Flanders: vehicle tax reform lead to limited drop in CO2 emissions

According to a study by the Federal Planning Office, the 2012 reform of the Flemish vehicle registration tax (BIV) led to a faster but small decrease in CO2 emissions from new passenger cars in Flanders.

The additional impact of the Flemish reform of the annual circulation tax in 2016 and the premium for emission-free cars, which ran from 2016 to 2020, is even smaller.

Faster, but small decrease in CO2 emissions

The two traffic taxes were previously based solely on a car’s fiscal horsepower in all regions. But unlike Brussels and Wallonia, Flanders reformed its BIV and annual circulation taxes for passenger cars. Now, they depend on the passenger car’s CO2 emissions and Euro standards.

That reform of the BIV, a one-off tax to be paid by every owner of a new or second-hand vehicle from the moment the vehicle is put onto use on public roads in Belgium, has led to a faster but small decrease in the CO2 emissions of new cars in Flanders, according to the Planning Office: from 2012 to 2015, it involves an additional decrease of 1,53 g/km for private cars and 6,69 g/km for company cars.

A key role for cylinder capacity

This impact is modest for two reasons, says the Planning Office. “Firstly, cylinder capacity is one of the most decisive factors in a car’s CO2 emissions. However, the cylinder capacity also determines the car’s fiscal horsepower, which was already at the heart of the BIV system that existed before 2012.

In other words, even if BIV in Flanders before 2012 did not depend directly on the car’s CO2 emissions, cars with heavy emissions were taxed more heavily even then. Secondly, the share of BIV is very small compared to the purchase price of new cars.”

In turn, the reform of the annual circulation tax and the introduction of the premium for emission-free cars have had mainly a small additional impact on the CO2 emissions of new company cars.

No conclusions can be drawn here for private cars, according to the Planning Office.