On April 25, 2022, Law No. 295 was enacted, which encourages electric mobility in land transportation. This new regulation proposes a process of energy transition from internal combustion transport to electric land transport, and promotes the reduction of greenhouse gases.
The energy transition includes proposals that focus on changing technology in the public, private, and even academic sectors, and its goal is to position Panama as a new country with the intention of improving the environment.
The new law establishes that, as of the year 2025, at least 10% of the vehicles of public entities and collective and selective transport (i.e., buses and taxis) must be electric. In 2027, the minimum percentage will increase to 25% for public entities and 20% for collective and selective transport. It is expected that, by the year 2030, the minimum percentage of the electric fleet of public institutions will be 40% and 33% for collective and selective transport.
It is important to mention that Law 295 allows the entry of new business models, stimulating the economy, energy efficiency, software development and new technologies, relying both on educational institutions and companies, achieving adaptation and training in educational plans that allow the development of professionals interested in this modality, which will surely generate jobs.
The law in question establishes two incentives that seek to massify the use of electric vehicles, namely: a) exoneration of the vehicular license plate fees for five years and b) public institutions, shopping centers and real estate projects must have a minimum of 15% of preferential parking for electric vehicles, which will be distinguished and marked with green color.
With the enactment of this law, the installation of charging stations for electric vehicles is regulated. In this regard, the law provides that the municipalities will require the installation of charging stations as a requirement for the approval of construction permits for residential and commercial buildings and public institutions. In addition, these charging stations will have a meter that will record the energy consumed by the vehicles, it will allow the energy used to recharge vehicles to be resold and a registry will be created for the generation of data and measurement of greenhouse gases.
Finally, Law 295 modifies the rate of the Selective Consumption Tax for electric land motor vehicles by setting it at 0% until December 31, 2030, and 5% as of January 1, 2031. For hybrid land motor vehicles, the Selective Consumption Tax rate is set at 10%.
We are sure that this law will accelerate the purchase of electric vehicles in Panama, which will help to reduce environmental pollution. On the other hand, it comes at a very opportune moment in which the worlds population is being impacted by the high price of oil and its derivatives.
