Lower taxes for diesel cost Germany up to seven billion euros in 2019

The lower taxation of diesel fuel in Germany cost the country billions of euros in 2019, newspaper Rheinische Post reports. In response to a parliamentary inquiry from the Green Party, the finance ministry (BMF) reported that the treasury "technically speaking" could have earned 5.9 billion euros more between January and September last year if diesel taxes were as high as taxes for other types of fuel. Since the government's answer only covers the first nine months of 2019, the Green Party estimates the total figure for 2019 at about 7.1 billion euros. The Greens' budget expert, Sven-Christian Kindler, told the newspaper that subsidies like the tax privilege for diesel fuel mean that "we will never ever reach the climate goals." All sorts of climate-damaging subsidies in transport need to be stopped, Kindler said. "Nobody understands why diesel fuel is supported with taxpayers' money and why kerosene still is not taxed at all." According to the BMF's answer, the lack of a kerosene tax cost the state about 580 million euros in 2019.

The German government has said in the past that it did not consider the lower taxation of diesel a subsidy that supports diesel sales, calling the rebate "a general burden balance." Researchers have argued that ending the taxation model would help lower emissions. However, in the context of its climate package, the government has instead opted for tying the taxation level directly to the CO2 emissions of a vehicle, rather than to the fuel type used.