Sweden will offer an incentive of EUR1,070 to those who buy cars emitting emitting less than 120 grams per kilometre of CO2.

Automotive News Europe reported that the scheme began yesterday (1 April) and runs to December 2009.

“The discount aims at encouraging more people to buy fuel-efficient cars and cars that [run on] environment-friendly fuels,” environment minister Andreas Carlgren said. “You should feel the benefits to the environment in your heart, but they should also be noticeable in your wallet.”

The government has allocated EUR5.4m to the scheme this year and a further EUR10.8m for each of 2008 and 2009.

The Swedish Road Administration estimated the discount would boost green car sales by 10 to 15%.

Sweden has also passed a law requiring all major filling stations to provide an alternative fuel.