite the fact that most of them are doing so to save money, not the environment. What Car? group editor Steve Fowler says that "with the cost of living increasing and with wages failing to keep up, car buyers are saying financial pressures are of more concern than helping the environment." If this is the case, it seems that new graduated road taxes in the U.K. may have the desired effect of forcing consumers to purchase low-emitters. Follow past the break for the entire press release.

The ACEA (European Automobile Manufacturer's Association) recently published a statement that calls EU members' tendency to tax vehicles according to CO₂ production figures a positive step. The ACEA recognizes that it's an effective and wise measure to make motorists choices more fuel-efficient vehicles. They do not, however, think that a Registration Tax (such as Spain) is adequate or that most of the work is done, since current schemes still rely on power, cylinder capacity or a combination of the two.

Only 11 EU members have CO₂ emissions-based tax schemes. ACEA says that the 27 state members should have similar rules, because it would not only limit carbon emissions but would also help automakers adapt to EU tax systems.

The main points for their proposal are:

• All car duties should be substituted by a circulation tax based on CO₂ production figures.
• The targets for CO₂ reduction should be technology-neutral (Austria got some criticism for not doing that).
• The taxing scheme should be independent of vehicle class (SUVs anyone?)
• The taxing scheme should be linear, simply based on a tax per gram of CO₂.

There's also a complete section related not only to what cars produce but the fuels they use. Of course, ACEA's idea is to tax fuels according to CO₂, so:

• Fuel tax systems should prioritize production reduction.
• Fossil fuels would have the highest rate possible. Other fuels would get tax reductions according to the CO₂ advantage of the alternative fuel in question.
• Alternative fuels should be certified stating their CO₂ performance.

[Source: ACEA]

So much has been written already regarding London Mayor Ken Livingstone's new road tax that we never really spent too much time analyzing the plan itself. Fortunately, though, Clean Green Cars did it for us. EDIT: The Vehicle Excise Duty is different than the new congestion charge that Ken Livingstone is implementing. Sorry for the confusion, and thanks for the correction. As it stands, the road tax divides vehicles up into twelve "bands", separated by how much CO₂ they emit. All of that seems to make some sense at first, until the numbers are crunched to reveal that the bands are divided up rather oddly. For instance, the eleventh band, labeled "L," carries an increase of £120 over band "K", while the next step up the ladder carries only an increase of £25. Why aren't vehicles progressively punished based on their emissions?

If this data seems difficult to understand, take a look at the press release and accompanying press release pasted after the break. It may serve to clear things up a bit. Any thoughts regarding the makeup of these taxes are welcome in the comments.

UPDATE: Headline also changed.

Do you live in the UK? Do you drive a gas guzzler, that is, a car which road tax falls into band G? Bad news for you. Mr. Taxman, well, chancellor Alistair Darling, is going to tweak the tax system next week to give it some "green flavor." In last year's budget, the British government announced a tax increase for polluting "band G vehicles" from £300 ($603) to £400 ($804) that will take effect next month. There was also a cut for "band B" vehicles, which have lower emissions, from £40 to £35.

But there's more, because these policies will be pursued further. Let's take company cars. Britain's fleet and business market is one of Europe's largest, accounting about 2/3 of total car sales. At present, someone driving a fuel-saving car pays 15 percent tax, or 35 percent if it's a polluting car. Mr. Darling is thinking about lowering that 15 or raising that 35 percent band. There's also the treatment of mileage run up at work. At present, Britons have a single tax-free level of 40 pence per mile but the British government could introduce new bands, such as 60 p/mile for greener cars and 20 p/mile for more polluting vehicles.

Julia King, vice-chancellor of Aston University, wrote a report that predicted the "almost complete decarbonisation of road transport" by 2050. According to her, electric cars are likely to dominate the roads – although the medium-term solution would involve hybrid gas-electric vehicles and biofuels. These new electric fleet would "only" need 16 percent electric capacity generation increase. Our source article states that her report will be used as justification for the new tax measures.

[Source: Financial Times (h/t to Karl-Uwe for the tip)]

Austria is also changing its taxing system to "punish" the most polluting cars on the road. The new tax scheme, which is called NoVa-Reform, consists of a bonus-malus system that saves or adds taxes to cars depending on a number of factors.

The system results more complicated than the British or the Spanish ones, which rely exclusively on CO₂ emissions: Cars emitting under 140 CO₂ g/km get a "bonus" or discount from the car tax (300 EUR), but you can gain an additional bonus if you use "alternative fuels and technologies" (500 EUR) or a Diesel Particulate Filter (200 EUR). The malus system starts when your car pollutes more than 180 g/km: 25 EUR for each additional gram (initial plans started the malus at 160). If you thought this was complex, there's more: total bonus cannot result in more than a 500 EUR discount and the final car tax can't be negative, although it can be offset.

Criticism has spread considerably in Austria because a family carrier like a Volkswagen Touran with a 1.4 TFSI engine ends up paying more taxes than a Lexus Hybrid.

[Source: Der Standard (link is in German)]

In many places around the world, roads are financed at least in part by a tax added to the price of fuel. When we head to the pumps, we pay for a little bit of the road we drive out onto as we leave the station. But people who make their own biofuels don't pay these taxes and yet they drive on roads other people pay for. To make sure the load is balanced out a bit, many governments tax biofuels whether they are home-brewed or purchased. To get an idea of how this plays out in Alaska, check out this post over at Arctic Vegwerks.

The system for collecting waste oil or biodiesel taxes ($0.08/gallon state and $0.244/gallon federal) in Alaska starts like this:

The user must submit their Alaska Motor Fuel Tax on a monthly basis. Yeah, the tax office would really prefer it wasn't so often, but it's written into law. Seems like they would lose money processing a whole bunch of $5 checks every month! Some states exempt the first 2500 gallons, and the feds only require quarterly taxes, so lobby your Alaska legislators if you want to improve the law!

Arctic Vegwerks goes on to describe just how to fill out the state paperwork and quotes parts of the law that affect some green drivers up north. Got any good stories of how it affects you where you live?

[Source: Arctic Vegwerks]