A new study has revealed that Germany needs a significantly higher CO2 price to halve emissions from the transport sector by 2030. The study, commissioned by environmental organization Transport & Environment (T&E), found that a price of €450 per tonne of CO2 would be required for a pure market solution. This would result in petrol costing around €2.50 per litre and diesel around €2.64 per litre. Alternatively, a package of measures could be implemented, including price increases for new cars with combustion engines. In this case, the CO2 price would only need to be moderately increased, resulting in petrol costing €1.90 per litre and diesel €1.96 per litre.
Germany introduced a CO2 price of €25 per tonne on 1 January 2021, which has already significantly reduced emissions from road transport. However, experts from the National Academy of Sciences Leopoldina and the Council for Sustainable Development (RNE) have argued that this price is not high enough to meet the Paris climate goals. The T&E study supports this view, highlighting the need for a much higher CO2 price to achieve the necessary emissions reductions.
The issue of how to reduce emissions from the transport sector is a key topic in current coalition negotiations in Germany. The Free Democratic Party (FDP) is advocating for a pure market solution through the CO2 price, while the Greens and the Social Democratic Party (SPD) prefer a package of measures. T&E is calling for the removal of tax incentives for combustion engine company cars and the introduction of a bonus-malus system for car purchases, with buyers of high-emission vehicles subsidizing those who choose electric cars.
