Polluters pay in Sweden’s EV scheme

Dirty vehicles pay for clean ones under Sweden’s ‘Bonus Malus’ scheme.

Buyers of new cars such as electric vehicles with low or zero carbon dioxide emissions get an attractive bonus, paid for by a punitive tax levied on vehicles at the opposite end of the spectrum.

More than 60 guests at Drive Electric’s global EV update session in Auckland on May 22 from Nordic EV Summit attendees heard how this carrot-and-stick policy (in Latin, ‘bonus’ means ‘good’ and ‘malus’ translates as ‘bad’) is helping Sweden achieve its ambitious target of a 70% reduction in emissions from domestic transport compared with 2010 levels by the end of the next decade.

The scheme is entirely self-funding. As of last July, buyers of any new petrol or diesel vehicle that emits above 95 grams of CO2 per kilometre are stung with an increased annual ownership tax – the ‘malus’ – for the first three years after registration.

The more the vehicle emits the steeper the levy, so the owner of a diesel-fuelled Volvo with a C02 value of 152g/km, for example, will have to pay 720 euros (NZ$1230) annually for three years. By contrast, anyone who buys a car with emissions between zero and 60 grams per kilometre receives a bonus at purchase. Again, it’s on a sliding scale, with zero emission battery electric vehicles (BEVs) and hydrogen fuel cell vehicles (FCEVs) receiving a 5700 euro (NZ$9738) rebate.

In the month of the feebate’s implementation, EV registrations in Sweden hit a historic high for that time of 18% – now projecting a 20% share of newly sold cars that are chargeable, which is the highest in the world after Norway.

Drive Electric chairman Mark Gilbert praises the ‘Bonus Malus’ concept and says it would support a similar “feebate” scheme in New Zealand as proposed by the Productivity Commission, penalising polluters and rewarding zero-emission transport introduction.

“We need to give private and fleet buyers very clear signals about what vehicles are bad for the environment and how they can play a positive part in helping New Zealand achieve its lower emissions through the purchase of ultra-low emission and electric vehicles,” Gilbert says.

He says this type of programme will cost the Government nothing except its management, and potential front loading of the fund.

Gilbert says New Zealand has to triple its average 485 EVs a month to reach the goal of 64,000 EVs by 2021.

“There is not enough happening here to encourage EV uptake and our car consumers aren’t seeing the huge momentum that’s building in other markets towards fossil-free transport of all kinds.”

Another speaker at the event, Meridian Energy’s Nick Robilliard is also impressed by the ‘Bonus Malus’ feebate system, which strikes him as a better fit here than the Norwegian approach.

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