Tag Archive: European subsidies

  1. EU bicycle subsidies in 2024: growth in some countries and cuts in others amid political uncertainty

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    Source: ECF

    While bicycle purchase incentives continue to expand in some European countries, political and financial instability is leading others to scale back or eliminate their programs.

    Spain has introduced new subsidy schemes aimed at increasing bicycle use, whereas France has abruptly ended its support due to budget cuts. Meanwhile, Poland’s planned national program has been put on hold due to funding challenges.

    Expansion of bicycle subsidies in Spain

    In September 2024, Spanish Prime Minister Pedro Sánchez announced a €20 million subsidy program for electric bicycles, benefiting both individuals and businesses. An additional €20 million will be allocated to public bike-sharing systems, with the goal of expanding access and reducing costs. Sánchez emphasized that the initiative aims “to increase the modal share of cycling in daily commuting and to have more bikes in more cities, for more people.”

    Support for cycling incentives in Spain extends beyond the national government. The Madrid region, for example, has introduced a targeted subsidy program specifically for elderly citizens and small and medium-sized enterprises. Notably, the national and regional governments are led by opposing political parties, highlighting that cycling promotion can transcend political divisions.

    France ends bicycle subsidies amid budget cuts

    In contrast, France has opted to discontinue its bicycle subsidy programs. A government decree issued in late November 2024 announced that all state-funded bicycle purchase incentives would be withdrawn by February 2025, despite previous commitments extending support until 2027. The decision follows political turmoil and urgent budgetary restrictions.

    Cycling advocates have strongly criticized the move, warning of its negative impact on both the industry and vulnerable users. Thibault Quéré, Director of the French Federation of Bicycle Users (FUB), describes the decision: “This is a blow to a dynamic that was well underway and had found its audience. All the more so as the subsidies targeted the most vulnerable households and the range of bicycles was adapted and advantageous for people with disabilities. ”

    Poland’s plans on hold due to funding challenges

    Poland had also planned to launch a national electric bicycle subsidy program from 2025 to 2029, with a total budget of PLN 300 million (approximately €70 million). However, the initiative was put on hold in the autumn of 2024 after the European Investment Bank declined to finance it through the Modernisation Fund, citing energy efficiency investment priorities. Advocates hope that alternative funding sources will be identified to enable the program’s implementation.

    Future prospects for bicycle subsidies in the EU

    Despite setbacks in some countries, bicycle purchase incentives remain a crucial tool for promoting cycling as a sustainable alternative to car travel. Electric and cargo bicycles, in particular, have been recognized for their potential to replace car trips, facilitate urban mobility, and make cycling more accessible to a broader demographic, including older adults and families.

    Looking ahead, the drafting of national plans under the EU Social Climate Fund in early 2025 presents an opportunity for member states to allocate funding for bicycle purchase and leasing programs, particularly for vulnerable transport users. As the debate over sustainable transport policies continues, the future of bicycle subsidies in Europe remains uncertain, shaped by both political decisions and economic constraints.

  2. Fossil fuel subsidies for company cars cost EU taxpayers €42 billion every year according to new study

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    Source: Transport and Environment

    The new European Commission has pledged to eliminate fossil fuel subsidies and ensure a fair green transition. Now, it must fulfil this commitment, says clean transport advocacy group Transport & Environment (T&E).

    In a recent report, T&E highlights that subsidies for petrol and diesel company cars cost EU taxpayers €42 billion annually. The study by ERM, commissioned by T&E, examined the impact of four key tax benefits provided to company cars: benefit-in-kind, depreciation write-offs, VAT deductions, and fuel cards. Unlike private car owners, company car drivers benefit from these subsidies, with company cars representing 60% of new car registrations in Europe.

    Italy leads the list of countries heavily subsidizing polluting company cars, followed by Germany, France, and Poland, with annual costs of €16 billion, €13.7 billion, €6.4 billion, and €6.1 billion respectively. Most of these subsidies arise from benefit-in-kind schemes that continue to favor petrol and diesel vehicles.

    In contrast, the UK and Spain provide significantly lower tax advantages for polluting company cars. The UK imposes high benefit-in-kind rates on petrol and diesel company vehicles, which encourages a switch to electric cars, now accounting for 21.5% of company registrations. In Spain, tax benefits for company cars mirror those for private cars, with minimal incentives for EVs, resulting in a lower uptake of electric vehicles among companies at 3.7%.

