Luxembourg's Ministry of the Environment, Climate and Sustainable Development, the Ministry of Energy and Spatial Planning and the Ministry of Mobility and Public Works have announced details of financial incentives for zero and low-carbon emission vehicles.

In view of the rapid implementation of the provisions of the coalition agreement on the decarbonisation of transport and the promotion of electromobility, the Government cabinet has approved - during its meeting of 25 January 2019 - a draft law to establish a financial support scheme for vehicles with zero or low CO₂ emissions.

In order to further promote electromobility, the government programme plans to replace the current model of tax incentives with a new model of targeted subsidies.

1. Self-propelled vehicles

The government is introducing new financial assistance for the purchase of new vehicles in the form of a grant, the amount of which varies according to the category of vehicle concerned:

• €5,000 for 100% electric cars and vans

• €2,500 for hybrid plug-in type cars and vans with CO₂ emissions of less than or equal to 50 g/km

• up to €500 for the following 100% electric vehicles: quadricycle, motorcycle, light motorcycle (125 cm3) and moped (scooter and pedelec45). The amount of the premium is 25% of the VAT cost of the vehicle, up to €500.

In line with the government's technology-neutral approach to zero-emission vehicles, hydrogen fuel cell cars and vans are also eligible for the €5,000 grant.

The electric scooter is not eligible because its predominant use is on footpaths and the equipment of the majority of these vehicles do not comply with the provisions of the Highway Code.

Beneficiaries of the premium and conditions of eligibility

Financial aid is reserved for private individuals and legal persons who own a vehicle registered in Luxembourg. In the case of a lease or leasing agreement, the financial assistance may be granted to the holder of the vehicle entered on the registration certificate or identified on the rental or leasing contract, provided that the owner of the vehicle waives the aid in question and that the vehicle is registered in Luxembourg.

Financial assistance is available for vehicles first put into circulation between 1 January 2019 and 31 December 2019 inclusive, which have not yet been registered abroad. A minimum period of retention by the applicant of 7 months will apply.

At the end of the year, the government will evaluate the impact of this measure and decide on its possible adaptation.

2. Premium for bicycles and pedelecs25 (e-bicycles)

In order to promote cycling as an environmentally-friendly mode of transport, the government is also introducing a bonus of up to €300 for the purchase of a bike or pedelec25 (pedal-assisted bike with a power not exceeding 0.25 kW). The amount of the premium is 25% of the VAT cost of the bike or pedelec25, but not more than €300.

Beneficiaries of the premium and conditions of eligibility

The financial aid is reserved for natural persons residing in the Grand Duchy and aged at least 18 at the time of purchase of the bike or pedelec25 for their personal needs. Only one financial aid per person for either a bike or a pedelec25 is granted within a period of 5 years.

The grant is allocated for new bikes and pedelecs25 for which the invoice is issued in 2019. No minimum holding period is required.

3. Procedures for obtaining the grants

Requests for grants (cars and bicycles / pedelecs25) are to be made to the Environmental Administration, subject to a form to be made available soon.

Applications may, however, only be submitted once the Grand-Ducal Regulation has been published in the Official Journal.

Note: except for bicycles and pedelecs25, applications for premiums may be submitted no earlier than 7 months after the date on which the vehicle was registered in the name of the applicant for financial assistance.

As a general rule: the date of the first registration + 7 months = first possible date for the premium request via form which will be available online at www.clever-fueren.lu.

Premiums can not be combined with tax deductions for sustainable mobility. A natural person can, however, get a bonus for both an electric vehicle and a bike / pedelec25.

Premiums are awarded by the Ministry of Environment, Climate and Sustainable Development through the Climate and Energy Fund.

The future financial aid scheme will be an important element of the electromobility promotion strategy, in addition to the "Chargy" network and the fast charging stations provided for service areas all powered by green energy.

www.clever-fueren.lu and www.oekotopten.lu