Cars that are fueled with climate-friendly synthetic fuels – so-called e-fuels – should in future be taxed less than vehicles currently powered by petrol or diesel, said the FDP chairman of the dpa news agency. “If the fuel is climate-friendly, then the taxation of the vehicle tax to the energy tax must be adjusted.” The Ministry of Finance will present a concept for this.
Lindner’s initiative ties in with the fact that his colleague in the cabinet and fellow party member, Transport Minister Volker Wissing, prevailed against the EU Commission after weeks of wrangling about the future of cars with internal combustion engines. The compromise that was found on Friday evening provides that new cars with such a drive can also be registered in the EU after 2035 if they are refueled with climate-neutral fuel. “We are thus opening up important options for the population towards climate-neutral and affordable mobility,” said Wissing on Saturday in Berlin.
The agreement with Brussels, however, met with a mixed response, as did Lindner’s intention to give tax advantages to e-fuels. Baden-Württemberg’s Finance Minister Danyal Bayaz (Greens) told the Handelsblatt: “Before the next subsidy is introduced, it would be more important to finally tackle the uncontrolled growth of ecologically harmful subsidies in tax law.” That would help climate protection and would also be “in the spirit of good regulatory policy “. Otherwise the third step is taken before the first.
The SPD was open to providing an even stronger incentive for climate-friendly technology and use in the taxation of motor vehicles. “Here, however, a coherent overall concept of relief and burdens as well as a reduction in subsidies must be presented in favor of all climate-friendly vehicles – not a Lex E-Fuels,” said parliamentary group leader Achim Post.
Economics Grimm criticizes the FDP for the combustion engine compromise
The co-leader of the SPD Left Party, Sebastian Roloff, does not believe that e-fuels will become relevant for car owners anyway. Even tax benefits didn’t change that. These would “at most affect trucks and airplanes in the medium term”.
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, warned that tax breaks should generally only be considered for promising technologies. “E-fuels have been proven to be highly inefficient, and promoting and improving an inefficient technology goes against all logic of the market economy and the task of the state,” he said.
Apart from that, Lindner always attaches great importance to complying with the debt brake. “Therefore, tax cuts, such as with cold progression or now with e-fuels, are a contradiction to this demand, and he remains unanswered as to how he intends to compensate for lost revenue through such a tax cut.”
E-fuels are produced using electricity from renewable sources, water and CO2 from the air. Unlike conventional fossil fuels such as petrol or diesel, they do not release any additional gases that are harmful to the climate.
>> Read here: Wissing and his FDP send a fatal signal with their e-fuels extra sausage – a comment
Whether cars powered by e-fuels actually have a chance in practice is still an open question. Ferdinand Dudenhöffer, founder and director of the Duisburg CAR – Center Automotive Research, cites the high cost of producing the fuel and the “creepy energy balance” as arguments against such drives – an extremely large amount of electricity is consumed during production.
The economist Veronika Grimm comes to a similar assessment, which is why she has little understanding for the actions of the FDP at EU level. Minister of Transport Wissing “shouldn’t have opposed this, that mainly lost trust in Europe,” said the energy economist.
In addition, the hope of consumers and corporations that the combustion engine is not dead could still blossom in the end. “People could continue to buy combustion engines in the hope of cheap e-fuels,” she explained. “That could make it very difficult for politicians to pursue consistent climate policy.”
The European Parliament and EU states had actually already agreed in October that only emission-free new cars may be registered in the EU from 2035. However, Wissing insisted that in principle all cars with combustion engines that are operated with e-fuels should be included.
Chancellor Olaf Scholz (SPD) allowed the FDP to keep the coalition peace. He welcomed the compromise on Saturday. This means that an agreement from the coalition agreement has been implemented, said Scholz. At the same time, he questioned the relevance of the exception rule.
After the agreement, the final vote of all 27 EU countries is to take place next Tuesday. According to Wissing, concrete procedural steps were fixed in a binding manner for implementation. “We want the process to be completed by fall 2024,” he said.
More: Which German branches of industry would benefit from e-fuels.