    The report also reveals that SUV drivers of company cars receive high fossil fuel subsidies, paying up to €8,900 less in taxes annually than private SUV owners. Consequently, companies register twice as many SUVs as private households, with €15 billion of the total subsidies directed toward SUVs.

    Stef Cornelis, Director of T&E’s electric fleets program, criticized the situation, stating that billions of taxpayer euros fund tax benefits for company drivers of high-pollution SUVs, calling it “bad climate policy and socially unfair.” Cornelis urged the European Commission to take swift action, as countries like the UK and Belgium have begun phasing out benefits for polluting vehicles, while major European markets continue to support them.

    With corporate fossil fuel vehicle subsidies hindering the EU’s green transition, T&E advocates for immediate policy changes. They call on the new European Commission to introduce a Greening Corporate Fleets Regulation in 2025 with binding electrification targets for large corporate fleets and leasing firms. This step aligns with the EU Clean Industrial Deal, which aims to create a lead market for clean technology, stimulating demand for EVs and ensuring investment stability for key industries.

    President von der Leyen has reaffirmed her dedication to the Green Deal and tasked her Commissioner candidates to eliminate fossil fuel subsidies. Stef Cornelis concluded that under von der Leyen’s renewed leadership, the Commission should set electrification targets for company fleets and correct this tax discrepancy, supporting the EU’s industrial agenda and boosting the clean tech and e-mobility sectors.

  3. Austria launches folding e-bike funding plus tighter e-scooter regulations in Vienna

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    Austrian policy developments across the light electric mobility experience

    Source: SAZ Bike, TheMayor.eu

    Electric drive folding bikes are now included, for the first time, in a subsidy initiated by the Ministry of Climate Protection, in cooperation with the sports retail trade. Private individuals, companies, clubs and communities may now benefit from funding up to 600 Euros (450 Euros via the Ministry of Climate Protection and 150 Euros from the sports retail trade) towards folding electric or non-electric bikes, plus one bicycle service. Live since March 1 of this year, the initiative aims to make cycling more attractive to a wider group of riders, especially where folding e-bikes are more adaptable to multi-modal and public transportation. Indeed, for private individuals to be eligible for the subsidy, they need to show possession of an annual ticket for public transit. The folding bike itself must also be under 110 x 80 x 40cm folded.

    Austria has seen further regulatory developments this month in the form of an announced overhaul of e-scooter regulations in Vienna. The main change will see the city set up 200 designated parking spaces for electric scooters, making it impossible to end your ride unless you park in an official space. The move is intended to better control pavement parking, and parking spaces will be situated on the road, next to WienMobil bike stations. Sites can park 8 to 10 scooters and there will be a parking ban with a radius of 100 metres around them. Outside of these stations, riders are instructed to park between cars.

    Vienna already enacted a 500 scooter cap in its central zone and a 1,500 cap in districts 2 through 9 and 20, and in the future intends to designate red zones around hospitals, markets and other hotspots, where scooters will not work and parking violations will be enforced.

  4. Portugal becomes the first EU country to reduce VAT on bicycle purchases

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    Source: Cycling Industry News, S. Cox

    The European Cyclists’ Federation has reported that Portugal has inscribed an amendment to the 2023 state budget, reducing VAT on bicycle sales.

    The stated goal of increasing cycling modal share to 10% by 2030 is the driving force for the move, resulting in customers being able to save hundreds of Euros when purchasing bicycles.

    This comes 1 year after the EU passed legislation enabling member states to apply reduced VAT rates on the supply, rental, and repair of bicycles, including e-bikes, with Portugal becoming the first country to make use of this possibility.

    Portuguese consumers will now be able to buy bicycles at the lowest VAT rate of 6% starting from 1 January 2023. The savings potential is important: for the purchase of an e-bike costing €2,000 under the current standard VAT rate, consumers would save almost €300 (under the assumption that manufacturers and outlets fully pass on the reduction).

    The amendment to the 2023 state budget was justified specifically with the goal that is inscribed in the Portuguese national cycling strategy of reaching a cycling modal share of 4% by 2025 and 10% by 2030. The explanatory text states: “Such an ambition, essential for the protection of the environment, the reduction of fossil fuel consumption, people’s health and economy and the quality of life in and around cities, naturally requires measures that stimulate the paradigm shift from car to bicycle.”

