EU members must give up their sovereignty on taxation issues if they are serious about cutting greenhouse gases from cars, says the European Automobile Manufacturers Association (ACEA). A Commission proposal to harmonise tax rates on diesel, due 13 March, is also set to test EU countries' resolve.

A survey, presented by the car lobby on 12 March 2007, points to the fact that 11 EU countries have already taken steps to link their passenger car taxation to CO2 pollution, with "a significant influence on consumer behaviour and demand". 

However, it notes that the current variety of different systems fails to send the clear market signal needed to mollify increasing consumer demand for bigger, safer and more powerful cars. 

A harmonised tax system, completely based on cars' CO2 emissions, could tempt consumers to buy more environmentally friendly cars, with the potential to lower car- fleet average emissions by 5%, says ACEA. 

2005 Commission proposal for an EU-wide car tax that would be based on CO2 up to 50% has been put on the backburner because of member states' opposition to greater EU co-operation on taxation issues. 

But ACEA's spokeswoman Sigrid de Vries told EurActiv that dismissing this option purely because it touches upon the issue of taxation is "simply not good enough" if the EU wants to be a world leader on climate change. 

"It may be politically easier to target the car industry but it is not necessarily the most effective," she said, noting that measures aimed at influencing demand and behaviour "are clearly lacking". 

"All measures are needed – not only those aimed at developing new technologies…Car manufacturers have already created models that produce less than 120 grammes of CO2 per kilometre, but there is no market for them," she said, adding: "Taxes can create incentives for consumers. And, in the end, it's consumers that buy the cars." 

Green group T&E (European Federation for Transport and Environment) has also noted how useful car taxes based on CO2 can be to promote the introduction of greener vehicles. But it also accuses the auto industry of trying to shirk its responsibilities by insisting on non-technological measures. 

The Commission's new strategy on CO2 and cars, presented in February (EurActiv 07/02/07), calls on the Council to adopt its proposal on car taxation "without delay". In 2007, it should present a "thorough" impact assessment on how member states can facilitate compliance with mandatory targets through taxation. 

The agreement of all 27 member states will also be needed to pass a Commission proposal, due on 13 March, to harmonise tax rates on commercial diesel and ensure that countries no longer place higher taxes on the more CO2-friendly diesel than on petrol. The proposal aims to stamp out so-called 'fuel tourism', where trucks deviate from their routes to fill up their tanks in states where fuel is cheaper, generating more greenhouse-gas emissions.