cargo bikes

Money for bikes: Almost 300 incentive schemes accross Europe to boost cycling

According to a new analysis from the European Cyclists’ Federation (ECF), there are almost 300 tax-incentive and purchase-premium schemes for cycling offered by national, regional and local authorities across Europe to make it attractive to cycle more and drive less, reduce transport CO2 emissions and provide important growth stimuli for the European bicycle industry.

ECF has mapped these schemes in a new online interactive tool that provides information about the size of the subsidy, which can go up to several thousand euros per bicycle, the type of bicycle, from conventional bikes to e-cargo bikes, and the eligible target groups.

Jill Warren, CEO of ECF, said: “Tax breaks and purchase premiums open up cycling to large groups of the population who used cars before, including commuters and the elderly using electric bicycles, but also families and small businesses, which now can use cargo bikes for their logistics. These schemes can be put in place at a fraction of the cost governments are investing in tax cuts for company cars and subsidies for electric cars. Public administrations must reform their tax systems to provide more fiscal incentives for cycling and include support schemes for buying electric and cargo bikes in their National Recovery and Resilience Plans under the NextGenerationEU recovery fund.”

In the last year, 14 out of 27 EU countries had at least one tax-incentive or purchase-premium scheme in place at the national level. When it comes to regional schemes, Germany (10 out of 16 states) and Italy (10 out of 20 regions) lead the dance. In terms of local schemes, Germany leads with more than 70 schemes, followed by Switzerland (more than 60 schemes) and Belgium (almost 40 schemes).

City of Gdynia

With its new online tool, ECF provides the first-ever European-wide overview of such measures. These include, among others:

  • Tax cuts for distance-based commuting allowances offered by employers, for example in Belgium;
  • Provision of company bicycles for commuting and private use as fringe benefits free of tax or at low tax rates, for example in Austria, Belgium, Finland, France, Germany, Luxembourg, the Netherlands and recently announced in Sweden;
  • Scrappage schemes for polluting vehicles that offer a subsidy for electric bicycles as a replacement, for example in Finland, Lithuania and recently announced in France;
  • Direct purchase incentives for various types of bicycles, like Italy’s national subsidy of up to €500 with a total budget of €120 million introduced last year.

Besides safe and convenient cycling infrastructure, tax breaks and purchase premiums are important instruments to step up cycling all around Europe. The positive effects have been proven in the past: According to a Belgian survey from 2017, providing a tax-free kilometric reimbursement for cycling to work is the single-most effective measure companies can take to increase cycling levels among their employees. Evaluations of past national purchase-incentive schemes for electric bicycles in France and Sweden have shown that respectively 60% and 50% of trips made with bikes bought through these schemes were in replacement of car trips.

Car free day in Budapest

Also thanks to schemes put in place recently, bike sales are booming in Europe. In 2020, more than five million e-bikes were sold in Europe, a growth of 42% compared to 2019. The same holds true for electric cargo bikes: sales increased fivefold over the past five years in Germany and by 350% over the past year in France. When direct-purchase incentives for electric bicycles were in place in France in 2017 and in Sweden in 2018, sales figures increased by more than 50%.

Kevin Mayne, CEO of Cycling Industries Europe, said: “Europe’s cycling industry is leading the world in the change to e-mobility. Every year, many more electric bikes than electric cars are sold in Europe. We are happy to see that many public authorities already support this change through targeted incentives, but we hope to see even more schemes in the future. As well as the fiscal incentives, innovative companies are combining the benefits with leases and company-bike schemes which stretch the benefits even further. This will help to maintain Europe’s leading position in this field, create jobs and growth in the industry, but it will also be beneficial for consumers, the climate and our cities.”