    In parallel to the introduction of the reduced VAT rate, the Portuguese Parliament also approved the continuation of the incentive scheme for low-emission vehicles, including conventional, electric, and cargo bikes, in 2023. This means that consumers will be able to benefit both from the reduced VAT rate and the purchase incentive. The only downturn? Funding for the incentive scheme has always been much lower than actual demand during the last years.

    On December 7th 2021 the Council of the EU revealed a “modernised” VAT directive that considered the rates applicable across a range of goods. As a result, consumers across the EU benefited from a reduction on the price of their bicycles and electric bikes thanks to a significant piece of policy reform trimming the VAT to be paid.

  5. Ireland announces increase in Cargo Bike support under Bike to Work scheme

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    Source: Gov.ie

    Minister for Transport Eamon Ryan has welcomed the decision to include a new higher limit for Cargo Bikes in the revised Bike to Work Scheme announced this month as part of the Finance Bill.

    The updated scheme sees a subsidy increase to €3,000 for Cargo Bikes – in recognition of their higher initial cost. Previously the available limit was linked to that available for bicycles (€1,250) and electric-assist bicycles (€1,500). Therefore, support for Cargo Bike purchases has now been doubled.

    Minister Ryan shared, “This increase will help make cargo bikes more affordable for those choosing to purchase a new bike under the bike-to-work scheme. Cargo bikes have become more popular in recent years with many people using them to bring their kids to school, for shopping and for work purposes as delivery vehicles. The cost factor, however, is an impediment to many people who may want to buy one. We hope that by increasing the limits for cargo bikes, more people will be able to choose them as a more sustainable way to get around.

    “We also need to see our courier and delivery companies moving at a faster pace from vans and trucks to cargo bikes and we are looking at ways of supporting this transformation, specifically for the last mile element of their deliveries.

    “The coming years will see a re-allocation of road space away from private vehicles towards public transport and space for people walking and cycling and cargo bikes will play a large part in how we use our roads. I look forward to seeing many more cargo bikes on our roads over the coming years, helped by this decision today to make them more affordable.”

    The Bike to Work Scheme aims to encourage the public to cycle to and from work. The initiative allows employees to give part of their salary for a bicycle and/or safety equipment, which should be used primarily for travelling to and from work. The purchase is not taxable benefit-in-kind and can be made in any shop.

  6. The French government provides large e-bike subsidies for lower-income households

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    Source: Fietsberaad Crow

    With the goal of boosting bicycle usage from 3% to 9% by 2024, the French government has launched a subsidy scheme for the purchase of e-bikes.

    The highest subsidy amount is available to those with a low income, who can trade in their old diesel car (from before 2011) or petrol car (from before 2006) and gain support in purchasing an electric bicycle instead.

    This allows individuals to receive up to 40% off the purchase price to a maximum of 3000 euros. Those who live or work in environmental zones can benefit from additional aid of up to 1000 euros. In total, it is possible to receive a total conversion bonus of 4000 euros.

    For those with higher incomes, the maximum reimbursement is 1500 euros.
    Anyone who has nothing to trade in may also qualify for a subsidy. 

    Of course, subsidising e-bike purchases is not a wholly new concept. The scheme is more or less mimicking that in Lithuania, where one could receive a subsidy of 1000 euros when returning an old vehicle, an amount that could be used for the purchase of a bicycle or a public transport card.

  7. Flemish subsidy for ‘zero-emission-vehicles’ to be discontinued

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    The newly appointed Flemish government has decided to discontinue a subsidy scheme for so called ‘zero-emission-vehicles’. If you still want to make use of this arrangement, be sure to order a vehicle ultimately on 31th of December 2019. Registering/applying for the subsidy is still possible, if you have an invoice, up to 31th of October 2020.

    This subsidy scheme is available for electric mopeds class b (including electric three- and four wheeled vehicles), electric motorcycles and electric vehicles category M1/N1. Vehicles that are not eligible for the scheme are e-bikes, speed pedelecs and electric light moped (class A).

    The subsidies are only available for private persons, non-profits organisations, carsharing systems and license holders of taxi services. For additional information about the subsidy scheme, go to the Flemish governemental website (Dutch).

    Photo credits: Zero motorcycles