What does sustainable mobility cost? Between environmental aspects and state financing
What does sustainable mobility cost? Between environmental aspects and state financing
Sustainable mobility is considered an essential building block on the way to achieving climate targets. The state collects considerable sums of money from the transport sector – for example through energy and vehicle taxes and other levies. But what happens when the focus is on the electrification of mobility? Which revenues will be lost and how can they be compensated for?
Table of contents
Traffic turnaround and state coffers: How the state earns from road traffic?
The mobility sector contributes a considerable amount to the national budget – both through taxes and through charges and contributions. While taxes such as energy tax and vehicle tax are not earmarked for a specific purpose and are used for the general budget to finance all government tasks, fees and contributions are used for specific purposes. The CO2 levy, for example, is such an earmarked levy and flows into the federal government’s Climate and Transformation Fund (KTF).
Energy and vehicle tax as key sources of revenue
Energy tax
Mobility is currently the largest source of income.
Revenue development:
- 2022: € 33.67 billion
- 2023: € 36.66 billion
- 2024: € 35.08 billion
Share of fuels: Around 90 % of energy tax revenue comes from petrol, diesel & co.
Vehicle tax
This is also an important financial pillar for the national budget.
Revenue development:
- 2022: € 9.50 billion
- 2023: € 9.51 billion
- 2024: € 9.66 billion
The following applies: battery electric vehicles (registered by the end of 2025) are exempt from vehicle tax until 2030 and do not generate any revenue for the state coffers.
Electricity tax
Electricity tax from the mobility sector, on the other hand, only makes up a comparatively small proportion.
It must be taken into account here that some of the electricity used for electromobility is subject to special regulations (e.g. exemption via Section 9 StromStG) and electricity from public grids for charging only accounts for part of the revenue from electricity tax.
The resulting funding gap due to the elimination of large sums from energy and vehicle tax cannot be closed with this.
Taxes such as energy tax and vehicle tax are classic budget revenues without earmarking. They therefore finance state tasks such as education, health or security.
Tax revenues from the mobility sector are facing a potential slump – which raises the question of how the state can finance important areas in view of tight budgets if “traditional” fuel and vehicle tax sources no longer flow to the same extent.
Outlook: If there is a broad electrification of mobility (e.g. through purely electric vehicles), the revenue from the energy tax will fall noticeably. Full compensation through a higher electricity tax is hardly realistic (partly because electricity for e-mobility is partially exempt from taxation under special regulations, e.g. for decentralized self-generation and self-consumption).
Government revenue at the pump
In the following diagrams, we take a look at assumed example prices for petrol and diesel. These charts illustrate how the final price is made up of taxes and levies (e.g. energy tax, COâ‚‚ levy, VAT and the non-tax component (purchasing, refinery, transportation, profit margin).
For every liter filled up, a considerable amount flows directly into the state coffers. More than half of the end customer price for diesel and over 60% of the end customer price for Super E10 are taxes and levies.
- CO2 levy: Earmarked levy of 13.17 cents / liter (net) for petrol and 14.72 cents / liter (net) for diesel in 2025, which will flow into the “climate fund”. Among other things, this is used for funding programs and projects to support renewable energies and climate protection (including the further development of e-mobility and expansion of the charging infrastructure, although there are currently no more funding projects available at national level).
- Petroleum stockpiling levy (EBV levy): is a levy that covers the costs of the strategic oil reserves. Earmarked for oil stockpiling in the strategic oil reserve in Germany (EUR 3.56 per tonne) – 0.3 cents per liter for diesel fuel and light heating oil, 0.27 cents for petrol and 0.285 cents for jet fuel.
- Non-taxable portion: The “non-taxable portion” includes all costs for the purchase and processing of crude oil, transportation to the filling station and the trade margin (margin) of oil companies and filling station operators.
Why are e-cars (so far) so cheap to drive?
Electromobility is often considered to be particularly cost-effective to operate. In fact, the pure consumption costs per kilometer for e-vehicles are comparatively low – but this is also because the state has so far created strong incentives. These include:
Vehicle tax exemption
Battery electric vehicles registered for the first time between May 18, 2011 and December 31, 2025 are exempt from vehicle tax until the end of 2030. After that, only 50% of the actual vehicle tax will apply. No vehicle tax relief applies to plug-in hybrids.
(Former) environmental bonus
For a long time, there was a purchase premium for electric cars, which led to a strong boom.
However, this subsidy was discontinued at the end of 2023 - with visible consequences: The number of new registrations of battery electric vehicles fell by around 27%.
(Former) funding for wallboxes
Subsidies for private charging stations (especially in combination with PV systems and storage) were also available, but have already been stopped. Some subsidies are still available for this at regional level.
Company car taxation
Purely electric company cars with a gross list price of up to 70,000 euros are to receive a tax advantage - the 0.25% rule. This means that instead of the usual 1%, only a quarter of the gross list price will be used as the basis for company car taxation. An increase in the gross list price to 95,000 euros is planned for 2025.
Special depreciation
For electric company cars, a higher proportion of the procurement costs can be claimed retroactively from 01.07.204 until December 2028 through special depreciation. The regulation on special depreciation stipulates that 40% can be claimed in the first year of purchase. The percentage decreases gradually for the following years.
GHG quota trading
Via the GHG quota (greenhouse gas reduction quota), a regulatory instrument, owners of purely electric cars can "sell the CO2 they have saved". Plug-in hybrids are excluded from this system because they partly use fossil fuels. For purely electric e-vehicles, the GHG quota is an additional source of income.
