Eco tax (Germany)

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The term eco-tax is used to describe a number of tax policy measures that were adopted in the “Act to Introduce Ecological Tax Reform”. In the meantime, the term mainly refers to taxes that are a burden on the consumption of energy. As part of the law, apart from the electricity tax , no new tax was introduced, but rather existing tax laws were redesigned in such a way that they have a steering effect in terms of environmental protection, on the one hand by increasing the quantity taxes on energy consumption or on environmentally harmful behavior, on the other through discounts for the use of more efficient or emission-reducing technologies. The aim was, among other things, to internalize external costs resulting from environmental damage (for example, consequential costs of global warming or damage to health from burning fossil fuels ) and thus to establish cost truth .

The concept was developed in the early 1980s by the Swiss economist Hans Christoph Binswanger ( Friends of Ecological Tax Reform ) and combines two approaches:

  • Taxation of the scarce good energy with the aim of increasing energy efficiency ,
  • Broadening the basis for financing social security.

Ecological tax reform in Germany

Basic idea

The aim of the ecological tax reform was to reduce environmentally harmful subsidies and at the same time to introduce environmentally-oriented taxes. The aim was to achieve a five-fold effect: by reducing the consumption of resources, the environment was to be spared, by lower taxation of the labor factor, more employment was to be created, by higher tax revenues, the social security systems were to be strengthened, by reducing raw material imports and import costs, dependency on resource imports and at the same time contribute to international peacekeeping. Depending on whether a broad or narrow definition of the word subsidy is used, the environmentally harmful subsidies in Germany amount to around 400 billion euros ( including external costs ) or 48 billion euros (only direct subsidies without any resulting environmental damage).

The ecological tax reform was based on the criticism that the previous tax law did not take ecological criteria into account, or only insufficiently, and unintentionally produce ecologically damaging effects. One example of this was the orientation of vehicle tax based solely on engine size. In the meantime, the motor vehicle tax is mainly based on how well the respective vehicle filters its exhaust gases. Like other economic instruments , the use of tax law for environmental protection has the advantage over regulatory measures (legal obligations) that the individual remains free in his decision, less control effort is caused and the problem of control deficits is eliminated. The “ double dividend ” hypothesis is at the forefront of an ecological tax system . This means the internalization of external effects in the form of environmental pollution on the one hand and the generation of tax revenues on the other. Taxing environmentally harmful behavior would therefore not create any additional burdens.

The income from environmental taxes is lower than the environmentally harmful subsidies granted at the same time. The aim of an ecological tax reform is therefore to correct these ecologically damaging false incentives and to internalize external costs from environmental damage. In parallel to the taxation of undesirable environmentally harmful behavior, socially desirable jobs should be taxed less.

Eco tax laws in Germany

In 2014, the share of all environmentally relevant taxes in Germany was 4.9% of all tax revenues (approx. 57 billion euros). This includes income from energy, electricity, motor vehicle, aviation and nuclear fuel taxes. Taxes and duties on capital, on the other hand, had a share of 12.4%, and on labor 63.4%. According to the EU statistical office, the German burden of environmental taxes is slightly below the European average. In 2012 it was 2.2% of GDP in Germany, while the EU average was 2.8%.

In Germany, several laws aimed at "greening tax law" have been passed since 1999.

  • With the law on entry into the ecological tax reform of March 24, 1999 ( Federal Law Gazette I p. 378 ), an electricity tax was introduced as a new consumption tax . Electricity from renewable energy sources is exempt from this, provided that the electricity is taken from networks that are fed exclusively with such energy sources. For large industrial consumers, the tax was reduced in the interests of their international competitiveness. The mineral oil tax was graded according to ecological criteria; certain uses were favored, others made more expensive, such as leaded or high-sulfur fuels. From 1999 to 2003 the tax was increased several times in steps of 6 pfennigs. Manufacturing companies are exempt from the increase in the mineral oil tax. These companies receive electricity at a 40% reduced tax rate.
  • The law for the continuation of the ecological tax reform of December 16, 1999 ( Federal Law Gazette I p. 2432 ) brought a limited mineral oil tax exemption for gas and steam turbine power plants with high efficiency and some corrections to the first law, with which undesired effects should be avoided.
  • As a third stage, the law on the further development of the ecological tax reform of December 23, 2002 ( Federal Law Gazette I p. 4602 ) was passed, which contained a further increase in the mineral oil tax - graded according to the environmental impact.

