CO2 emission taxation: How to make it effective?
In the road transport industry, oil is not a regular but a premium strategic energy. It can even be considered as “black gold”. In fact road transport has no economically viable alternative to oil.
Despite the fact that 85% of transport by road is below 150km, a distance where other modes of transport cannot provide the same door to door service, numerous countries impose excessive and unjustified excise duties and taxes on diesel fuel. Indeed, its price at the pump represents more than four times the OPEC crude oil price !
This clearly underlines that while every country has a fiscal policy on transport fuel, almost none has an effective energy policy. Any energy policy requires at least improved energy and oil efficiency measures, based on energy savings and on diversification of the energy used in fixed installations, where viable alternatives to oil exist, through efficient taxation and incentives. This should be coupled with a moderate and balanced fiscal policy where no viable alternatives to oil exist, such as in commercial road transport.
Interview with IRU Secretary General Martin Marmy
(online streaming file)
In the current globalisation of the economy, road transport is not only a transport mode, but is above all a vital production tool to ensure competitiveness in the sustainable economic and trade development of each country.
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Continuous diesel supply for road transport with moderate taxation is a prerequisite to enable each country to meet the economic, social and environmental objectives of Agenda 21 and the UN millennium goals.
The reinforcement of environmental regulations represents a major global challenge. However, taking into account the massive taxation of diesel fuel, the right to emit CO2 – as foreseen by the Kyoto protocol – is more a new profitable fiscal business than an effective measure to reduce pollution. To make CO2 taxation really effective in reducing CO2 emissions, taking into account that the oil market is global, and that CO2 emissions are a global challenge, the CO2 tax should be collected in the oil producing countries, at the source, where each barrel of oil is produced and not, as is the case, in the oil consuming countries where diesel fuel is already heavily taxed. This would permit the investment into cleaner fuel and the effective diversification of energy use.
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Position on Road Transport and Oil  |
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IRU Position on the Effectiveness of CO2 emission taxation |
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