Periodic Reporting for period 1 - VTAX (European Vehicle Taxation)
Periodo di rendicontazione: 2022-09-01 al 2024-08-31
Transport remains a challenge, it is responsible of around 30% of global energy consumption and one of the major source of global pollution. Vehicles remain the dominant source of transport emissions and are responsible for 15% of Europe’s greenhouse gas emissions. A clear paradigm shift is needed to initiate the transition from fossil fuel-based driving towards mobility based on renewable resources, in particular towards electrification of transport through mass market take-up of BEVs. There are a number of technological burdens that need to be solved first, it will take another 5-7 years before these limitations are really solved to become competitive with ICEs. Hence, the reason for this project: re-thinking of road taxation systems starting from alternative inputs, including micro-mobility and SDGs as the main driver, to identify short(er) term solutions towards the initiation of a real transition and to prepare a smart, suitable and solid taxation system. The role of taxes is important to support the transition towards a fair green mobility.
Transport taxation is a broad topic and this research is focused on vehicle taxation including all taxes connected to vehicles registration, purchase, ownership and use. This choice reflects also the new needs created by the pandemic: transport models and car industry are in crisis. Due to the crisis, a momentum is created to accelerate the shift from fossil fuel to BEV driving, including a rethinking of the vehicle taxation system.
The overall objective of VTAX is to develop the fundaments for a new Mobility Taxation System, based on SDGs and alternative modes of electrified transport. The fellowship will last 24 months and will be carried out in Universidad San Pablo CEU (Madrid, Spain) with a secondment of 4 months at the International Bureau of Fiscal Documentation (Amsterdam, The Netherlands).
Transport taxation is a broad topic and this research is focused on vehicle taxation including all taxes connected to vehicles registration, purchase, ownership and use. This choice reflects also the new needs created by the pandemic: transport models and car industry are in crisis. Due to the crisis, a momentum is created to accelerate the shift from fossil fuel to BEV driving, including a rethinking of the vehicle taxation system.
The overall objective of VTAX is to develop the fundaments for a new Mobility Taxation System, based on SDGs and alternative modes of electrified transport. The fellowship will last 24 months and will be carried out in Universidad San Pablo CEU (Madrid, Spain) with a secondment of 4 months at the International Bureau of Fiscal Documentation (Amsterdam, The Netherlands).
The VTAX research project looked at the legal architecture of vehicle taxes in the European context. The overall objective was to analyse vehicle taxes in the European Union in terms of sustainability, to understand their rationale and structure, and to provide some reform proposals to make them more sustainable.
The study of the European legal framework and policy initiatives was essential to understand the current context, the role of the EU and the challenges it faces in the transition to more sustainable mobility. Europe is responding with different actions. On the one hand, new forms of mobility, such as micromobility, are gaining ground in cities. However, the lack of a regulation that assimilates these solutions to vehicles currently precludes any impact on vehicle taxes. On the other hand, one of the key points of the European strategy for sustainable mobility is electrification. This is already having an impact on Member States' fiscal and financial systems. Electric vehicles (EV) are the most technologically advanced solution. However, they are still not affordable for everyone. For this reason, the tax system is committed to trying to create incentives for the purchase of these vehicles by consumers. Electrification affects not only incentives, but also taxation. As EVs do not produce any emissions, the criteria for taxing vehicles in the future may no longer be based on emissions. Instead, the current research proposes the criterion of use expressed in kilometres travelled, a criterion that has been known to the EU since the 1990s and that can now be implemented thanks to the development of digital tools that provide this data. At the same time, EVs also represent a major challenge. There are many environmental issues related to the production and disposal of batteries. The European legislator is starting to address the issue of the sustainability of EV batteries through a regulatory approach. However, it is not taken into account when designing national incentives to promote EV purchases, except in France, which recently reformed its "bonus écologique" to take into account CO2 emissions during battery production when calculating the amount of the subsidy.
Although mobility is a key component of Europe's environmental transition strategy towards climate neutrality, the unanimity rule in the Council on tax matters prevents the EU from playing a leading role in the field of vehicle taxation. As a result, vehicle taxes are regulated at national level and the analysis of the European experience shows that there is a high degree of inhomogeneity between national approaches. The analysis of vehicle taxes from a sustainability point of view, carried out first on the Spanish and Italian systems and then on other European countries, has been useful to understand national trends and to identify some good practices that could be implemented in other Member States. This has led to some proposals for the reform of vehicle taxation to encourage the electrification of the vehicle fleet in Spain and Italy.
This is an overview of the project results achieved:
- The realisation of an international mobility from Italy to a Spanish University to develop a research project that achieved three objectives:
1. To identify new challenges for road transport taxation towards sustainability, with 2 reports (deliverables) 1 chapter in a forthcoming book;
2. To propose an improvement of vehicle taxation through a comparative analysis in different EU countries, with 2 reports (deliverables) and 1 chapter in a forthcoming book;
3. To define the role of the EU in the mobility transition strategy with 1 report as deliverable, 1 chapter in book (https://repositorioinstitucional.ceu.es/handle/10637/14650) and 1 article published in a top-ranking scientific journal (https://repositorioinstitucional.ceu.es/handle/10637/14647).
