INTERVIEW

Each of these options comes with its own set of challenges . For instance , Government tolls can only apply to specific roads , not the entire road network .

When considering new tax measures , several key questions arise : Can governments truly replace lost revenue ? Will they affect the total cost of EV ownership ? Are they easy to implement ? Are they fair for everyone ? Do they support broader goals like reducing emissions , cutting congestion and promoting public transportation ?

WHAT CHALLENGES DO YOU ENVISION IMPLEMENTING RUC ? So far , road usage charges have checked most boxes , but how do governments sell this idea to the public ? For years , taxes have funded road construction . With the introduction of road usage charges , people might feel they are paying again for something they ’ ve already funded . How do you explain this , especially when drivers have been encouraged to switch to EVs for the greater good ?

Some governments are already feeling the pinch of reduced fuel tax revenues and are testing new strategies , such as the Icelandic approach , to fill the fiscal gap .

THE ICELANDIC APPROACH Iceland ’ s current road financing system relies heavily on excise duties on oil and gasoline . Still , the model needs

UK Government ’ s forecast tax receipts drop in 2026-27

to be more effective due to the increasing adoption of electric and hybrid vehicles . To address this , Iceland introduced a new per-kilometre charge in early 2024 for electric , plug-in hybrid and hydrogen-fueled passenger or courier vehicles .

The charge will be set at US $ 0.04 ( 6 ISK ) per kilometre for electric and hydrogen cars and US $ 0,01 ( 2 ISK ) per kilometre for plug-in hybrids . By 2025 , the aim is to apply a per-kilometre charge to all vehicles , fully replacing the existing oil and gasoline fees with a system that is equitable , transparent and independent of energy sources .

34 November 2024