The German environment minister, Sigmar Gabriel, wants to link tax advantages for light commercial vehicles to their CO2 emissions.
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The move is not popular, according to German press reports. Gabriel said he does not want to remove the lower tax rate for commercial vehicles, but he does want to see fiscal rules brought into line with the European Union proposals. In particular he is concerned about the growth in sports utility vehicles, which are often classified as commercial vehicles for tax purposes.
European Union proposals do not currently include commercial vehicles, although it is likely they will do in the future.
The German government has been trying to link car ownership taxes to CO2 for some time. A new tax was due to come into force this year, but has now been postponed until 2010.
Last week the German cabinet approved a raft of CO2 reduction measures that were due to include the new car taxes. Instead they focus on delivering a 35% reduction in CO2 emissions by 2020, compared to 1990 levels, through improving the energy efficiency of homes and increasing tolls for trucks driving on German motorways. Germany has already managed emission cuts of some 20% relative to 1990 levels.