- A well-developed transfer of knowledge and training plan, with 29 activities that not only increased the knowledge of the research topic with a multidisciplinary approach, but also improved their soft skills, in particular project coordination, organisation and management, and relationships;
- targeted and impactful dissemination and communication activities, with 18 activities, during which the fellow was able to disseminate and discuss specific aspects of the research with different audiences (children, students, policy makers, businesses, international organisations, academics) and build new relationships for future collaborations.
All training and outreach activities developed during the fellowship contributed to advancing the state of the art by analysing and discussing previously unexplored profiles, such as the role of taxation in the development of electrification, the impact of electrification on vehicle taxation, and how to design financial incentives that support the production of more sustainable electric cars.
The study of the European legal framework and policy initiatives was essential to understand the current context, the role of the EU and the challenges it faces in the transition to more sustainable mobility. Europe is responding with different actions. On the one hand, new forms of mobility, such as micromobility, are gaining ground in cities. However, the lack of a regulation that assimilates these solutions to vehicles currently precludes any impact on vehicle taxes. On the other hand, one of the key points of the European strategy for sustainable mobility is electrification. This is already having an impact on Member States' fiscal and financial systems. Electric vehicles (EV) are the most technologically advanced solution. However, they are still not affordable for everyone. For this reason, the tax system is committed to trying to create incentives for the purchase of these vehicles by consumers. Electrification affects not only incentives, but also taxation. As EVs do not produce any emissions, the criteria for taxing vehicles in the future may no longer be based on emissions. Instead, the current research proposes the criterion of use expressed in kilometres travelled, a criterion that has been known to the EU since the 1990s and that can now be implemented thanks to the development of digital tools that provide this data. At the same time, EVs also represent a major challenge. There are many environmental issues related to the production and disposal of batteries. The European legislator is starting to address the issue of the sustainability of EV batteries through a regulatory approach. However, it is not taken into account when designing national incentives to promote EV purchases, except in France, which recently reformed its "bonus écologique" to take into account CO2 emissions during battery production when calculating the amount of the subsidy.
Although mobility is a key component of Europe's environmental transition strategy towards climate neutrality, the unanimity rule in the Council on tax matters prevents the EU from playing a leading role in the field of vehicle taxation. As a result, vehicle taxes are regulated at national level and the analysis of the European experience shows that there is a high degree of inhomogeneity between national approaches. The analysis of vehicle taxes from a sustainability point of view, carried out first on the Spanish and Italian systems and then on other European countries, has been useful to understand national trends and to identify some good practices that could be implemented in other Member States. This has led to some proposals for the reform of vehicle taxation to encourage the electrification of the vehicle fleet in Spain and Italy.
This is an overview of the project results achieved:
- The realisation of an international mobility from Italy to a Spanish University to develop a research project that achieved three objectives:
1. To identify new challenges for road transport taxation towards sustainability, with 2 reports (deliverables) 1 chapter in a forthcoming book;
2. To propose an improvement of vehicle taxation through a comparative analysis in different EU countries, with 2 reports (deliverables) and 1 chapter in a forthcoming book;
3. To define the role of the EU in the mobility transition strategy with 1 report as deliverable, 1 chapter in book (https://repositorioinstitucional.ceu.es/handle/10637/14650) and 1 article published in a top-ranking scientific journal (https://repositorioinstitucional.ceu.es/handle/10637/14647).
- A well-developed transfer of knowledge and training plan, with 29 activities that not only increased the knowledge of the research topic with a multidisciplinary approach, but also improved their soft skills, in particular project coordination, organisation and management, and relationships;
- targeted and impactful dissemination and communication activities, with 18 activities, during which the fellow was able to disseminate and discuss specific aspects of the research with different audiences (children, students, policy makers, businesses, international organisations, academics) and build new relationships for future collaborations.
All training and outreach activities developed during the fellowship contributed to advancing the state of the art by analysing and discussing previously unexplored profiles, such as the role of taxation in the development of electrification, the impact of electrification on vehicle taxation, and how to design financial incentives that support the production of more sustainable electric cars.
The research carried out and the dissemination activities of the results so far have had a positive impact.
On the one hand, electrification is a topic at the centre of daily political and social debate, and this has increased society's interest in this research, including legal and fiscal aspects.
The results obtained are interesting and useful for the automotive and transport sector, but also for public authorities, as they provide concrete data on comparative law experiences and legal constraints on how to design the most effective tax incentives to integrate environmental and climate issues into vehicle taxation.
On the one hand, electrification is a topic at the centre of daily political and social debate, and this has increased society's interest in this research, including legal and fiscal aspects.
The results obtained are interesting and useful for the automotive and transport sector, but also for public authorities, as they provide concrete data on comparative law experiences and legal constraints on how to design the most effective tax incentives to integrate environmental and climate issues into vehicle taxation.