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EVs to represent 90% of total sales in Nordic region by 2050

30 January 2013

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‘Nordic Energy Technology Perspectives,’ released by the International Energy Agency (IEA) describes how the Nordic countries can meet their national climate targets and achieve a carbon-neutral energy system by 2050. Emissions from transport must fall by nearly 90% from current levels with nine in ten new light vehicles in 2050 being pure electric or hybrid.
The first regional technology study by the International Energy Agency, ‘Nordic Energy Technology Perspectives’, outlines the opportunities and challenges for the five Nordic countries of Denmark, Finland, Iceland, Norway and Sweden in reaching their ambitious goals towards decarbonising their energy systems by 2050. In order to become carbon-neutral by 2050, the Nordic region will have to go through big changes in the energy sector, including a ten-fold increase in wind generation, an end to all use of coal and significant electrification of transport.

Transport sector will see the biggest changes

The emissions within the transport sector will have to drop by nearly 90%, from 80MtCO2 in 2010 to some 10 MtCO2 in 2050, which is the most dramatic drop of all end-use sectors. Electric cars will play a key role in reducing CO2 emissions and dependency on liquid fuels within individual passenger transport in the longer term.

To achieve carbon neutrality by 2050, 30% of new car sales have to be battery electric vehicles (BEV) or hybrids by 2030 and this share has to increase to 90% by 2050.

Current status and EV policies

The sales figures for EVs have so far been rather moderate in most Nordic countries except for Norway where EVs made up 5% of total sales of passenger cars in September 2012. Exemption from VAT, import duty and registration fees, free parking and charging in public parking spots as well as the possibility to drive in bus lanes are seen as the main motivators for consumers to purchase an EV in Norway. With the strong political support for EVs and the new climate agreement, EV owners will enjoy tax advantages until 2017, up to a cap of 50,000 vehicles.

Despite much lower EV sales than in Norway, other countries in the Nordic region have put in place policies, which may change the market in the years to come:
  • Denmark: EVs are exempt from registration tax and annual circulation tax until 2015. Funds are provided to support investments in recharging stations for EVs and to promote the infrastructure for hydrogen cars.
  • Finland: EVs pay the minimum rate (5%) of the CO2-based registration tax and as of 2013 EVs are exempt from the annual circulation tax, which normally amounts to $26 - $772 (€20 – 572).
  • Sweden: EVs with an energy consumption of 37 kilowatt hours (kWh) per 100 km or less and hybrid vehicles with CO2 emissions of 120 g/km or less are exempt from the annual circulation tax for the first five years. For electric and plug-in hybrid vehicles, the taxable value of a company car under personal income tax is reduced by 40%, compared with the corresponding or comparable gasoline or diesel car. On 1 January 2012, the “super-green car premium” of USD 5,970 (around €4,400) was introduced for the purchase of all new cars with CO2 emissions of maximum 50 g/km.
  • Iceland: EVs are exempt from import duties and as of June 2012, also from 25.5% VAT on the first $47,000 (around €34,000) of the price of an EV.

Nordic Energy Technology Perspectives

The study ‘Nordic Energy Technology Perspectives’ is a spin-off project of the IEA flagship technology publication ‘Energy Technology Perspectives’. By listing the best ways for the region to reduce emissions, the new report offers important lessons for other countries for energy policies that would limit average global temperature increase to 2°C.

The IEA co-developed the regional edition with leading research institutes from all five Nordic countries as well as the Nordic Energy Research, an intergovernmental organisation under the Nordic Council of Ministers that supports regional sustainable energy research cooperation.



Comments

Gisli Gislason

Northern Lights Energy
Correction regarding Iceland:
There are no import taxes on EVs in Iceland and EVs are exempt from 25.5% VAT up to USD 46,000 (around €34,000)
added 2013-01-30 18:26:56
Klara Skacanova
Dear Gisli, many thanks for pointing this out. Indeed, we have already reported on the Icelandic incentives previously (http://cars21.com/news/view/4586), but we got mistaken by the report. We have now corrected the information in the article.

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