German HGV tax will hit Irish hauliers and industry

Road charging on German motorways for all HGVs will come into effect on Sunday, November 2, despite huge opposition from the International Road Transport Union (IRU) and other EU road transport associations. John Loughran reports.

IRHA President Eamonn Morrissey

Traditionally Ireland has had strong trade links with Germany dating back to its entry into the old Common Market in the early 1970s. However, these links could be severely damaged, following the German Government’s decision to introduce a tax on HGVs using German motorways.

The new tax - LKW Maut - which will be levied on all HGV’s using the German motorway network, at a rate of 15 cent per kilometre, will have a huge impact on Irish hauliers and Irish exporters.

The Irish Road Haulage Association, the representative body of the licensed haulage industry like its counterparts throughout Europe is furious with the German government’s decision to proceed with the LKW Maut tax.

IRHA president Eamonn Morrissey said the tax will add between 18 and 20 per cent to hauliers costs whilst in Germany and warned industry that the haulage industry will not be able to absorb this cost. “All tolls going forward will be charged separately. Hauliers can no longer absorb these costs,” Morrissey commented.

The LKW-Maut tax will hit Irish hauliers

To coincide with the introduction of the new toll, the German Government is reducing excise duty on diesel for commercial users. German hauliers will receive financial assistance through a reduction in fuel taxes but that will be of little consolation to the hundreds of Irish hauliers that ply their trade in the heartland of the Rhine and Ruhr.

Morrissey is concerned that German hauliers will be at a cost advantage because of the associated reduction in fuel duties and has called into question the legality of the new toll. “I would be worried about any form of subsidy, which would give German hauliers an advantage. I know the IRU is also concerned about this aspect of the new system,” he explained.

The employers’ body IBEC has expressed disappointment with the German Government’s decision to introduce the charge, which it claimed was anti-trade and anti-business. IBEC’s director of transport Reg McCabe told the Irish Trucker, the new tax would be “an obstacle to free trade that will impact on Irish industry.” The tax would impose “intolerable” regulatory and administrative costs on companies trading with Germany.”

The European Commission is investigating the new German HGV tax

The scheme, which has been designed by the German government to encourage the transportation of freight by rail and inland waterways is now the subject of an investigation by the European Commission.

Following months of inactivity, the European Commission prompted by the International Road Transport Union (IRU) and numerous national road transport associations has decided to launch a formal investigation into the measures envisaged by the Germans to compensate for the effects of the toll rate on German transport operators.

The Commission is also examining whether this constitutes state aid and is also trying to establish whether the scheme infringes on the rules on the free movement of goods within the EU.

The Road Haulage Association (UK) Head of International Affairs Mike Freeman has welcomed the European’s Commission’s intervention and wants the German scheme put on ice until the EC has concluded its investigations.

“It is unbelievable that it is only at the last minute that the EC has woken up to the fact that the MAUT scheme could contravene EU rules. The only way this system will work is for the German’s to delay it until the EC investigation is completed satisfactorily.”

The LKW Maut will use state-of-the-art GPS technology whereby On Board Units (OBUs) are mounted in the cab of the vehicle relaying information to a satellite detailing the position of the vehicle and the distance it has travelled on motorways.

Introduction of the controversial new tolling system was delayed by the German Government by two months - it was due to be introduced on August 31 - following a barrage of complaints from the IRU and other national road transport associations.

The complaints centred around two key issues - the legality of the scheme and the availability of the OBUs.
The OBUs will allow trucks to pay without stopping. An internet option does exist, but it is cumbersome and impractical, according to the IRU, “requiring drivers to input in advance a mass of details, which isn’t compatible with the flexibility expected of road transport. The only other alternative available is a manual system, which would be saturated, because of the lack of OBUs.

The lack of OBUs was highlighted in the middle of July, when the Dutch road transport association said its members intending fitting 30,000 OBUs to its fleet. However only 512 OBUs had been delivered to the Netherlands by July 15.

To exasperate the situation the OBUs cannot be used without a Maut card, which provides proof of creditworthiness. Only a limited number of these cards have been distributed and only to German hauliers.

Despite the European Commission investigation, lack of OBUs and widespread opposition throughout Europe, it appears the German Government is intent on introducing the scheme on November 2.

However, the November 2 deadline is not cast in stone and a further postponement may be on the cards. Watch this space.