Europe’s addiction to fossil fuels

EU states as well Great Britain, Norway and Switzerland subsidise fossil fuels with at least 137 billion euros annually, as research from Investigate Europe shows. Germany is the biggest contributor with fossil fuels subsidies of at least 37 billion euros annually.

When Investigate Europe looked into why Europe’s leaders sabotage their own climate protection policy, they “came across an almost inextricable tangle of historically grown dependencies, political opportunism and a fundamental misconstruction of European legislation.”

While Europe is supposedly trying to achieve an energy transition with hundreds of billions of euros pumped into the Green Deal, all European member states are also maintaining their fossil fuel sectors with fiscal regulations and tax advantages.

In the German case, for example, financial policy spokesperson for the SPD parliamentary group in the Bundestag acknowledged that diesel (among a number of other fossil fuel types) “still enjoys a tax advantage. This should be questioned: Does the diesel really have to be so attractive for long-distance drivers? I don’t think so”. In an interview with Investigate Europe he said he would “immediately abolish the diesel privilege.” He says the problem is that there is no majority for this in German Bundestag.

“Everyone here is biased”, he says. “Most people drive a diesel (car).” High on the list of problematic practices here is the German tax breaks on company cars, with which a number of EU states promote car sales. This apparently costs the German treasury another 3.1 billion euros a year.

In Germany, the Tagesspiegel reported that a senior official from the federal government described the situation as being “perverse”. The minister did not want to be named because he said his minister won’t face critical questions on the subject. “We’re trying to tax CO2 emissions, and part of the incentive is offset by these exemptions,” he said. He extrapolated that this is “an expression of the political forces and the beneficiaries are like drug addicts on a needle. They have factored it into their operational calculations.”

When challenged on the subvention situation, united industrial associations of all EU countries, primarily the steel, chemical and cement manufacturers, repeatedly complain about their threatened competitiveness. As the German chief lobbyist for the industries concerned, Jörg Rothermel maintains, if they had to pay for the emissions they cause, “this would only lead to production disappearing and taking place elsewhere.”

One might argue that those unwilling to change will be more easily usurped by those who have more quickly embraced the inevitable transition with more sustainable solutions, and here Tesla’s success is probably a prime example. In the meantime, leading managers in the automotive industry are having to face up to the challenges of the transport transition – albeit with a big push following the uncovering of their own diesel scandals. Recently, Volkswagen Group boss Herbert Diess demanded that “the mineral oil tax should be rededicated to a CO2 tax.”

investigate-europe.eu (in English), tagesspiegel.de (in German)