Dominika KalinowskaHartmut KuhfeldUwe Kunert(DIW Berlin, Germany)

The diesel trend in Europe:does taxation matter ?

Presentation at the COST Action 355 Meeting BerlinNovember 23 - 25 2005

Outline

- Tax systems and assessment basis in cross EU comparison – evidence for significant differences.

- Comparing petrol and diesel passenger cars – do existing differences in tax charges have any detectable impact.

- Focusing on France and Germany – what factors might influence observable preferences in aggregate passenger car purchase and ownership behaviour.

Share of diesel passenger cars in new registrations

0

15

30

45

60

75

1990 1992 1994 1996 1998 2000 2002 2004

LABFEI PEU 15DGBNCHNLDKIRLFINISSGR

Quelle: ACEA.

in %

Fiscal duties charged on passenger cars – EU comparison

Untere Mittelklasse - VW Golf 1.4 - Ottomotor

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

DK N IRL NL M P FIN GB B I H A SLO S D F GR PL E CH CY L SK CZ LV LT EST

Euro / Jahr

Umsatzsteuer Mineralöl

Mineralölabgaben

Versicherungsabgaben

Kfz-Steuer

Umsatzsteuer Kauf

Zulassungsabgaben

Annahmen: 15 000 km, Verbrauch 6,8 l/100 km.Quellen: ACEA; ADAC; IRF; BMF; Europäische Kommission; Berechnungen des DIW Berlin (Stand: August 2005).

Total annualized duties charged – EU comparison for diesel car

Untere Mittelklasse - VW Golf 2.0 SDI - Dieselmotor

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

N DK IRL NL P CY M GR FIN S B GB H SLO D I A F E CH PL SK LV CZ L LT EST

Euro / Jahr

USt Mineralöl

Mineralölsteuer

Versicherungssteuer

Kfz-Steuer

USt Kauf

Zulassungsabgaben

Annahmen: 15 000 km, Verbrauch 5,3 l/100 km.Quellen: ACEA; ADAC; IRF; Europäische Kommission; Berechnungen des DIW Berlin (Stand: August 2005).

Total annualized duties charged – comparison for petrol vs. diesel car

Untere Mittelklasse - VW Golf

0

500

1 000

1 500

2 000

2 500

3 000

A F E D P I GR IRL NL

Euro / Jahr

Golf Basis 1.4 - Ottomotor Golf 2.0 SDI - Diesel

Annahmen: 15 000 km, Verbrauch 6,8 bzw. 5,3 l/100 km.Quellen: ACEA; ADAC; IRF; Europäische Kommission; Berechnungen des DIW Berlin (Stand: August 2005).

Annualized duties – comparison for petrol vs. diesel passenger car

VW Golf 1.4 - Ottomotor vs. VW Golf 2.0 SDI - Dieselmotor

0%

25%

50%

75%

100%

125%

150%

175%

200%

225%

A B CH CY CZ D DK E EST F FIN GB GR H I IRL L LT LV M N NL P PL S SKSLO

Diesel : Otto 10 Tsd. km 15 Tsd. km 20 Tsd. km

Annahmen: Verbrauch 6,8 l/100 km Ottomotor; 5,3 l/100 km Dieselmotor.Quellen: ACEA; ADAC; IRF; Europäische Kommission; Berechnungen des DIW Berlin (Stand: August 2005).

Annualized duties – comparison for petrol vs. diesel passenger car

BMW 730i - Ottomotor vs. BMW 730d - Dieselmotor

0%

25%

50%

75%

100%

A B CH CY CZ D DK E EST F FIN GB GR H I IRL L LT LV M N NL P PL S SKSLO

Diesel : Otto 10 Tsd. km 15 Tsd. km 20 Tsd. km

Annahmen: Verbrauch 10,6 l/100 km Ottomotor; 8,5 l/100 km Dieselmotor.Quellen: ACEA; ADAC; IRF; Europäische Kommission; Berechnungen des DIW Berlin (Stand: März 2005).

Share of diesel passenger cars in overall car fleet and new registrations

0 15 30 45 60

GR

S

IS

FIN

IRL

DK

NL

CH

N

GB

D

EU15

P

I

E

F

B

A

L

Bestand (2000-2005)

Neuzulassungen (2004)

Quellen: ACEA, Eurostat, andere.

in %

Focusing on France and Germany

Looking closer at France and Germany – background of the comparison:

- country specific tendencies within newly registered passenger cars from the EU comparison

- STSM of the COST 355 hosted by INRETS-DEST under the supervision of Laurent Hivert and supported by the rest of the DEST research team coordinated by Christophe Rizet

- direct comparison of data sources and exchange of research results

- concentration on analysis of research results based on micro data from relevant travel surveys (not part of today‘s presentation)

- what stands out?

Share of diesel passenger cars in new registrations

0

15

30

45

60

75

1990 1992 1994 1996 1998 2000 2002 2004

LABFEI PEU 15DGBNCHNLDKIRLFINISSGR

Quelle: ACEA.

in %

Similarities and differences – F and G

Parallels and dissimilarities in the purchase and ownership of passenger cars – is there any evidence for comparability of behavioural patterns:

- new registrations and fleets of passenger cars

- observable trends from time series

- analogue developments in the two neighbour countries

Share of diesel passenger cars in overall car fleets and new registrations – comparison France and Germany, 1990-2004 –

0%

10%

20%

30%

40%

50%

60%

70%

1990 1995 2000 2004

In % der jeweiligen Pkw insgesamt

Bestand Diesel in D

Bestand Diesel in F

Neuzulassungen Diesel in D

Neuzulassungen Diesel in F

Quellen: DAEI - SES; Fichier central des automobiles (FCA); KBA; Berechnungen des DIW Berlin.

