Climate cabinet: VDA favors quantity-based carbon pricing

Automotive industry sees goal and future perspective as greenhouse-gas-neutral mobility by 2050

Climate protection is one of the greatest challenges of our time. The automotive industry wants to play an active part in shaping the change by using innovative technologies to move toward sustainable individual transport. The German automotive industry has therefore prepared a position paper containing the key points:

Greater drive for innovation and more investment will be needed to ensure we can achieve the target of greenhouse-gas-neutral mobility by 2050.

The VDA is calling for a unified price on CO2 emissions, irrespective of where they occur. A quantity-based system (emissions trading) is preferable to a tax because it does not have to be continually adjusted, and it imposes a cap on emissions. Burdening the transport sector alone is not the way forward. The right way is therefore to build on a national system for the construction and transport sectors, with a long-term view that already includes later integration into EU emissions trading. Carbon-pricing on this basis, with maximum and minimum prices, will provide greater planning security for customers and for the industry.

The revenues from carbon-pricing should be used mainly to fund investments in climate-friendly mobility. Another aspect is the social balance, which means minimization of the cost burden, and no extra costs for particular products or forms of individual mobility. Individual mobility has to be sustainable, and must not become a luxury item.

It is welcome that the CDU party wants to limit the tax burden on companies in Germany to a maximum of 25 percent. The legislation on corporate tax urgently needs to be modernized. This would provide an important boost to companies’ drive for innovation and their future viability in the ever increasing international tax competition. Furthermore, the VDA is in favor of reforming the system of taxes and levies on energy, so that both fiscal and control objectives are brought into a sensible relationship with the unavoidable burden on ordinary citizens.

An effective offensive for expanding the charging infrastructure will require the creation of a million public charging points in Germany by 2030, along with another 100,000 fast charging points, and several million private charging points. This will depend crucially on a coordinated approach at all levels including the municipalities, improved promotion, and the immediate elimination of legal obstacles such as the legislation on rented property, residential property and the energy industry.

To promote the rapid ramp-up of electric mobility, the draft of the German Annual Tax Act should be expanded to include commercially used passenger cars and plug-in hybrid electric vehicles (PHEVs), and implemented quickly. The VDA also supports the efforts by the German Government to help bring about a breakthrough for additional alternative propulsion systems and fuels, alongside electric mobility.

Another positive aspect is the establishment and further expansion of the refueling infrastructure, because renewable, climate-neutral fuels (hydrogen, sustainable biofuels, e-fuels created using renewable electricity) are essential for achieving extensive decarbonization of the transport sector by 2050. Renewable fuels should also qualify for energy tax breaks.