In the past, electric cars were often cheaper to run because the state granted various concessions. Without these incentives, e-cars would no longer necessarily be cheaper than modern combustion engines in terms of purchase and operating costs. The latest sales figures following the abolition of the premiums and the number of new registrations underline this.
What does "clean" mobility really cost?
Transport is one of the key areas for achieving climate targets – but a comprehensive switch to climate-friendly vehicles, fuels and infrastructure is anything but free. Although electrification or the use of alternative fuels such as eFuels will reduce new emissions in the long term, at the same time the state will lose considerable tax revenue from fossil fuels. This loss must be compensated for somewhere.
Government funding programs and subsidies – for example for the purchase of electric vehicles or the expansion of charging infrastructure – cost money. In addition, the transition to low-emission mobility requires investment in network expansion, production capacities and research and development. As a result, the question arises: how can the state finance these subsidies and investments if, at the same time, large parts of the previous income from the mobility sector are lost?
Due to the necessary budget consolidation and the focus on investments in rail and transport infrastructure, funding measures have already been suspended. There are currently no funds available for measures to promote investment in renewable fuel production plants and the market ramp-up of electricity-based kerosene. However, eFuels are also part of the spectrum of “clean” mobility. So far, however, they have hardly benefited from state subsidies. This makes the market ramp-up considerably more difficult – even though they offer great potential for climate-friendly mobility in the long term. This shows that a funding policy focused purely on electromobility may fall short and that a broader openness to technology is required.
By the end of September 2024, the state budget had funded a total of 1.06 million charging points in the public and private sector (source: Statista). According to data collected by the Federal Network Agency, the number of publicly accessible charging points in Germany will increase by 23% between 2023 and 2024. It remains to be seen whether this trend will continue after the discontinuation of the project-related funding programs(to the overview of the funding programs) for publicly accessible charging points. The only concrete plan for a further expansion of the charging infrastructure is the mandatory charging point obligation for filling station operators with more than 200 locations from 2028 – but without state subsidies. This already shows how costs could shift to the detriment of companies (and ultimately consumers).
A look behind the scenes: Who is actually financing this?
With the electrification of road traffic and the decreasing consumption of fossil fuels, the state is collecting less through energy tax. In addition, there is a possible reduction in revenue from vehicle tax if more and more vehicles are tax-privileged or even exempt. Expert committees and scientists are therefore working intensively on the question of how this loss of revenue can be compensated for.
Proposals of the Scientific Advisory Board to the Federal Minister for Digital and Transport Affairs
In its report “Compensation of future revenue shortfalls for the state due to the drive turnaround in road traffic” (20.07.2022), the Council lists several options:
- Vehicle registration tax Based on models from Norway: A tax is levied as soon as a vehicle is registered, which can be based on factors such as emission values or vehicle weight.
- Other charges such as vignettes or tolls: A time-based or distance-based toll could generate revenue even if no more fuel is filled up.
- Increase the proportion of earmarked fees: Fees that are used exclusively to finance certain tasks (such as road maintenance) could be expanded.
- Electricity tax on the scale of the energy tax: If e-vehicles have a significantly higher market share in the future, an electricity tax could be designed in a similar amount to the energy tax on petrol/diesel – however, this is politically controversial and in some cases technically difficult to implement (own electricity vs. public grid).
- Increase in vehicle tax: Currently there is already a differentiation according to pollutant classes and drive types; this could be tightened further in order to increase both the steering effect and revenue.
- Challenge: If the number of registered vehicles falls significantly, the vehicle tax per vehicle would have to rise further in order to fill the state coffers.
The German Council of Economic Experts' proposal for a transport infrastructure fund
In its annual report 2024/25, published in the monthly report of the Federal Ministry of Finance, the German Council of Economic Experts advocates a transport infrastructure fund with its own revenues.
- The aim: to prevent the financing of the road and rail network from constantly becoming a bargaining chip in the federal budget.
- Long-term planning security: The fund should regularly have independent resources at its disposal, for example from truck tolls, vehicle tax or energy tax.
- Prospective expansion: As the volume of fossil fuels will fall, a car toll – preferably distance-based – could be added in the future.
- Financing options through debt: The fund could raise capital within national and EU debt limits to address road and rail modernization backlogs.
In short, both the Scientific Advisory Board and the German Council of Economic Experts agree that the current financing models will no longer be sufficient in the course of the mobility transition. New concepts such as adapted taxes, toll and fee systems or a broad-based infrastructure fund are needed to ensure that the transition to climate-friendly mobility does not become a financial risk for the state.
Whether and when such measures will be introduced, however, remains to be seen.
More cost transparency and technological diversity
Clean mobility is essential for achieving our climate targets, but it raises significant funding issues. The electrification of transportation reduces revenue from traditional sources such as energy tax, and the exemption from vehicle tax for electric vehicles does the rest. At the same time, funding programs and infrastructure measures cost a lot of money – money that could be used elsewhere in the national budget.
This results in a central challenge: how can the mobility transition be shaped in such a way that it promotes climate protection on the one hand and does not leave any unsustainable budget gaps on the other?
Investments in sustainable mobility can only be financed in the long term with fair and sustainable revenue models.
At the same time, funding must not focus one-sidedly on a single type of drive. eFuels are also relevant building blocks of a technology-open mobility transition – but currently receive hardly any financial support from the state and therefore have difficulties in reaching the mass market.
Conclusion: A genuine turnaround in transportation requires not only bold climate targets, but also a revised financing concept.
Regardless of whether the focus is on electromobility, eFuels or other climate-friendly drive systems: The future of mobility needs diverse solutions – and an economically and ecologically balanced framework that remains affordable.
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