Despite a higher C02 content, diesel is less taxed than petrol, contributing to a lower diesel price in Germany compared to other OECD countries. Also, many exemptions are targeted to energy intensive sectors and sectors exposed to international competition. For example, the eco tax is not applied to energy intensive industries and is refunded to export manufacturing firms under a peak equalization scheme which guarantees a refund of 90% of eco tax payments exceeding the relief on social contributions. Such tax exemptions aim at limiting the negative impact of the tax on firms' competitiveness. While concerns about international competitiveness are legitimate, the risk of competitiveness losses in some exempted enterprises is likely to be overstated (OECD, 201 If, Thone etal.,