2023 German CO2 truck toll impact explained

For anyone operating in Germany, you will not have missed the truck toll increase starting December 1st, 2023. After months of heated debates and public discussion, the federal German government voted in favor of adding the CO2 toll component that will for the first time that adjusts toll rates based on vehicle CO2 emissions. 

This move, aimed at reducing greenhouse gas emissions and promoting alternative fuels, has sparked widespread debate due to its sudden implementation and financial implications for the transport industry.

Currently, 82.6 % of a local transport journey with an average length of 200 km occur on toll roads, making tolls a substantial factor in road transport costs. This CO2 toll will reshape the toll landscape, impacting both large and small freight forwarders and service providers.

Why are we hearing so much about this truck toll increase?

A truck toll has been in place in Germany since 2005, so this is not a new measure. The income from the toll is used to finance road infrastructure such as construction, maintenance and operation of highways. Therefore, the amount is set by a cost report that calculates costs for infrastructure, air pollution, and noise pollution for limited period of time, generally 5 years.

On the basis of costs for road maintenance and upkeep, the regular toll was raised already from the start of this year. The German federal government then passed the CO2 toll addition law in mid-October and are already implementing it on 1 December 2023.

Considering contract rates had already been negotiated and signed for, the new toll puts transport companies and freight forwarders in a bad position financially and without much runway to prepare. On top, there is also a change in how the trucks’ weight class is assigned. This what has now caused a heated debate in the news.

What is the new truck toll and who does it impact?

Starting from 1 December 2023, CO2 emission classes will be introduced as a new tariff component. From 1 July 2024, the toll obligation will also encompass smaller trucks from 3.5 tones and up. Currently, only vehicles weighing more than 7.5 tons are toll obligated. Tradesmen’s vehicles will be exempt from the toll.

The CO2 toll is heaviest on the emission classes Euro 0 to Euro 4. These are considered the least environmentally friendly vehicles and highest contributors to external costs. However, even Euro 5 trucks will have to pay a significant amount with the new toll.

The new law also modifies the assignment of the weight class for a truck. From December, it is no longer the maximum permissible total weight that counts, but the technically permissible total mass.

The effect of this could be that vehicles will fall into a higher weight class than before, and thus pay higher tolls. A number of trucks that didn't have to pay tolls before will now have to pay because of a new weight assessment. Again, adding further financial burden on forwarders and service providers. These vehicles now also need to be fitted with the correct units to record toll kilometers, and BWVL has warned there is not enough time to actually install these.

With the introduction of the CO2 toll, the total toll payment due for the most affected category will increase by 83 %. This means the current toll is almost doubled in terms of total toll obligation. Naturally, the industry has not held back discussing the situation.

Cause bankruptcies and job loss

Bundesverband Logistik & Verkehr (BLV-pro) published an open letter of warning of the expected effects of the toll increase already back in September. Many other transport and logistics associations have expressed their concerns and fears. They point out that introducing this toll now when the industry is already struggling with high inflation and low demand will put many small to medium-sized companies out of business.

Micha Lege, President of the Baden-Württemberg Freight Forwarding and Logistics Association (VSL), stated that for a medium-sized freight forwarding company, the CO2 component alone will add a cost burden of up to 20 %.

Politicians seem to think that the increased costs can be passed on to end-customers, says Daniel M. Giel, spokesman for the Transport Union, a regional transport association in North Rhine-Westphalia. Even when the cost for load kilometers can, it is not so easy for the empty kilometers, which are ca. ¼ of the toll kilometers.

A transport company owner, who is closing down his business due to the drastic toll increase, explains that most customers only pay the truck toll for the load kilometers, not the empty kilometers. This leaves the truck company footing the bill, which generally their margins do not allow for. The customer does also not have the margins to share the now more expensive cost.

Expanding, BLV states that it will cause a ripple effect for the entire industry, who will have to grapple with the effects of job loss and capacity issues. This could potentially lead to price increases affecting the broader population.

Futile in terms of climate policy

With the new truck toll, the federal government wants to use the toll to combat CO2 emissions and send a price signal which will incentivize the switch to climate neutral vehicles. For this reason emission-free trucks will be exempt from tolls until December 2025.

However, zero emissions trucks are not readily available in Germany, with only about 2500 qualifying trucks registered in 2022. It would take years to replace the 800,000 strong truck fleet in Germany.

Therefore, according to Thomas Puls, from the Digitalization & Climate Change Topic Cluster at the Institute of German Economics in Cologne, using the truck toll for climate policy will be without effect. More income will be generated indeed, but the policy is untenable.

“The toll increase will not lead to a change in emissions”, is also argued by Daniel Giel. But that it will only lead to distorted competition and double financial burden.

No state funding for investments in emission-free vehicles

So to set an effective climate policy, new alternatives to diesel trucks are needed. As zero emission trucks are significantly more expensive to purchase than diesel trucks, ca. 3–5 times more expensive, the sector is asking for more state funding to be able to invest in new truck fleets.

According to Frank Huster from DSLV, medium-sized cargo companies require state subsidies to invest in emission-free vehicles. However, these subsidies are currently unavailable.

Bavaria’s Minister of Finance Huber Aiwanger agrees: “If you really want to reduce fossil fuels in transport, you have to provide more targeted support for alternatives such as hydrogen trucks. However, the funding programs for this are specifically blocked by the federal government.”

In addition, most of the new emission-free trucks are not yet available on the market. Julian Schmelzer from maut1 GmbH points out that we would need a minimum of 2 years for the production of electric trucks that would be ordered now, considering most of these have just recently been presented on the market.

Lack of infrastructure

Related to the lack of state funding for electric vehicles, criticism has also been directed at the infrastructure for refueling or charging electric heavy-duty vehicles.

The lack of infrastructure in place means there is not a way to provide heavy long-distance trucks without enough power to complete their journey. Which also applies for logistics terminals, distribution centers and depots.

The government has promised some funding to improve the infrastructure of charging stations. However, one must also take into account that a battery for an electric truck is very large and it will take some time to charge it without proper superchargers.

Lack of rail capacity

Finally, there has been some discussion around rail capacity and willingness to shift to rail traffic. In some eyes, rail capacity is not available to handle the shift that the federal government wants.

Bavaria’s Minister of Finance Hubert Aiwanger expressed that logistics do not yet have sufficient rail capacity to shift freight transport.

However, Peter Westenberger, who represents the non-federally owned freight railways, is confident that railway would have the capacity to take on a increase in market share to reach 35 % by 2030. Today the market share is 20 %.  

Frank Huster believes the rail network's susceptibility to disruption prevents transport companies from shifting transport to rail despite higher tolls. In his opinion, price is not the only deciding factor, but other important factors are stability, flexibility, relative punctuality, and transparency which cannot be given for rail transports.

After the introduction of the CO2 toll—what’s next?

The next change is set for July 1, 2024, when vehicles with a technically permissible total mass of 3.5 tons or more will have to pay the truck toll as well. Making more vehicles toll obligated will bring on new struggles with cost management.

After hearing rumblings about further expansion of the scope of the toll to also cover country roads and in cities, we would say that this is not the last shake up. Certain states have also expressed their wish to create a state toll. Baden-Württemberg has for some years wanted to implement a toll for state roads and streets in cities.

Nothing has yet been put up for vote in either case, but something to keep in mind for future planning.

Lovisa Andersson
Logistics writer
November 21, 2023

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