What you need to know about purchase support for biogas trucks in the Nordics

The governments in Finland, Sweden, and Norway all provide purchase support for biogas trucks, in one way or another. The support systems vary, but all countries see biogas playing an important role in reducing emissions from heavy-duty transport.

The Nordic countries have similar goals in reducing transport emissions, with the lowest target being to halve them by 2030. Biogas as a fuel gives an opportunity for this, and Gasum’s over a 100-strong filling station network the means to distribute it.

Gasum also offers biogas production and biogas availability on an industrial level in the Nordics. By 2025, Gasum will make 4 TWh of biogas available through its own production and certified European partners. This ensures local availability and offers a bridge between LNG (liquefied natural gas) and LBG (liquefied biogas), assisting in the necessary steps towards carbon neutrality.

Regarding the heavy-duty transport, the Nordic market differs from many Central European countries and North America in that the logistics buyers have only little or none of their own trucks, and rely on transport companies to purchase services from.

”Transport companies do not drive for themselves but for their customers. These companies, the customers, have very strict emission reduction targets. The answer to this equation is biogas - it is available, sustainable and cost-effective,” Jani Arala, Head of Traffic Solutions, describes the situation in a nutshell.

Finnish purchase support is fixed contrary to Norway and Sweden

In Finland, the government has drawn up a roadmap for fossil-free transport, with the aim of halving emissions by 2030. Biogas is seen as playing a significant role in the goal of reducing emissions from heavy-duty transport. By 2030, there should be at least 6,200 gas trucks in service.

The Finnish purchase support is fixed, contrary to Sweden and Norway, which offer a percentage to cover the excess of the purchase price compared to the diesel option. In Finland, the amount is 12,000 euros for a LNG/LBG fueled truck and 5,000 euros for a CNG/CBG (compressed natural gas/compressed biogas) fueled truck.

The purchase support has attracted enormous interest from transport companies. The Finnish government launched the initiative in December 2020 and set aside EUR 1 million for support over two years. The popularity has been so immense that the reserve has started to run out only after a year from its launch. A recent draft from the Ministry of Transport and Communications states that the support will be continued in the future, effective from the beginning of 2022. The purchase support covers all gas-fueled transport equipment, i.e. vans and trucks (CNG, LNG and biogas).

Gas-powered transport vehicles are practically the same price in Finland, Sweden and Norway. There is no car tax on heavy-duty vehicles, whereas car taxes on passenger cars have led to different purchasing price levels between the countries.

On average, long-haul diesel-powered vehicles cost over 100,000 euros per vehicle, where as biogas-fueled vehicles cost 35-45,000 euros more. In Finland, with the help of the purchase support, 12,000 euros can be subtracted from the purchasing price, in Sweden and Norway the amount is approximately 20,000 euros. But in the bigger picture, the benefits don’t end there, Arala argues.

“We must not forget that gas powered trucks generate annual fuel cost savings compared to diesel. As a result, the (higher) purchasing price of the vehicle can be amortized faster,” he points out.

Read more about the Finnish purchase support (in Finnish)

The Swedish model, simple and clear

As part of the Klimatklivet, a support initiative for local and regional investments, the Swedish government also supports the use of biogas. Regarding heavy-duty vehicles there are two purchase support schemes: KlimatKlivet and Klimatpremien.

The KlimatKlivet purchase support is designed for planning fleet purchases years ahead and can be applied years in advance. The Klimatpremien is for situations where a customer needs to fast track a truck purchase. The application in Klimatpremien can be accepted in approximately two weeks’ time.

“The KlimatKlivet purchase support is 40-60 per cent off the extra cost and the Klimatpremien 40 % compared to a diesel powered HDV (heavy duty vehicle),” says Mikael Antonsson, Sales Director.

Sweden is the Nordic forerunner when it comes to filling station infrastructure. There are 27 stations for supplying liquified gas for heavy-duty transport and over 200 stations supplying compressed gas for passenger cars.

Unlike in Finland and Norway, Sweden also has a tax relief for biogas-fueled passenger cars, called bonus malus, which gives a flat rate of 40 euros per year. Comparatively, the tax rate for a standard petrol or diesel car is around 800 - 1000 euros per year.

According to Antonsson, the key driver to converting to gas is sustainability and competitiveness.

“The main thing that matters to truck owners is the total cost of ownership (TCO). With the purchase support, the business case is very good, as the cost of running on biogas is low.”

There is also the clear benefit of sustainability. This attracts more customers because the buyers of logistics are looking for companies that provide sustainability.

Regarding green transition, Antonsson addresses the necessity of options in the energy mix of the future but underlines the importance of having a solid one today already.

“There is no silver bullet, so to speak. A fuel, that would solve every problem in the future. We must have different solutions and biogas is one we can apply today, without having to wait for future innovations.”

Read more about the purchase support in Sweden (in Swedish)

Stricter emission limits in capital region drive the change in Norway

In Norway, the support system differs from Finland and Sweden in that the opening of new filling stations, and new biogas HDV customers are linked together through subsidies. In the coming years, stricter emission limits in Oslo and the exemption of biogas vehicles from road tolls will further increase interest towards them.

Enova SF is a Norwegian government enterprise responsible for promotion of environmentally friendly production and consumption of energy.

“Enova subsidizes vehicles that run on biogas. The purchase support ranges between 40- 50 per cent of the extra cost of the gas vehicle compared to a diesel version. 50 per cent for small companies and 40 per cent for big companies,” says Jogeir Munkeby, Business Development Manager.

There is also support for companies, that build infrastructure, such as Gasum. If a logistics company moves to a new location where there isn’t any gas infrastructure today, they can request assistance on subsidizing a filling station to be built in the region. This requires an application from the infrastructure builder as well.

“It is very important to align the applications from the truck owners and Gasum. Nowadays the applications for trucks need to be for several trucks, instead of just one.”

Today there are about 25 filling stations for compressed gas, but only 4 for liquid biogas, out of which two are built by Gasum. There are several filling stations planned to be finalized in 2022.

“With the existing climate goals in Norway, we see that the industry needs 25 filling stations for liquid biogas in 2025.”

Biogas is locally produced in Norway and can cut emissions by 90-95 per cent. Norway has a target to reduce co2 emissions by 55 per cent by the year 2030. Traffic plays a significant role in this as 20 per cent of the annual emissions are from road transport.

The climate targets will set in motion changes that will be seen in the vicinity of the capital area and neighboring regions.

After 2025, only the heavy-duty vehicles which are electric, hydrogen or biogas powered are permitted to drive in Oslo. Out of the three options, only biogas has the necessary infrastructure and availability ready.

“There are approximately 100 000 HDV’s in Norway total. We see that up to 20 per cent can run on biogas in Norway.”

1.12.2021