Swedish Govt Extends Tax Incentives for NGVs

This April, the Swedish Government proclaimed a triannual extension of an existing incentive for cars powered by alternative fuels. Energy Minister Anna-Karin Hatt announced the government’s decision, which will prolong the reduced tax benefit until the end of 2016, applicable for company cars powered by environmentally friendly drives, such as Natural Gas Vehicles (NGVs), plug-in hybrids or electrics.

The benefit offers car buyers 40% reduced rate of taxation, lowering the cost of new NGVs to the same level as those of petrol- and diesel-powered vehicles. This measure will indirectly also benefit the private car market as companies usually renew their fleet vehicles every three years. Furthermore, the initiative is expected to subsequently lead to the build-up of more vehicle gas filling stations and an even increased biomethane production in the Scandinavian country, although the biomethane share already amounts to 60% of the total methane used in Swedish NGVs. For detailed information on the Swedish NGV market situation and development please refer to the Swedish Success Story.

“It is very positive that Anna-Karin Hatt and the government are now giving a clear signal indicating what will apply to company cars over the next three years. Sales of natural gas vehicles can now pick up speed again. This development is good not only for drivers of company car but also for the climate and air quality in our cities,” says Anders Mathiasson, CEO of NGVA Europe member Energigas Sverige, the Swedish Gas Association.

The decision by the Swedish authorities goes in line with similar recent initiatives on national and EU-level, favouring methane powered vehicles and providing stimulus for companies to intensify investments in the build-up of a comprehensive vehicle gas filling stations network, which for many years remained the bottleneck for a substantial market penetration of NGVs.

Newly introduced funding availabilities such as e.g. the Clean Power for Transport (CPT) package and the MARCO POLO programme represent a clear sign, showing political decision makers have recognised the enormous benefits of using NG/biomethane as the immediate alternative to conventionally fuelled technologies, which helps to significantly reduce GHG emissions, noise and improve air quality.

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Source: NGVA Europe, May 3, 2013