Passenger car fleets in France and Germany

Potential explanations for apparent purchasing trends of passenger cars:

- significance of engine-type specific differences in fiscal duties charged on passenger cars

- fuel price evolution of petrol vs. diesel – the fiscal component

- additional aspects – efficiency effects and supply side reaction from the automobile industry

Total annualized duties – comparison for a diesel car in NL, G, F, CH

Untere Mittelklasse - VW Golf 2.0 SDI - Dieselmotor

0

500

1 000

1 500

2 000

2 500

NL D F CH

Euro / Jahr

USt auf Mineralöl

Mineralölabgaben

Versicherungsabgaben

Kfz-Steuer

USt Kauf

Zulassungsabgaben

Annahmen: 15 000 km, Verbrauch 5,3 l/100 km.Quellen: ACEA; ADAC; IRF; Europäische Kommission; Berechnungen des DIW Berlin (Stand: August 2005).

Fuel price evolution for petrol and diesel – France, 1980-2004

0,25

0,50

0,75

1,00

1,25

1980 1985 1990 1995 2000 2004

Reale Preise in Euro je Liter

Tankstellenpreis VK (bis 1989 verbleit)

Tankstellenpreis DK

Steuern VK (bis 1989 verbleit)

Steuern DK

Quellen: Union francaise des Industries Petrolieres; Französisches Finanzministerium; MEI der OECD.

Fuel price evolution for petrol and diesel – Germany, 1980-2004

0,25

0,50

0,75

1,00

1,25

1980 1985 1990 1995 2000 2004

Reale Preisein Euro je Liter

Tankstellenpreis VK

Tankstellenpreis DK

Steuern VK (bis 1985 verbleit)

Steuern DK

Quelle: Verkehr in Zahlen; MEI der OECD.

Fuel price differences between petrol and diesel

-0,1

0,0

0,1

0,2

0,3

12'92 12'93 12'94 12'95 12'96 12'97 12'98 12'99 12'00 12'01 12'02 12'03 12'04

NL

FIN

B

DK

L

D

S

F

I

A

E

CH

GB

in Euro je Liter

Fiscal duties charged on fuels – France and Germany 1980-2004

0,30

0,40

0,50

0,60

0,70

1980 1985 1990 1995 2000 2004

Reale Preisein Euro je Liter

Benzin in F Benzin in D Diesel in F Diesel in D

Quellen: Union francaise des Industries Petrolieres, Französisches Finanzministerium; Verkehr in Zahlen; MEI der OECD.

Fuel price developements and new passenger car registrations– France, 1990-2004 –

0,30

0,50

0,70

0,90

1,10

1990 1995 2000 2004

Reale Preisein Euro je Liter

25%

35%

45%

55%

65%

TankstellenpreisNormalbenzin Tankstellenpreis Diesel

Anteil neuzugelassener Diesel-Pkw Anteil neuzugelassener Benzin-Pkw

Anteil umgeschriebener Diesel-Pkw

Quellen: Fichier central des automobiles (FCA), Union francaise des Industries Petrolieres, Französisches Finanzministerium, Berechnungen des DIW Berlin.

Concluding remarks

- for 14 of 17 countries studied clear positioning of diesel-share in relation to taxation can be observed

- fuel duties contribute strongest to relative advantage of diesel cars - structure of the petroleum tax favours in many cases the diesel fuel and

provides as a result for lower per-km cost

- what potential consequences has the fiscal promotion of diesel fuel – the „rebound effect“

- producers‘ response to the „diesel-trend“ – the automobile industry has widened their product range

- promotion of diesel cars for CO2 reduction targets

Concluding Remarks

- for more than a decade F has been dominating within the EU with its diesel car shares in new registrations as well as in the overall national passsenger car fleet evolution

- the consistently existing relative fiscal cost advantage of diesel vehicles supported by their fuel efficiency allowed the French car users to shift their preferences towards this particular engine segment over a fairly long time period – supply side adjustments from the car manufacturers side followed contributing positively to the evolving diesel passenger car demand

- since beginning of the 90s diesel cars have been evolving also in G into an economically attractive automobility alternative – rising shares of newly registered diesel cars clearly indicate this tendency

- where does the development in G lead – can France‘s diesel-trend be seen as pathbreaking? and can advanced methodological analysis clear the picture?

Concluding Remarks

- for more than a decade F has been dominating within the EU with its diesel car shares in new registrations as well as in the overall national passsenger car fleet evolution

- plausible explanations for the evident popularity of diesel passanger vehicles in F are the moderate annualized taxation charges on cars with diesel engine, in particular the long run favourable fiscality of diesel fuel in contrast to petrol

- the consistently existing relative price advantage of diesel vehicles supported by their fuel efficiency allowed the French car users to shift their preferences towards this particular engine segment over a fairly long time period – supply side adjustments from the car manufacturers side followed contributing positively to the evolving diesel passenger car demand

- since beginning of the 90s diesel cars evolved also in G into an economically attractive automobility alternative – rising shares of newly registered diesel cars clearly indicate this tendency for G

- where does the development in G lead – can France‘s diesel-trend be seen as pathbreaking? and can advanced methodological analysis clear the picture?