At the start of each year, the logistics industry regularly talks about de-minimis funding. Companies should modernise their fleet in terms of environmental, safety and sustainability aspects with the government's subsidy. However, the public sector does not give away entire electric trucks. Instead, money is handed out "for the smaller things", as "de-minimis" is quite literally translated. These subsidised small things also include lorry tyres. Bohnenkamp discussed the details of the de-minimis funding with Michael Schwämmlein. The Technical Managing Director at the Federal Association of Tyre Trade and Vulcanising Craft (BRV) reveals how freight forwarding and logistics companies can best utilise the de-minimis funding.
Bohnenkamp: What exactly is the payout of the de-minimis aid in the transport sector supposed to achieve?
Michael Schwämmlein: The de-minimis funding aims to support goods transport companies in the areas of environment and safety. When it comes to reducing CO2 emissions in the transport sector, the actual figures are a long way off target. A national subsidy is always viewed critically by the EU because it could potentially distort competition. The de-minimis regulation bypasses this point of criticism because, as the term says, it is about "small subsidies".
Which purchases are generally eligible for funding?
Non-obligatory safety features for vehicles are among the things being promoted. This includes tyres marked with the 3PMSF symbol or the M+S seal on some axle positions, such as those that are part of the prescribed equipment for the situational winter tyre obligation. Tyres with low rolling noise and low rolling resistance are also eligible for funding.
In addition, there are many areas that have nothing to do with tyres. For example, driver assistance systems and communication systems between the vehicle and fleet management are being promoted. There are many aerodynamic measures that lead to a reduction in fuel consumption and are therefore promoted, or installations that have a positive effect on particle emissions - and of course environmental and safety certifications. There are also individual measures for workplace ergonomics to relieve the driver and prevent fatigue. Anyone who is ultimately interested should look at the positive list of the Federal Office for Logistics and Mobility (BALM). What is not noted there will not be subsidised.
What exactly does the de-minimis regulation say about the subsidising of tyres and wheels?
In the tyre sector, the funding is divided into two sections. First of all, section 1.3 describes the funding of non-mandatory equipment with winter tyres on axles that are not already prescribed by the situational winter tyre obligation. Since July 2020, this has affected the permanently driven drive axles of a vehicle and the front steering axles. These are - to stay technical - tyres with M+S markings, which were made before the year 2018, and of course the current tyres with the snowflake symbol (3PMSF symbol). It's irrelevant whether they are new, used or retreaded tyres.
These tyres are subsidised at 100% of the net-net price. This phrasing has repeatedly led to misunderstandings in the past. Because generally only 80% of the eligible expenses, i.e 80% of the net costs, are covered.
The second subsidy, according to section 1.9, is the subsidy for (retreaded) tyres depending on their label classes in terms of noise emissions and rolling resistance.
- Tyres that are marked with tyre rolling noise class A (or 1 sound wave) and
- have a rolling resistance class D or E are subsidised with 30%* of the purchase price, rental fees or leasing rates.
- Those with a rolling resistance class C are subsidised with 60%* of the purchase price, rental fees or leasing rates.
- A rolling resistance class B will be subsidised with 70%* of the purchase price, rental fees or leasing rates.
- A rolling resistance of class A will be subsidised with 80%* of the purchase price, rental fees or leasing rates.
- Tyres labelled with class B or C tyre noise (or 2 or 3 sound waves) and
- those with a class C rolling resistance are subsidised with 30%* of the purchase price, rental fees or leasing rates.
- A rolling resistance of class B will be subsidised with 40%* of the purchase price, rental fees or leasing rates.
- Those which have a rolling resistance of class A are subsidised with 50%* of the purchase price, rental fees or leasing rates.
At the same time, a flat-rate subsidy of 50% applies to retreaded tyres, which can be included in the subsidy due to their sustainability.
What does tyre subsidy according to the de-minimis regulation mean in specific figures? Do you have an example?
