The German government has confirmed that a new CO2-based car ownership taxation system will be central to its climate protection plans.

According to Automobilwoche, a government committee agreed yesterday that a new CO2-based tax system should be introduced 'as soon as possible'. The new system would only apply to newly registered cars, while cars already on the road would continue to pay taxes based on engine size. Old cars will pay somewhat higher taxes than new cars.

Other transport measures in the latest plans include raising the share of bio-fuels to 20% of all road fuel by 2020. At present the figure is around 5-6%. In addition the road pricing system for trucks over 12 tonnes will reflect emissions levels and routes taken, to help avoid traffic build-up, particularly in city centres. The pricing system will be extended to more roads than is currently the case. Motorway road pricing could also be introduced for smaller trucks (over 7.5 tonnes).

Vehicle manufacturer and dealer representatives have been calling for clarification of the planned new taxation system for some time. The German vehicle manufacturers trade association, the Verband der Automobilindustrie (VDA) and the The Zentralverband Deutsches Kraftfahrzeuggewerbe (ZDK), the German association for motor trade and repair, have been blaming Germany's declining car market on consumer nervousness with regard to changes to the tax system.