Temporary and Limited Restoration of Conversion Subsidy for E85 Biofuel

An old car tends to pollute more and consume more fuel compared to a new one. However, there is a method to clean up older gasoline engines by upgrading them to use ethanol fuel. This involves installing modifications to the engine so that it can run on a mixture of ethanol alcohol and gasoline known as E85 fuel. The Transport and Communications Committee of the Parliament has completed a report on the government’s proposal to reinstate conversion subsidies for ethanol upgrades for citizens.

The opposition parties in the committee proposed an amendment to extend the application period for the conversion allowance and raise the level of the conversion allowance to 350 euros. However, the representatives of the governing parties voted against this change, and it was not approved. The law will now proceed to the consideration of the plenary session of the parliament. Conversion subsidies for ethanol upgrades are expected to return to use by the beginning of July.

Motorists who update their gasoline cars to run on renewable ethanol and have them inspected will receive a subsidy of 200 euros. The deadline for applying for the subsidy is December 15, 2024, and around EUR 2.4 million of allocated funds are available for this year. The conversion subsidy requires a conversion inspection of the car to use ethanol, and for newer cars introduced after September 1, 2009, a certificate of compatibility from the manufacturer is also needed.

In Finland, E85 fuel is sold at regular gas stations and is often made from domestic waste and residues, reducing fossil emissions by up to 80%. However, the current taxation system does not incentivize switching to alternative power sources, with bioethanol-powered cars taxed the same as gasoline-powered cars. Efforts to lower the tax on E85 fuel could make it more affordable for consumers. The European Parliament elections are crucial for future climate policy, with decisions made at the EU level guiding national policies.