Road Finance

Fearing Discrimination Against Other E.U. Drivers, Europe Warns Germany Against Auto Highway Tolls

Could Germany's planned toll penalize German diesel car owners? Source: DPA
Could Germany's planned toll penalize German diesel car owners?
  • Why it matters

    Why it matters

    Germany is one of the few European nations without auto highway tolls. A new government plan would target only foreign drivers, raising E.U. fairness concerns.

  • Facts

    Facts

    • Germans strongly support expanding highway tolls to foreigner drivers, but few want to only single them out.
    • Many details still need to be worked out including how tolls would be levied on diesel- and gasoline-powered cars.
    • Fears are rising that the bureaucratic costs of collection might negate income from the tolls.
  • Audio

    Audio

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As debate rages in Berlin’s political circles about the government’s controversial plan to charge non-German drivers for using the nation’s roadways, the European Commission is raising new concerns about potential discrimination against diesel car owners.

What, exactly, does Brussels need to know in order to effectively evaluate the proposal? How will the Commission determine if the toll violates the European Union’s anti-discrimination laws? Opinions within the E.U.’s executive body are as divided as its actions. For example, the Commission’s legal service is seeking far more information from the German government than E.U. Transport Commissioner Siim Kallas considers necessary.

A source familiar with the E.U. concerns told Handelsblatt that Commission lawyers have put together a catalog of questions for Berlin to determine if the road tax planned by Alexander Dobrindt, Germany’s minister of transport, is a form of covert discrimination.

“It involves very difficult points of detail,” the source said. “The whole concept could be shot to pieces.”

Mr. Dobrindt proposes an infrastructure fee on all roads for vehicles with a total weight of 3.5 tons beginning in 2016. He would exempt German drivers because they already pay a motor vehicle tax.

Germany is one of the few European nations without a national toll for cars. Virtually all of its neighbors – Austria, the Czech Republic, France, Poland and Switzerland – charge all drivers, foreign and domestic, to use their roadways. But Berlin’s proposal varies by targeting only non-German drivers.

A poll conducted by the German automobile club ADAC found that only 8 percent of respondents favored a road tax on all drivers, but 52 percent support tolls for foreign drivers.

But if Brussels warns of putting foreigners at a disadvantage, where does the discrimination begin? Could some German drivers also be unfairly penalized?

The cost of an annual tax sticker for German cars is determined by the classifications under the country’s motor vehicle tax law. Owners of diesel-powered cars pay a comparatively higher fee than those with gasoline vehicles under German law, but since more diesel vehicles are on the streets and roads of Germany than outside it, German owners would, on average, still be paying more of a road fee than foreigners. The E.U.’s legal service argues this could even be seen as discriminatory against German nationals in favor of visiting foreigners.

The E.U.’s legal service argues the German toll plan could even be seen as a discrimination against German nationals with diesel cars in favor of visiting foreigners.

The lawyers also are bothered by the price scaling of the German proposal. The cost for an annual sticker for foreigners paid for on the Internet would be assessed differently for each vehicle, according to year of registration, engine size, environmental criteria and type of motor. A vehicle with a large diesel engine would cost more than a less powerful gasoline-powered compact car. But foreign owners of compact cars and larger diesels would each pay the assessed €10 ($13.40) or €20 ($26.81) for a two-month sticker. Here, the lawyers suspect, the ratio is dubious because the compact is put at a disadvantage to the bigger diesel engines.

Mr. Kallas, the EU transport commissioner,  apparently wants to prevent such petty discussions. Taking all the objections into consideration would complicate the law and likely create a great deal of bureaucracy. This would diminish the cost-benefit calculation and could result in the toll proposal being scrapped entirely, even though Mr. Kallas supports using the German road tax to close investment gaps in the country’s infrastructure.

The toll road discussions continue against the backdrop of a planned lowering of tolls for trucks within the European Union, a reform effort that will cost Germany close to €460 million ($616.6 million) in lost fees between 2015 and 2017.

But E.U. law does not require Germany to lower toll rates based on uncertain growth forecasts, said Michael Cramer, a German Green party member and chairperson of the European Parliament’s transportation and tourism committee. He said Mr. Dobrindt was once again trying to put the blame on Brussels instead of Berlin.

One thing is certain, however: the road to a new German car toll will not be a drive in the park.

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