Companies are urging the German Government to extend fuel cell tax exemptions to hydrogen internal combustion engine (ICE) vehicles for fairer treatment.
Under the EU energy tax directive, hydrogen is currently treated differently as a road fuel based on its use. Hydrogen fuel cells are exempt from energy tax, while hydrogen engines are currently charged €0.9/kg ($0.98/kg), which will rise to €1.25/kg ($1.36/kg) in 2027.
In a letter to the German Government, companies including Daimler Truck, Volvo, TEAL Mobility and Bosch, have called for the exemptions to be granted to hydrogen ICE vehicles.
They argue that the tax disparity distorts competition and hinders hydrogen ICE development, claiming that many hydrogen refuelling stations refuse to serve engine-powered vehicles due to the tax uncertainties.
Hydrogen ICEs operate similarly to conventional petrol or diesel engines, but instead burn hydrogen, mixing it with air, compressing it and igniting it. While hydrogen ICEs do not emit any CO2 emissions, they do produce small volumes of NOx, which does contribute to air pollution.
Despite this, the companies say hydrogen ICEs should be treated like other clean mobility solutions that benefit from tax relief – especially while the technology is still in its early stages.
By extending the tax exemption, the companies say adoption of hydrogen-powered transport could be accelerated, while also improving the EU’s manufacturing competitiveness.
The signatories urge the German Government to implement the exemptions on hydrogen ICEs and inform the European Commission to ensure fair treatments across technologies.
“The positive momentum of hydrogen engines extends beyond the technology itself. Hydrogen engines can significantly accelerate the use of hydrogen in transport and provide a positive boost to the hydrogen economy,” the letter states.
Hydrogen ICEs have been gaining traction in recent years, with proponents suggesting the technology will be cheaper to make and buy than fuel cell alternatives.
H2 View has also been previously told by developers that despite NOx emissions, that the engines would still meet any legal emissions requirements in the years to come.
