Act on purchase and conversion subsidies for low-emission vehicles into force

The President of the Republic approved the act on purchase and conversion subsidies for low-emission vehicles on 22 December 2021. The act enters into force on 1 January 2022. The new subsidy schemes are adopted for a fixed term.

The current purchase subsidies for full electric passenger cars and gas-powered trucks and the conversion subsidy for passenger cars can still be applied for in 2022 and 2023. In addition, subsidies can be granted for purchasing an electric truck in 2022 and 2023 and for purchasing an electric or gas-powered van in 2022. Subsidies may be granted within the limits of the appropriation reserved for this purpose.

The aim of the purchase and conversion subsidies for vehicles is to encourage both households and companies to move away from fossil fuels to alternative fuels and propulsion systems, thus reducing greenhouse gas emissions from transport. Electric and gas vehicles purchased new will eventually enter the second-hand car market, which makes them available to more and more of people. Another aim is to reduce the purchase costs of vehicles powered by electricity or gas to make low-emission vehicles affordable to larger numbers of buyers.

The new subsidies, together with the decision to continue the current purchase and conversion subsidies, are part of the Roadmap for Fossil-free Transport adopted by the Government in May 2021. The objective of the Roadmap is to halve emissions from transport by 2030 compared to the level in 2005 and to achieve zero emissions by 2045. Passenger cars account for about 54 per cent and vans and trucks for about 41 per cent of emissions from domestic transport.

Electrification of transport is progressing fast. This year, the sales of full electric cars have been growing and new models have entered the market. Almost a third of the cars registered for the first time were full electric cars and plug-in hybrids.

Six subsidy schemes for purchasing low-emission passenger cars, vans or trucks

Based on the act, there are six types of subsidies to be applied for:

1) Continuation of the present purchase subsidy for full electric passenger cars

As at present, EUR 2,000 in support can be granted for purchasing a full electric car whose total costs do not exceed EUR 50,000. Private persons are eligible to apply for the subsidy.

2) Continuation of the present conversion subsidy for passenger cars

As at present, EUR 200 in support can be granted when converting a petrol-powered vehicle to run on ethanol and EUR 1,000 to run on gas.

3) New subsidy for purchasing an electric van

EUR 2,000, EUR 4,000 or EUR 6,000 in support can be granted for purchasing an electric van, depending on the size of the vehicle. Both private persons and companies are eligible to apply for the subsidy.

4) New subsidy for purchasing a gas-powered van

The purchase subsidy for a gas-powered van is EUR 2,000. Both private persons and companies are eligible to apply for the subsidy.

5) New subsidy for purchasing an electric truck

EUR 6,000 to 50,000 in support can be granted for purchasing an electric truck, depending on the size of the vehicle. Both private persons and companies are eligible to apply for the subsidy.

6) Continuation of the current subsidy for purchasing a gas-powered truck

EUR 2,000, 4,000 or 6,000 in support can be granted for purchasing a truck using pressurised gas and EUR 14,000 for purchasing a truck using liquefied gas. Both private persons and companies are eligible to apply for the subsidy. Currently, the subsidy for purchasing a truck using pressurised gas is EUR 5,000 and for a truck using liquefied gas EUR 12,000.

What's next?

The new act on subsidies for purchasing vehicles using alternative fuels or propulsion systems and converting a vehicle into such, payable for a fixed term, enters into force on 1 January 2022. The act will remain in force until 31 December 2024. The schemes will be applicable in 2022-2023, but applications for the subsidies must be submitted by 31 March 2023. Applications for subsidies concerning vans are to be submitted by 31 December 2022.

Subsidies granted by Finnish Transport and Communications Agency

The authority responsible for granting the subsidies is the Finnish Transport and Communications Agency Traficom. The subsidy for a full electric passenger car can be applied for after the vehicle has been purchased. Applicants for the subsidy for purchasing a van or truck should submit their applications to the Finnish Transport and Communications Agency before purchasing the vehicle.

Subsidies may be granted within the limits of the appropriation reserved for this purpose.

The Budget for 2022 approved by the Parliament includes an appropriation of EUR 6 million for funding the purchase and conversion subsidies. Parliament also decided that the amount of funding reserved for the purchase subsidies in previous years that has not been used can be used in 2022 for expenditure under the new subsidy schemes.

Inquiries:

Pinja Oksanen, Senior Adviser, tel. +358 295 342 182, [email protected] (22-23 December)

Tuuli Ojala, Ministerial Adviser, tel. +358 295 342 198, [email protected] (27-31 December)