Germany has finally put forward plans for a new CO2-linked ownership tax.

The tax system features a scale of charges dependent on average CO2 emissions, but the government is also proposing to introduce a two-year, tax-free scheme for the most environmentally-friendly cars.

"We want to introduce an automobile tax exemption for cars that are particularly clean," environment minister Sigmar Gabriel told ARD public television.

The scheme needs to be approved by Germany's 16 states, but news reports over the weekend suggested that there is some considerable unease over the proposal, because the states themselves would lose out financially. One newspaper estimated the tax break would cost EUR2bn during 2009, when the tax is expected to be introduced.

Environmental groups have attacked the proposal because they say the criteria for the tax exemption are too lax. According to Deutsche Welle, they would include most new cars, not just low-CO2 cars.

Vehicle manufacturers have welcomed the plan. VDA president Matthias Wissmann said in a statement that the tax break would provide a boost to sales and help stabilise the economy.