Development of tax revenues

The income from the German eco-tax flows into the general budget. There is no earmarking (e.g. for pension insurance or the promotion of renewable energies).

year Income (in million euros)
1999 4,300
2000 8,800
2001 11,800
2002 14,300
2003 18,700
2004 18,100
2005 17,800
2006 17,600
2007 17,500
2008 17,400
2009 17,500

Development of the passing on of the electricity tax to consumers 1999–2004

Electricity price development & share of electricity tax passed on to consumers

Aviation exemption

Although airplanes cause high specific environmental pollution under certain aspects, air traffic is exempt from the eco-tax. There should be three reasons for this:

  • Air traffic supposedly finances all travel costs itself.
  • The aim is to prevent a location disadvantage for German airlines.
  • International agreements must be respected.

Opponents of these tax privileges criticize a lack of causal justice in relation to the environmental pollution caused by commercial aviation and a distortion of competition in the transport market by disadvantaging the much higher tax-paying land transport, e.g. B. bus or train. As of January 1, 2011, the air transport tax will be levied on commercial passenger transport , which is limited to the total tax volume of 1 billion euros. On the other hand, according to the Federal Environment Agency, there are more than 10 billion euros in environmentally harmful subsidies through tax exemptions (eco tax, kerosene tax, sales tax on international flights).

Impact in areas near the border

In areas close to the border, drivers avoid the eco-tax by practicing fuel tourism in neighboring countries. The result is that gas stations were closed there on the German side. For this reason, it has already been discussed to introduce special regulations in border areas, but this failed. On the other hand, filling station operators across Germany live less and less from their fuel commissions: The share of sales fell from 26% in 1999 to around 20% in 2007. The shop business is now the main source of sales (from 42% in 1999 to 55.6% in 2007). Especially here, German petrol stations close to the border benefit from their location, regardless of the higher gross price for fuel, especially in the vicinity of countries with more restrictive shop opening times and on public holidays in neighboring countries, which are working days in Germany. They are also attracting business customers due to the slow, complicated and sometimes foreign-language EU VAT refund procedure abroad. Business customers who are taxable in Germany in transit traffic therefore compare - in favor of Germany - the German net price with the foreign gross price and, as a result, sometimes deliberately refuel shortly before or after the border on the German side. This often allows the remaining petrol stations near the border to add a price surcharge equal to the difference to the gross foreign price. Sample: On July 21, 2008, Shell petrol stations in Trier on Eurener Straße and on St.-Barbara-Ufer as well as in Konz on Brunostraße demanded 1.629 euros per liter of premium petrol according to the portal. However, the national average on that day was 1.492 € / l, i.e. 13.7 ct / l lower, and the average super price in Luxembourg, only 8-14 km away, was 1.37 € / l in the 29th calendar week of 2008, so 25.9 ct / l or 15.9% lower. The net price on the German side (sales tax excluded) was just as cheap as the gross price in Luxembourg: 1.369 € / l.

Constitutional review

On April 20, 2004, the first Senate of the Federal Constitutional Court determined the legality of individual exceptions to the ecological tax. Haulage companies and cold store operators lodged constitutional complaints against the regulations of the Electricity Tax Act and the Mineral Oil Tax Act and thus failed.

Problems with the German eco tax

Steering effect

In the opinion of critics, there has been a clear steering effect in the direction of the desired investments in new, environmentally compatible technologies so far only in narrowly defined sub-areas, for example in the form of increased demand for low-consumption cars. The far-reaching exemptions for energy-intensive branches of industry protect them from cost increases however, no incentive for modernization investments or new technical developments.


Another problem lies in the fact that the tax was not justified politically with its ecological steering effect, but rather that it was linked to the statutory reduction in social security contributions. In addition to general tax systematic concerns about such earmarking, the fact that the tax revenue falls as a result of the ecological tax reform if the desired effect is achieved, while the financial needs of the social insurance tends to increase and therefore cannot be covered permanently from this part of the tax revenue, speaks against this connection .


Efficiency in the sense of environmental economics is given if the additional costs for avoiding an additional unit of the pollutant (marginal avoidance costs) are exactly the same for all pollutant sources. This is only the case if the tax rate is chosen uniformly for all pollutant sources. Then shifts between two pollutant sources no longer lead to welfare gains. In the Baumol standard price approach, this is assumed to be given. A social optimum in the sense of internalizing the external effects (cf. Pigou tax , external effect ) is not aimed for. Rather, only a specific environmental goal should be achieved.

