STATE AID: COMMISSION APPROVES DANISH SUBSIDY FOR PURCHASE AND OPERATION OF ELECTRIC CARS.

BRUSSELS -- The following information was released by the European Union:

The European Commission has authorised, under EU state aid rules, DKK 15 million (approximately 2 million) of public funding for a pilot program incentivising the purchase of electric cars. The scheme supports projects aimed at testing and test-running electric vehicles under realistic conditions and is expected to increase the number of wholly electrically propelled cars in Denmark, thereby decreasing the dependency on fossil fuel and reducing carbon dioxide emissions. The Commission concluded that the aid is unlikely to lead to significant distortions of competition in the internal market and is therefore compatible with the EU Treaty rules in view of the environmental benefits it will bring about.

JoaquA-n Almunia, Vice-President of the Commission in charge of competition policy noted: "The Danish measure is a good example of how Member States can lower their carbon dioxide emission level by promoting the everyday use of zero-emission vehicles, in line with EU state aid rules and the EU 2020 objectives."

The Commission has approved an aid of approximately 2 million (DKK 15 million) for a pilot scheme in Denmark which will support projects aimed at testing and test-running electric vehicles under realistic conditions, with the aim to identify the main obstacles related to their use. The aid will cover the necessary additional expenditure incurred when purchasing electric vehicles rather than their conventional, petrol- or diesel-driven equivalents, as well as the necessary expenditure with the trials and the equipment for charging the vehicles. The scheme is open to all fleet owners, public institutions and private enterprises alike. Beneficiaries, who are selected by the Danish Energy Agency, are responsible for making the results of the vehicle trials available to the public. The scheme will be in force until 31 December 2012.

The pilot scheme's main objective is environmental protection and the subsidy is granted to the purchasers or financial lessees of electric vehicles. At the same time, applications for aid are assessed independently of the make or model of car concerned, which ensures that there is no discrimination between car manufacturers. Considering the scheme's total budget of 2 million and its limited duration, it is unlikely that car manufacturers or dealers could derive significant indirect benefits from its operation and the eventual distortions of competition will therefore be very limited. On the other hand, the scheme's direct positive effects of favouring the use of environmentally friendly electric cars are reinforced by indirect benefits generated by the publication of trial results and studies This will reduce obstacles related to the use of electric cars and their market penetration is likely to further increase.

Reducing CO2 emissions from cars remains one of the objectives of the EU environmental policy, to which electric cars covered by the pilot scheme clearly contributes. Therefore, and considering that the scheme is open to all beneficiaries acquiring electric cars from all makes, the Commission concluded that the measure taken by Denmark is an appropriate and proportionate measure necessary to achieve an objective of the interest of the entire EU.

The non-confidential version of the decision will be made available under the case number N 386/2010 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.