German tax laws actually encourage companies to offer thirsty performance vehicles such as this 405kW Porsche Cayenne S as employee perks.

Environmental campaigners have taken aim at famous German car brands such as Porsche, Audi and BMW, criticising their high CO2 emissions as well as Germany's tax system, which they say promotes gas-guzzlers.

A symbol of industrial might exported all over the world, Germany's sports vehicles and 4x4s also enjoy huge domestic popularity due to what one campaigner derided as an “absurd” tax incentive scheme.

Patrick Huth of pressure group Deutsche Umwelthilfe (German Environmental Aid or DUH) said: “Germany has the most absurd policy in the world of incentivising polluting cars.”

Two-thirds of cars sold in Germany are registered to companies, although this percentage rises to 80 percent for the swankier models. Companies can offset for tax purposes the entire price of the car and petrol without any fixed limit on carbon emissions, as there exists in other countries such as Ireland or France.


The more expensive the model, the greater the fiscal incentive for companies and in a country where cars are often seen as a status symbol, firms offer employees luxury vehicles to attract talent.

Sigrid Totz from NGO Greenpeace complained: “Companies order heavy vehicles with high fuel consumption because image is more important to them than the fight against climate change.

“This tax law ensures the German auto industry has a domestic market for its premium brands.”

The DUH group has calculated that the tax regime on cars owned by individuals is also one of the least strict in terms of carbon emissions in Europe.

And Huth criticised Germany's famously speed limit-free motorways, “the only case in the industrialised world” as an “incentive to buy souped-up vehicles.”

Statistics appear to back up the campaigners' argument.

Germany routinely finds itself bottom of the class when it comes to the CO2 emissions of new cars sold in the country.

Over the first seven months of 2012, cars sold in Denmark and Portugal spewed out on average less than 120 grammes of CO2 per kilometre travelled while in Germany, this was over 140 grammes, according to manufacturers' data.

Nevertheless, said Matthias Wissmann of the VDA association which represents the Germany auto industry, the top companies were striving to improve the situation.

“Since 2006, the German brands have cut their average fuel consumption by 20 percent, thanks mainly to billions of euros invested in improving engine efficiency,” Wissmann said.


And Ferdinand Dudenhoeffer, an expert from the Centre for Automotive Research at the University of Duisburg-Essen, said environmentalists should not necessarily point the finger at the top brands.

“Premium German carmakers have made more progress than lower range manufacturers,” he said, adding that many top-of-the-range vehicles have similar emissions to less modern and less expensive cars.

German manufacturers “have invested enormously in technology and have no problem respecting the CO2 emission limits in Europe,” he added.


Customers in Germany do however tend to be suckers for power, with a trend for ever bigger engines, a study conducted by Dudenhoeffer in August showed.

In the first seven months of 2012, the average power of the engines of new cars sold in Germany stood at 102kW, up from a previous record of 99kW seen in 2011 and 96kW in 2010.

Nevertheless, “more power does not automatically translate into higher fuel consumption,” given new generation fuel-saving technology, Dudenhoeffer wrote as a conclusion to that study.

He did, however, acknowledge that Germany had a lot of catching up to do in the area of hybrid vehicles. Over the first 10 months of the year, Toyota held 75 percent of this market in Germany, ahead of French group Peugeot-Citroen. For Huth, this too can be put down to the “near-absence of tax incentives” to develop greener cars in Germany. - AFP