12.C Rationalize inefficient fossil-fuel subsidies
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Taxation should be restructured and harmful subsidies gradually reduced in order to reduce their environmental impact. It must take ‘fully into account the specific needs and conditions of developing countries and [minimise] the possible adverse impacts on their development in a manner that protects the poor and the affected communities’.

Although there are few activities that explicitly aim at eliminating environmentally damaging subsidies, there are examples that can help reduce those subsidies. For example, the Federal Environment Agency's report on environmentally harmful subsidies in Germany, which has already been updated three times since 2008, makes an important contribution to communicating the problem and its extent, raising awareness of the issue.

With the entry into force of the Second Act amending the Energy Tax and Electricity Tax Act on 1 January 2013, companies (other than small and medium-sized) can only be reimbursed up to 90% of the energy tax or electricity tax burden by means of so-called ‘peak compensation’ if they have ISO 50001 certification or have adopted an EMAS-certified energy management system. This links the subsidy to sustainability requirements.

Various business enterprises (e.g. Allianz, Commerzbank, Telekom, SAP, Tchibo) have issued internal regulations that establish a bonus system when using low-emission company cars. Here, a bonus/penalty system incentivises choosing a company car with low CO2 emissions, such as a hybrid or an electric vehicle.