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Eco-car subsidy could break budget

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08:36 CET+01:00
The government has set aside 250 million kronor for subsidies to buyers of eco-cars. Forecasts indicate an eventual cost of 1.4 billion.

Private car buyers receive a 10,000 kronor subsidy when choosing an eco-car - fuelled for example by ethanol or bio-gas. The scheme has been so popular that the bill could be five times the 250 million kronor budgeted by the government, Sydsvenskan reports.

The eco-car subsidy has been in force since April 2007 and will run until the end of December 2009.

45,020 eco-cars were sold in Sweden during the scheme's first nine months, 44 percent of which were bought by private people.

The sector forecasts that 100,000 eco-cars will be sold during 2008 and 150,000 in 2009, with the same proportion of private buyers. If the forecast holds then the government will have to find a total of 1.4 billion kronor to meet the bill.

Automotive sector interest group, Bil Sweden fears that the government could be obliged to limit the subsidy if costs become too high.

Environment minister, Andreas Carlgren, wants to wait until budget negotiations are underway.

"I don't want to discuss budget figures, except to say that current conditions for the eco-car subsidy remain valid. The government has not taken any further decision," Carlgren said to the newspaper.

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