In reality, in certain cases the same substances with different uses are taxed differently. For example, the manufacturing industry and farmers and foresters enjoy tax reductions or light heating oil and diesel - in fact the same - are subject to different tax rates. This leads to the inefficiency of the eco tax.

If one considers the ecological accuracy of a tax solution (like the eco tax), it can happen that an incorrectly chosen tax rate leads to deviations from the environmental target.

Social justice

Indirect taxes can have a degressive effect, which means that the proportion of household income that people with low incomes have to spend on such taxes may be greater than that of people with high incomes. An ecological tax system is therefore sometimes seen as unjust. The degressive tax effect could be offset by a subsidy for energy purchase services, which, however, entails bureaucratic effort and reduces the desired control effect in the corresponding population group. Alternatively, people with low incomes can be subsidized regardless of their energy consumption through progressive income taxes or higher social transfers (such as unemployment benefit II ). A burden on the production factor energy and relief of the production factor labor also leads to the fact that the economic pressure to substitute jobs through the use of capital and energy is alleviated.

Ecological tax as entropy tax

Ecological tax stands for taxes on goods such as gasoline, diesel, kerosene, etc. These are energy sources whose consumption pollutes the environment. If - as with sales tax (so-called value added tax) - the possibility of input tax deduction ensures that only the end consumer of energy bears the tax burden, then the ecological tax is a tax on energy consumption. Energy consumption corresponds to an increase in entropy . With it, an energy consumer pollutes the shared environment with the community. The eco tax is therefore an “entropy tax” with which environmental pollution is taxed according to the polluter pays principle.

See also


  • Gunter Stephan, Georg Müller-Fürstenberger, Stephan Herbst: Energy, mobility and economy: the effects of an ecological tax on economy, traffic and work. Physica-Verlag, Heidelberg 2003, ISBN 3-7908-1534-9
  • Danyel Reiche , Carsten Krebs: The entry into ecological tax reform: advancement, restrictions and enforcement of an environmental issue. Lang, Frankfurt am Main 1999
  • Green tax news. News and discussion contributions on eco-social financial reform. Friends of Ecological Tax Reform (FÖS) e. V., Munich from 2001

Web links

Individual evidence

  1. ^ Holger Rogall : Economics for social scientists. Introduction to sustainable economics . Wiesbaden 2013, p. 414f.
  2. ^ Kai Schlegelmilch, The relevance of the ecological tax and financial reform for the energy transition , in: Tobias Reichmuth (Ed.), The financing of the energy transition in Switzerland. Inventory, measures, investment opportunities . Verlag Neue Zürcher Zeitung, Zurich 2014, 207–234, p. 208.
  3. Where the state gets its money from . (PDF) FÖS
  4. Eurostat (Ed.): Data for the EU Member States, Iceland and Norway (=  Taxation trends in the European Union ). Publications Office of the European Union, 2014, ISBN 978-92-79-35672-8 , ISSN  1831-8789 , doi : 10.2778 / 33696 (English, online ( Memento from May 9, 2015 in the Internet Archive ) [PDF]).
  5. Ecological tax revenue and use for pension insurance. DIHK, Finance and Taxes
  6. ↑ Development of electricity prices & transfer of electricity tax to consumers 1999-2004 . Article on the development of electricity prices based on data from the Federal Statistical Office.
  7. Definition of energy tax. ( Memento of July 21, 2011 in the Internet Archive ) BMF
  8. Aviation Traffic Club Germany .
  9. Environmentally harmful subsidies (pdf) page 38 ff. Federal Environment Agency, Germany .
  10. Sector analysis of self-service petrol stations by the Ifo Institute for Economic Research, quoted in EID Energy Information Service October 27, 2008, 22
  11. BVerfG, judgment of April 20, 2004, Az. 1 BvR 1748/99 and 905/00, BVerfGE 110, 274 - eco tax.
  12. The eco tax has slowed the increase in traffic . DIW
  13. Jürgen Grahl, Reiner Kümmel : The hole in the barrel - energy slaves, jobs and the alleviation of the pressure to grow . (PDF; 452 kB) In: Sustainable Growth: Science and Environment Interdisciplinary , 13, 2009, pp. 195–212.
  14. “This tax on 'messing up the biosphere' could also be described as 'entropy tax'. [...] Against such a form of taxation, which has long been discussed as an 'eco tax', people are still polemicized with absurd arguments. ” Peter Kafka : Time to get up . 1997
  15. Hermann Scheer : The entropy tax . In: Sun Strategy . 1998, ISBN 3-492-22135-1 , chapter 8