Purchase and conversion subsidies to cover hydrogen-powered vans and trucks

On 5 October 2023, the Government submitted a proposal to Parliament for an act amending the Act on Fixed-Term Subsidies for Purchasing and Converting Vehicles to Use Alternative Fuels or Propulsion Systems.

The Act would be applied to the purchase subsidy for vans and trucks, for which the application deadline is 31 December 2024. The Government does not propose any new appropriations for the subsidies. The final decisions will be made by Parliament.

The Act would include a new subsidy category for hydrogen-powered vans and trucks. According to the government proposal, the Act is to be amended to comply with the changes in the EU legislation on state aid. At the same time, it is proposed that the regulations on purchase subsidies for fully electric cars and conversion subsidies for passenger cars be repealed as the application period for them has ended. The proposed amendments would also affect the title of the Act.

Changes would not affect government expenditure

According to the Programme of Prime Minister Petteri Orpo’s Government, 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. Hydrogen-powered vehicles would be included in the vehicle purchase subsidy programme, i.e. support would be available for hydrogen-powered vans and trucks too. The subsidies are aimed at reducing the purchase costs of hydrogen-powered vans and trucks to make them more affordable and so available for more buyers than currently. Support for hydrogen-powered vans and trucks would be based on the 2023 budget decisions, so introducing a new subsidy would not increase central government expenditure.

The legislation on purchase and conversion subsidies should be reformed to meet the changes made in the Commission’s General Block Exemption Regulation on state aid. The changes in the Regulation do not allow support for the purchase of gas-powered vans or trucks. So 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 subsidies for gas-powered vans and trucks. 

Some of the subsidies for gas-powered vans and trucks can be granted as de minimis aid based on the so-called de minimis Regulation.
According to the proposal, the purchase subsidy for gas-powered vans and trucks would not be granted to businesses for road freight transport services. This is due to the limitations in the current de minimis Regulation in force. 

As the current de minimis Regulation will remain in force until 31 December 2023, the Commission is expected to publish amendments to the Regulation. Based on the June draft version by the Commission, the subsidy could, unlike at present, be granted to road freight transport businesses 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. Once the new de minimis Regulation has been published, the national purchase and conversion subsidy programme will be reviewed.  On 15 August 2023, the Transport and Communications Agency Traficom launched a project for reviewing the Act.  

Next steps

A referral debate on the government proposal submitted to Parliament will be conducted in a Parliament plenary session. Information on the date of the session will be available on the Parliament website.

After the debate, the proposal will be referred to a committee. The committee will draft a report, which will then be discussed in a plenary session.

The legislative amendments are intended to 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 31 December 2024.

Inquiries:

Emmi Simonen, Senior Specialist, tel. +358 295 342 108, emmi.simonen(at)gov.fi