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5th Mar 2024

End company-car perks, says EU commission

  • One of the reasons traffic in Brussels is often congested, is because the Belgian government has made it tax-friendly to have a company car (Photo: Peter Teffer)

EU member states should phase out tax breaks for company cars to help improve air quality, the European Commission said in a report published on Monday (6 February).

It also said the use of diesel cars should be discouraged.

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Only five of 28 member states manage to stay under EU air pollution limits and report air quality “to be generally good with some exceptions”.

The rest have too high particulate matter concentrations or too high nitrogen dioxide (NO2) levels, the commission said in the first Environmental Implementation Review.

Both particulate matter and nitrogen dioxide are toxic pollutants which can damage human health and the environment.

“Measures to achieve NO2 compliance have to target diesel vehicles in particular e.g. by introducing progressively stringent low emission zones in inner city areas or by phasing out preferential tax treatment,” the report said.

Several cities across the continent have already banned older types of diesel cars from central areas.

The commission also commented on countries that give tax advantages that promote the use of cars.

“Specific environmentally harmful subsidies, such as preferential tax treatment for certain fuels and tax advantages for privately used company cars, which impede progress in tackling traffic congestion and air pollution are still in place in many countries and need to be phased out,” the report said.

The commission has no power over taxation, which is the remit of national governments. But member states have failed to meet air pollution limits for years.

Monday's review showed that air quality rules are not the only ones where implementation on the ground has proved challenging.

It said “the main challenges and most pressing implementation gaps across member states are found in the policy fields of waste management, nature and biodiversity, air quality, noise and water quality and management”.

The commission announced it would discuss with member states how they could better implement the rules.

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