A planned German motorway toll is against EU law because it relies entirely on drivers from other member states, the bloc’s top court has ruled.
Germany had wanted to introduce the annual €130 (£115; $145) fee next year, but faced objections from neighbours Austria and the Netherlands.
The fee would have been charged to everyone, but German drivers would have had the amount cut from their car tax.
Germany argued it wanted to move to a “polluter pays” system.
The planned toll on both motorways and federal highways would have contributed an estimated €500m for investment in infrastructure, ministers hoped.
And yet for years German governments under Chancellor Angela Merkel have promised the new toll will not be an extra burden for local drivers.
The court’s final ruling still came as a surprise, because an initial opinion by the European Court of Justice earlier this year backed the German case, accepting that foreign drivers would not have to pay for the entire year but could buy shorter 10-day or two-month “vignettes” for less money.
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Why did the neighbours object?
The bitterest opposition came from Austria, which complained it was simply a tax on foreigners.
The Dutch were also opposed, but the Czechs decided to stay out of the case while Denmark eventually backed Berlin.
For many Austrian drivers the toll would have been inevitable as they use Germany’s autobahn system in Bavaria to commute between the Tyrol in the far west and Salzburg to the north-east.
The Dutch complained that it could cost their motorists up to €100m a year, mainly from residents and companies living in areas adjacent to the German border.
Austria has its own vignette system for drivers, with costs varying from €9.20 for 10 days and €89.20 for a year, but the toll does not discriminate between nationalities.
What the EU court said
The ECJ ruled that the toll “constitutes indirect discrimination on the grounds of nationality” as it was designed to be entirely offset by drivers in other member states.
It ruled that the measures were at risk of restricting free movement of goods and services and placed the economic burden solely on foreign drivers.
It agreed that countries could charge users in other countries. But it did not accept the German argument that giving German motorists who paid the toll relief on their vehicle tax meant that the government was moving to a user-pays system.
Austria praised the ruling, with motoring groups saying the German idea contradicted the European idea. However, it was not all smiles in Austria as Vienna-based company Kapsch TrafficCom had been awarded the contract to collect the toll with a German company.