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Subsidies for Electric Buses to Be Based on the Number of Passengers to Encourage Services on High -Traffic Routes

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To achieve the goal of full electrification of public buses by 2030, the MOENV announced the Guidelines Governing the Subsidies for the Operation of Electric Buses (補助電動大客車營運作業要點) on 21 September 2023. Instead of directly subsidizing the purchase of electric buses, the guidelines have been revised to provide operational subsidies based on the actual mileage driven and the number of passengers carried by electric buses. The subsidy cap has also been increased from NT$1.5 million to NT$1.6 million to encourage operators to run their services on high-traffic routes, thereby raising the effectiveness of carbon reduction.

To achieve the goal of "electrification and decarbonization of transportation," the Executive Yuan has approved the 2030 Passenger Vehicle Electrification Promotion Plan (2030年客運車輛電動化推動計畫) jointly proposed by the Ministry of Transportation and Communications and the MOENV. The MOENV is responsible for implementing operational subsidies for electric public buses to encourage operators to phase out diesel buses in favor of electric ones as early as possible and prioritize the deployment of the buses on high-traffic and high-mileage routes, so as to reduce private vehicle use while achieving both carbon reduction and pollution reduction benefits.

Before 2022, the MOENV provided a one-time subsidy of NT$1.5 million per bus for the purchase of electric buses. However, starting from 2023, the subsidy application process has been revised to be based on the actual mileage driven and the number of passengers carried by electric public buses. It is no longer a simple subsidy for bus replacement. In addition, the maximum subsidy per bus has been increased to NT$1.6 million. The subsidy is allocated over a four-year period and is intended for long-distance and urban public bus operators. Subsidies are granted based on the actual mileage driven and the number of passengers carried by each bus. To account for regional differences, this subsidy program also sets different subsidy rates for counties and cities outside of the six special municipalities, as well as for areas in Eastern Taiwan and outlying islands. This is done to enhance the incentives for operators in all regions to switch to electric buses.

The MOENV estimated that the replacement demand for urban public buses, along with some highway and national highway public buses, from 2024 to 2030, will be approximately 12,170 buses. It is anticipated that once fully electrified, these buses will produce zero carbon emissions during operation, resulting in a reduction of 307,000 metric tons of CO2 emissions and a reduction of 4,327 metric tons of air pollutants annually. The operational subsidies are expected to incentivize operators to prioritize the operation of electric buses on popular routes, further reducing emissions by an estimated 62,000 metric tons of CO2 and 1,450 metric tons of air pollutants annually.

In addition to the announced operational subsidies for electric public buses, the MOENV is also promoting a system for matching air pollution reduction benefits. Public bus operators who replace old diesel buses with electric ones can receive an additional subsidy of NT$30,000 per bus for air pollution reduction. They can also choose to use the Vehicle Replacement Offsets Matching Platform to match and sell their benefits to environmental impact assessment (EIA) developers in need and receive a higher amount of money.

Excerpt from Major Environmental Policies, September 2023

Ministry of Environment