The EU's five largest member states spend €42 billion a year subsidising fossil fuel-powered cars, according to a study commissioned by the environmental group Transport & Environment (T&E), while calling for more subsidies for electric vehicles.
Commercial vehicles account for around 60% of new car sales in Europe.
Italy provides €16 billion in subsidies for fossil fuel-powered company cars, followed by Germany, which provides €13.7 billion, according to the study by consultancy Environmental Resources Management (ERM) published on Monday.
France and Poland provide €6.4 billion and €6.1 billion a year respectively.
Companies offer cars as perks to employees, often with significant subsidies for benefits in kind, including compensation for consumer taxes owed and fuel allowances.
Some €15 billion in the four countries goes to subsidising SUVs, the study found. Drivers of company cars receive an average annual tax rebate of €6,800, rising to €21,600 for larger models with high pollution levels.
"It is completely illogical and unacceptable to continue to put billions of taxpayers' money into a technology that is completely at odds with the European Commission's green transition agenda," T&E's director of fleet, Steph Cornelis, told CNN.
The study comes at a time when sales of electric vehicles in Europe have declined, in part because they are more expensive than equivalent fossil-fuel-powered models and thus out of reach for many consumers.
Sales of all-electric vehicles fell 43.9% in the European Union in August, with the biggest electric car markets - Germany and France - down 68.8% and 33.1% respectively, according to industry data.
ERM's study found that financial incentives for company car drivers to switch to electric vehicles are only available in the former EU member, the United Kingdom.
European Commission President Ursula von der Leyen told the European Union's new climate chief, Wopke Hoekstra, in a September 17 letter that one of Hoekstra's priorities would be to propose how to phase out fossil fuel subsidies. I BGNES
