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European Alternative Fuels Observatory


Incentives and Legislation

Incentives and legislation that aim to increase uptake of alternative fuels vehicles and infrastructure. 

If you know of other national or local incentives that should be included in this section, please send us an email and let us know.

Registration tax benefits
  • Exemption from ‘special tax’ for vehicles emitting ≤ 120g CO2/km.
  • Canary Islands: VAT exemption for alternativelly-powered vehicles (eg BEVs, FCEVs, PHEVs, EREVs, HEVs) emitting ≤ 110g CO2/km.
Ownership tax benefits

Reduction of 75% for BEVs in main cities (eg Madrid, Barcelona, Zaragoza, Valencia, etc)

Company tax benefits

The use of a company car for private purposes is regarded as a payment-in-kind and included in the calculation of personal income tax:

  • 30 % reduction for BEVs and plug-in hybrid (PH)EVs ≤ EUR 40 000;
  • 20 % reduction for HEVs ≤ EUR 35 000.


Purchase subsidies

Incentive scheme (MOVES III) in 2021-2023:

Cars (M1): €4,500-7,000 for BEVs and FCEVs, and €2,500-5,000 for PHEVs, for private individuals, depending on whether a vehicle is being scrapped

Vans (N1): €7,000-9,000 for private individuals, depending on scrapping

Different incentives for SMEs and large companies (+ MOVES FLOTAS)

For more details: Link1, Link2.

Incentive scheme (MOVES MITMA) for N2, N3, M2 and M3 vehicles:

  • Scrappage of a vehicle registered before January 2019 (€25,000-2,500 depending on Euro class and type of vehicle)
  • Acquisition of new alternatively-fuelled vehicles (BEV, PHEV, HEV, and also gas for buses)
  • Incentives from €190,000 to €15,000, depending on the vehicle type and the size of the company.

For more details.

Other financial benefits

Luxury tax exemption until 2017. Toll exemption on regional highways EVs. Free parking in selected cities. Traffic lanes reserved for high occupancy circulation can be used only by the drivers of BEV's.

AF infrastructure incentives

In addition, the MOVES III programme aims to improve the charging infrastructure, especially in low-density areas. Municipalities with less than 5 000 inhabitants will therefore receive a subsidy of an additional 10 % for charging stations from the central government. But EVs will also receive an additional 10 % subsidy.

Local incentives

Canary Islands: VAT exemption for alternative-powered vehicles (ie BEVs, FCEVs, PHEVs, EREVs, HEVs, CNG, LPG) emitting up to 110 g/km CO2.
Reduction of 75 % for BEVs in main cities (eg Madrid, Barcelona, Zaragoza, Valencia, etc).