Changes to application periods in the purchase subsidy scheme for low-emission vehicles

On 8 December 2022, the Government proposed that the President of the Republic approve the amendments, which have been passed by Parliament, to the Act on Purchase and Conversion Subsidies for Low-emission Vehicles. The President of the Republic is to approve the bill on 9 December 2022.

The application period for the purchase subsidy for electric and gas-fuelled vans and trucks would be extended until the end of 2024, as the Government has allocated additional financing for this scheme. Under the current Act, the application period for the purchase subsidy would end no later than 31 December 2022 for vans and 31 March 2023 for trucks.

In contrast, the application periods would be shortened by three months for the purchase subsidy for fully electric cars, i.e. battery electric vehicles (BEVs), and the conversion subsidy for passenger cars, as the Government has not allocated an appropriation for these schemes for 2023. The application periods would close on 31 December 2022.

The period of validity of the Act would be extended until 31 December 2026.

Any purchase subsidies applied for under the previous Act on Purchase and Conversion Subsidies for Low-emission Vehicles (971/2017) would be processed in accordance with the provisions of that Act.

The new act is included in the budget proposal for 2023. The Government proposes EUR 1.5 million in financing for purchasing electric and gas-fuelled vans and EUR 1 million for purchasing electric and gas-fuelled trucks in 2023.

Financing for the van and truck purchase subsidy scheme

The amended purchase and conversion subsidy scheme would target especially heavy goods vehicles and vans. Closing the subsidy scheme for BEVs is thought to have only minor impact on their demand.

Since 2018, the state has granted subsidies for purchasing electric and gas-fuelled vehicles and converting cars to run on natural gas or ethanol. So far, Parliament has made decisions on appropriations totalling EUR 48 million.

In addition, the budget proposal for 2023 includes EUR 2.5 million in financing for purchase subsidies for electric and gas-fuelled vans and trucks. If these proposals are approved, EUR 50.5 million will have been allocated in appropriations for purchase and conversion subsidies between 2018 and 2023. Parliament will make the final allocation decisions.

Additional financing for BEV purchases and conversions in the 2022 supplementary budget

According to Traficom, the Finnish Transport and Communications Agency, all budgeted purchase subsidies for BEVs and conversion subsidies for cars had been spent by last autumn. In the fourth supplementary budget for 2022, an additional appropriation was allocated to purchasing BEVs and converting vehicles to use alternative fuels or propulsion systems. The additional net financing was approximately EUR 1.5 million. Traficom's website has information on the amounts available through the schemes.

Purchase subsidies aim to renew the vehicle stock to reduce emissions

The purchase subsidy schemes are designed to renew the vehicle stock to reduce greenhouse gas emissions from transport. The current Act on Fixed-Term Subsidies for Purchasing and Converting Vehicles to Use Alternative Fuels or Propulsion Systems entered into force on 1 January 2022.

The purchase and conversion subsidies for low-emission vehicles are part of the Roadmap for Fossil-free Transport which the Government adopted in May 2021. The Roadmap aims to halve emissions from transport by 2030 compared to the level in 2005 and to achieve zero emissions by 2045.

What's next?

The President of the Republic is to approve the bill on 9 December 2022. The act amending the Act on Fixed-Term Subsidies for Purchasing and Converting Vehicles to Use Alternative Fuels or Propulsion Systems will enter into force on 12 December 2022.

Inquiries:

Emmi Simonen, Senior Specialist, tel. +358 50 300 6148, [email protected]

Pinja Oksanen, Senior Specialist, tel. +358 46 921 2693, [email protected]