Let's imagine a three-axle, 26-tonne vehicle with a 6x2 axle configuration, i.e. a steered front axle, a permanently driven drive axle and a trailing axle. Then one could equip this vehicle as follows:
- in accordance with the subsidy outlined in section 1.3, winter tyres may be fitted on the trailing axle, as we have just defined. At a price of 450 euros each and a funding rate of 100 percent for non-obligatory means, that would be 900 euros of eligible expenditure.
- Two tyres, each with an A rating in noise emission and rolling resistance, are mounted on the front axle. So, with a tyre price of 2 x 450 euros and a funding rate of 80%, that's exactly 720 euros of eligible expenditure.
- Four retreaded tyres are mounted on the drive axle. Then, with an assumed price of 300 euros per tyre, there would be a flat rate subsidy of 50%, thus 600 euros of eligible expenditure.
In total, we therefore have eligible expenditure amounting to 2,220 euros, which can be funded up to a maximum of 80%. So that would be 1,776 euros of funding.
But that's not all because the costs for assembly and mounting aids can also be deducted with a funding rate of 100 percent. Assuming assembly costs of 30 euros per tyre, that would be another total of 240 euros in eligible expenditure, of which 80 percent equalling 192 euros would be paid out. This would increase the grant to a total of 1,968 euros.
Are there funding caps?
First of all, we are only talking about vehicles used in freight transport which are subject to tolls and have a permissible total weight of more than 7.5 tonnes.
The funding is also capped by several upper limits. The subsidy per vehicle must not exceed the limit of 2,000 euros. Moreover, a company is not allowed to receive more than 33,000 euros from this funding pot. And the sum of all de-minimis subsidies must not exceed 100,000 euros per company within a time frame of 3 years. Thus, the legislator wants to avoid distortions of competition.
The annual funding period must also be taken into account. It started on 09 January for the year 2023 and is expected to finish on 02 October. During this period, the total of approximately 260 million euros in funding can be applied for. Here, it is important to submit the application quickly, as the processing is strictly carried out on a first-come, first-served basis.
Where can businesses get help with applying for de-minimis aid?
Companies can get help from BALM (Federal Office for Logistics and Mobility), among other places. They offer a detailed and structured question and answer catalogue in PDF form, which provides guidance on specific concerns. In addition, various goods transport associations offer their members practical assistance, such as with filling out forms. We also recently provided our members with Excel assistance for the exact calculation of the funding amount according to section 1.9. However, it can also be found on the BALM page. Here, you can enter the tyre and assembly costs as well as the respective tyre classes for each vehicle. The tool then calculates the eligible expenses and the 80 percent funding amount.
What else should tyre dealers and workshop operators consider on the topic of de-minimis?
When a tyre dealer issues an invoice, the necessary label values and product characteristics must appear on the invoice, so the 3PMSF marking, the noise emission class and the degree of rolling resistance must be clearly identifiable. Within the framework of the new tyre labelling regulation, we advise that the label printout for the relevant tyre types is simply attached to the invoice. The costs for the assembly work and the tools used must also be attributed to the respective tyres. This way, the applicant can ideally fulfil their obligations towards the BALM.
For me, it is important that the dealer is able to inform the customer about their options, but please ensure that the focus of the tyre recommendation is the use of the vehicle, not maximising subsidies. Because it doesn't make sense to sell a long-distance tyre to a transporter who only operates regional transport just because it has a rolling resistance class of A. The tread will crack due to the mileage and then the operator will have gained nothing.
Graduate electrical engineer Michael Schwämmlein entered the tyre business with a French manufacturer at the end of the eighties. There, he started with the design and optimisation of tyre building machines. Ultimately, via product engineering, he came to oversee retreaders and repairers. Even during this time, he was involved in various technical working groups of the BRV. Schwämmlein remained loyal to association activities throughout his further international career. Michael Schwämmlein has also made contributions to the European retreading association BIPAVER (Bureau International Permanent des Associates de Vendeurs et Rechapeurs de Pneumatiques). He was last employed there as a technical consultant. In 2019, Michael Schwämmlein replaced his predecessor Hans-Jürgen Drechsler in the office of the Technical Managing Director at the BRV.