Interest-free loans may speed up green transition

VAT exemptions on green energy sources are not enough to reach the government’s target of reaching 100 percent sustainable energy use by 2030.

This is the view of environment minister Sirið Stenberg, who believes that much more can be done to speed up the transition to sustainable energy as an apparent waiting game between energy providers and consumers is currently slowing down the 2030 plan.

National energy supplier SEV said last week that if consumers do not switch from using oil to sustainable energy sources, there is not much point for suppliers to invest in green energy.

Despite VAT exemptions on green energy sources such as heat pumps, oil is still significantly cheaper, and the price difference remains a crucial factor for consumers, according to the minister.

State may need to step in

One proposed solution has been to ban the use of oil-fuelled boilers in new buildings, but this proposal was voted down in Parliament.

An ideal solution, according to Stenberg, would be to have private suppliers of green energy sources but, failing that, the state needs to step in.

“A conceivable option would be that the state initially pays the price difference between oil and green energy, for instance by providing interest-free loans for sustainable energy sources,” she says.

“When an entire nation sets out to convert from oil to sustainable energy over a relatively short period, it is not right to lay additional burdens on families so that only wealthy citizens can actually afford it, so these measures are worth considering.”

Translated by prosa.fo