Draft for reforming the Act on Purchase and Conversion Subsidies for Low-emission Vehicles sent for comments

The Ministry of Transport and Communications requests comments on the draft government proposal for the Act on Fixed-Term Subsidies for Purchasing and Converting Vehicles to Use Alternative Fuels or Propulsion Systems (so-called Act on Purchase and Conversion Subsidies for Low-Emission Vehicles)

In the draft government proposal, it is proposed that the act be amended to correspond to the changes in the EU’s legislation on State aid. A new subsidy category for hydrogen-powered vans and trucks would also be included in the Act. At the same time, it is proposed that the regulations on purchase subsidies for fully electronic cars and conversion subsidies for passenger cars be repealed as the application period for them ended on 31 December 2022. The proposed amendments would also affect the title of the Act.    

Purchase subsidies for gas-powered vans and trucks would in future be granted on the basis of a different EU regulation

The draft government proposal proposes amendments to the criteria for granting purchase subsidies for electric and gas-powered vehicles in such a way that they would correspond to the amendments in the EU’s legislation on State aid. According to the draft government proposal, purchase subsidies for electric vans and trucks would in future be granted on the basis of a different EU act on State aid than the purchase subsidy for gas-powered vans and trucks. 

Some of the subsidies for gas-powered vans and trucks could in future be granted as de minimis aid based on the so-called De Minimis Regulation. Because of the current limitations in the De Minimis Regulation, the purchase subsidy for gas-powered vans and trucks would according to the draft government proposal not be granted to companies offering road freight transport services. However, the purchase subsidy for gas-powered vans and trucks could be granted in situations where the actual road freight transport would be only one part of the service. For example, this would apply to removal, postal and courier services and waste collection and processing services. 

As the current De Minimis Regulation is in force until 31 December 2023, the Commission is expected to publish amendments to the Regulation. The Commission’s latest draft version of the De Minimis Regulation, which is also the second one in the order, was published in June. Based on the June draft version, unlike currently, the subsidy could also be granted to those carrying out road freight transport for the purchase of vehicles used for road freight transport, such as gas-powered vans and trucks. The draft Regulation published by the Commission in June does not necessarily correspond to the content of the final Regulation. The national subsidy scheme will be reassessed once the final amendments to regulations have been published. 

Support is also proposed for hydrogen-powered vans and trucks

It is proposed that purchase subsidies for hydrogen-powered vans and trucks be added to the Act. The proposal is based on Parliament's statement according to which functional and effective means of guidance for promoting hydrogen as one of the transport fuels will be sought. The aim of the proposed new subsidy category is to promote the use of hydrogen in transport and thereby promote the national production of clean hydrogen and further use of hydrogen. 
 
According to Petteri Orpo’s Government Programme, Finland aims at a 10-per-cent share of the production of clean hydrogen in the EU and at least at the same share of further use of hydrogen. The purchase subsidies for hydrogen-powered vans and trucks are aimed at reducing the purchase costs of hydrogen-powered vans and trucks to make it possible for more buyers of vehicles than currently to purchase the vehicles in question. 

Hydrogen-powered vans and lorries could be supported within the framework of the 2023 budget decisions, so introducing a new subsidy would not increase central government expenditure. 

Next steps

Comments can be submitted until 9 August 2023. Comments may be submitted by all organisations and private individuals at www.lausuntopalvelu.fi. After the consultation round, the preparation of the legislative amendment will continue as official duties.

The proposal is linked to the Government's second supplementary budget proposal for 2023 and is due to be discussed alongside it.

The amendments would enter into force on 1 January 2024. The Act would be applied to the purchase subsidy for vans and trucks, for which the application deadline is 21 December 2024. 

Inquiries:

Emmi Simonen, Senior Specialist, tel. +358 295 342108, [email protected]