Revisions to purchase and conversion subsidies for vehicles – consultation starts

The draft government proposal for an act concerning purchase and conversion subsidies for low-emission vehicles has been sent out for comments. The Ministry of Transport and Communications requests comments by 10 October 2021.

According to the proposal, the subsidies for battery electric vehicles and gas-powered trucks and the conversion subsidy will continue as from 2022. The new forms of support would be a purchase subsidy for electric and gas-powered vans and a purchase subsidy for electric trucks. The subsidies would speed up the transition into low-emission, electric and gas-powered vehicles, which would reduce greenhouse gas emissions from transport.

The new subsidies, together with the purchase and conversion subsidies we already have, are part of the Roadmap for Fossil-free Transport adopted by the Government in May 2021. The Roadmap for Fossil-free Transport aims to halve emissions from transport by 2030 compared to the level in 2005.

The new subsidy schemes would be adopted for a fixed term on 1 January 2022. The schemes would be applicable in 2022-2025.

Subsidies for purchasing electric and gas-powered vehicles

The draft proposal contains four types of subsidies:

1) New purchase subsidy for electric and gas-powered vans

EUR 2,000, EUR 4,000 or EUR 6,000 in support could be granted for purchasing an electric van, depending on the size of the vehicle. The subsidy for a gas-powered van would be EUR 2,000. Both private persons and companies would be eligible.

2) New purchase subsidy for electric trucks and continuation and raising of the present purchase subsidy for gas-powered trucks

EUR 8,000-50,000 in support could be granted for purchasing an electric truck, depending on the size of the vehicle, EUR 7,500 for purchasing a truck using pressurised gas and EUR 15,000 for a truck using liquefied gas. Both private persons and companies would be eligible.

3) Continuation of the present purchase subsidy for battery electric vehicles

EUR 2,000 in support could be granted for purchasing a battery electric vehicle whose total costs do not exceed EUR 50,000. Private persons would be eligible.

4) Continuation of the present conversion subsidies for converting petrol-powered vehicles to run on gas or ethanol

EUR 200 in support could be granted when converting a vehicle to run on ethanol and EUR 1,000 to run on gas.

Purchase subsidies speed up technological transition

The energy efficiency and power source of cars play a key role in reducing greenhouse gas emissions from transport. The aim is to speed up the technological transition so that the share of zero-emission and low-emission cars out of new passenger cars sold increases from the current approximately 20% to as close as possible to 100% by 2030. Subsidies are needed for as long as the purchase prices of electric and gas-powered vehicles are higher than those of combustion engine vehicles.

The majority of passenger cars, vans and trucks still run on diesel or petrol. For example, in 2020 the combined share of electric cars and plug-in hybrids of all passenger cars was 1.6%. This year, however, the sales of battery electric cars have grown fast and new models keep coming to the market. In other vehicle categories the range of vehicles powered by alternative propulsion systems is also developing fast. Passenger cars account for approximately 54 per cent and vans and trucks for approximately 41 per cent of emissions from domestic transport.

Stakeholder event on 7 October 2021: How are the purchase and conversion subsidies for vehicles being revised?

The Ministry of Transport and Communications will organise a stakeholder event on the reforms on 7 October 2021 at 9.00-10.30. The purpose of the event is to present the draft government proposal and hear the views of different stakeholders. Stakeholder and media representatives should register for the event by 6 October at 10.00 at: https://link.webropolsurveys.com/S/A5236B26A38BFC87.

What's next?

The deadline for comments on the draft proposal is 10 October 2021. Organisations and private individuals are invited to comment online at www.lausuntopalvelu.fi or by email to [email protected].

The act is to enter into force on 1 January 2022 and remain in force until 31 December 2026. The schemes would be applicable in 2022-2025. The responsible authority in granting the subsidies is the Finnish Transport and Communications Agency Traficom.

In the Budget for 2022, the Government proposes EUR 6 million in funding for the purchase and conversion subsidies.

Inquiries:

Maria Hyvönen, Senior Specialist, tel. +358 295 342 090, maria.hyvonen(at)gov.fi

Päivi Antikainen, Director of Unit, tel. +358 50 382 7101, paivi.antikainen(at)gov.fi