Introduction and key policy recommendations

This chapter provides the context and motivation for the analysis of how tax revenue from transport fuels could evolve over time as vehicles rely less on fossil fuels. Based on simulations for the Republic of Slovenia, the report provides an in-depth assessment of the taxation of road transport and suggests how tax policy could adapt to declining fossil fuel use in the long term. The chapter also provides the main results from the analysis and specific policy recommendations. The analysis shows that tax revenues from fossil fuels used in private cars may decline substantially in the coming decades. Gradual tax reforms, with an evolving mix of taxes, shifting from taxes on fuel to taxes on distances driven, could contribute to more sustainable tax policy over the long term.