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EC approves €300M boost in state funding in Germany for electric bus subsidies; €650M total

The European Commission (EC) last week approved an increase in state funding by €300 million (US$332 million) for the purchase of electric buses in Germany in accordance with EU state aid rules. The German aid scheme will apply until the end of 2021 and is intended to cover the additional costs for the purchase of electrically operated or rechargeable hybrid buses instead of conventional diesel buses and the establishment of the charging infrastructure required to operate these buses.

The total state funding for this now amounts to €650 million (US$719 million).

The Commission had already determined in 2018 that Germany’s plans to promote the purchase of electric buses and charging infrastructure by public transport companies were in line with EU state aid rules.

The Commission believes that the state subsidy scheme gives bus operators an incentive to invest more in this type of vehicle and the necessary charging infrastructure. Public transport companies must also ensure that their electric and plug-in hybrid buses are powered by electricity from renewable energy sources.

The new increase in funding is expected to lead to additional CO2 reductions (around 45,000 tonnes of CO2 equivalents per year), which are in line with the EU’s climate and environmental goals and the goals of the European Green Deal. It will also help improve air quality, particularly by further reducing nitrogen oxides (NOx) by up to around 170 tons per year.

The measure is also in line with the European strategy for low-emission mobility. In particular, it supports the switch to zero-emission vehicles in metropolitan areas and the creation of a market for such vehicles.

Based on these considerations, the Commission concluded that the benefits of the project in terms of EU environmental objectives are clearly greater than any distortions of competition caused by the aid. Therefore, the aid scheme was approved in accordance with EU state aid rules.

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