German funding for electric buses increased by £300 million

The European Commission has approved the increase in state funding by €300 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 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 aid scheme aims to help reduce CO₂ emissions without unduly distorting competition.

The Commission has reported that the state subsidy scheme gives bus operators an incentive to invest more in this type of vehicle and the necessary charging infrastructure. 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 also aims to help improve air quality, particularly by further reducing nitrogen oxides (NO_x) by up to around 170 tonnes per year.

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

Energy efficiency is considered key to the transition to clean energy in Europe and to fulfilling the Paris Agreement commitment to cut emissions in the EU by at least 40 per cent by 2030. 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 has been approved in accordance with EU state aid rules.