1. Dominika Kalinowska Hartmut Kuhfeld Uwe Kunert (DIW Berlin, Germany) The diesel trend in Europe: does taxation matter ? Presentation at the COST Action 355 Meeting Berlin November 23 - 25 2005

2. 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.

3. Share of diesel passenger cars in new registrations 0 15 30 45 60 75 19901992199419961998200020022004 L A B F E I P EU 15 D GB N CH NL DK IRL FIN IS S GR Quelle: ACEA. in %

4. 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 DKNIRLNLMPFINGBBIHASLOSDFGRPLECHCYLSKCZLVLTEST 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).

5. 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 NDKIRLNLPCYMGRFINSBGBHSLODIAFECHPLSKLVCZLLTEST 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).

6. 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 AFEDPIGRIRLNL 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).

7. Annualized duties – comparison for petrol vs. diesel passenger car

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

10. 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 microdata from relevant travel surveys (not part of todays presentation) - what stands out?

11. Share of diesel passenger cars in new registrations 0 15 30 45 60 75 19901992199419961998200020022004 L A B F E I P EU 15 D GB N CH NL DK IRL FIN IS S GR Quelle: ACEA. in %

12. 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

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

14. 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

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

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

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

18. Fuel price differences between petrol and diesel

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

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

21. 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

22. 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 Frances diesel-trend be seen as pathbreaking? and can advanced methodological analysis clear the picture?

23. 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 Frances diesel-trend be seen as pathbreaking? and can advanced methodological analysis clear the picture?