Energy tax: Initiative for Natural Gas-Based Mobility recommends relief until at least 2026

Change in law would offer more incentives for energy transition in transport sector

The planned extension of energy tax relief for natural gas and biomethane fuels doesn't go far enough, according to the Initiative for Natural Gas-Based Mobility. A draft bill by the German Federal Ministry of Finance provides for an extension up to and including 2021, with a subsequent degression until 2024. In a statement, the Initiative – co-ordinated by the Deutsche Energie-Agentur (dena) – the German Energy Agency – argues for an extension up to 2026 at the earliest, with degression only in the case of particularly strong market growth.

'If we want to progress the energy transition in the transport sector, then we need to promote natural gas and biomethane,' says Andreas Kuhlmann, Chief Executive of dena. 'The present regulatory framework, however, doesn't reward the benefits of these fuels for environment and climate. A reduction of energy tax for natural gas and biomethane until at least 2026 would be an important signal for consumers and the market, and an absolute must for further investment.'

Objective: Increase natural gas share of fuel market to 4 per cent
In the Initiative's view, a mere three-year extension with subsequent degression does not offer companies a sufficient basis for planning and investment. To enable the energy tax break for natural gas and biomethane to reveal its full impact, it should be linked to the development of the market and its investment cycles. At present, the market share of natural gas and biomethane in fuel sales was a mere 0.35 per cent. From a market share of 4 per cent upwards, the market development would pay for itself, and a tax break would no longer be necessary. This target, however, probably couldn't be reached before 2026. If the market grew more quickly, the relief could be reduced when the share reached 3 per cent.

At the moment, the use of natural gas and biomethane fuels was the most cost-effective option for reducing traffic emissions. With the mixture of 20 per cent biomethane commonly used at present, natural gas vehicles release up to 35 per cent less greenhouse gases than those using petrol or diesel. Emissions of oxides of nitrogen are up to 90 per cent lower, while the noise pollution of commercial vehicles is up to 50 per cent less. In the road haulage sector, Liquefied Natural Gas (LNG) is the only competitive alternative to diesel over long distances, says the Initiative for Natural Gas-Based Mobility. A bigger sales market would reduce costs along the entire value chain, from fuel production and service station infrastructure to the vehicles themselves, thereby further improving the competitiveness of natural gas mobility.

The Initiative for Natural Gas-Based Mobility

The Initiative for Natural Gas-Based Mobility unites vehicle manufacturers, the petroleum, natural gas and biogas industries, providers of service station technology and the German Automobile Club (ADAC). Moreover, at the end of 2015 the initiative gave birth to the 'LNG Task Force', which campaigns specifically for the use of liquid natural gas in road haulage traffic. Co-ordinated by dena, the Initiative for Natural Gas-Based Mobility is under the patronage of the Federal Ministry of Transport, Building and Urban Development.

Further information on the Initiative