Background information

Over the years, a number of Government schemes have provided incentives for the purchase of various types of environmentally friendly road vehicles. Schemes are re-issued on an annual basis whereby the total budget dedicated to the measure is announced, as are the financial amounts that various applicants can benefit from. In March 2023 it was announced that the scheme had been bolstered by Malta's allocation of recovery and resilience facility (RRF) funding. In fact, whereas the maximum budget allocated to the scheme in 2021 was €2.5 million, it was announced that €50 million of Malta’s RRF funding had been allocated to the purchase of electric vehicles between 2022 and 2024. More specifically, €15 million in funding was allocated for each of 2022 and 2023, whereas €20 million was allocated for 2024. The scheme was published in the Government Gazette on 21 March 2023.

In September 2023, it was announced that apart from the €15 million in funding that was allocated via the RRF, a further €13.4 million was added via national funds.

Content of measure

The scheme provides persons residing in Malta, voluntary organisations and undertakings established in Malta to apply for a grant towards purchasing a new electric vehicle in Category L, M and N, as well as the purchase of a pedelec. Amongst the types of vehicles that can be purchased through this scheme are passage cars, goods-carrying vehicles, minibuses, coaches, quadricycles, motorcycles and pedelecs.

The incentive to be paid depends on the vehicle to be purchased, whilst also varying depending if the business undertaking falls under the de minimis state aid rules or the General Block Exemption Regulations.

In the case of individuals, voluntary organisations and business undertakings under the de minimis state aid rules, €500 is provided per pedelc, €2,000 per vehicle but not more than 80% of the selling price when purchasing a low or medium motorcycle or quaricycle, 25% of the CIF (Cost, Insurance and Freight Value) capped at €6,000 is provided per high-powered motorcycle or quadricycle, €11,000 per car or van, and 40% of the selling price capped at €70,000 per vehicle when purchasing a minibus or small truck.

In the case of electric vehicles purchased by business undertakings under the General Block Exemption Regulations, 60% of the investment cost is provided to small organisations, 50% to medium organisations and 40% to large organisations. A cap of €5,000 per vehicle applies when purchasing low and medium-performance motorcycles as well as light and heavy quadricycles, the purchase of cars and vans are capped at €20,000 per vehicle, minibus and small trucks are capped at €70,000 per vehicle and coaches and trucks are capped at €400,000 per vehicle.

In all cases, a further incentive is paid when an old vehicle is scrapped when purchasing an electric vehicle. The amounts provided vary between Malta and Gozo (Malta’s sister island). An additional €500 is provided when scrapping a motorcycle (L) in any region. €1,000 is provided when scrapping a car (M1) or van (N1) in Malta, and €2,000 for those in Gozo. €30,000 is provided when scrapping a minibus (M2) in Malta and €31,000 when in Gozo. Those scrapping a small truck (N2) receive €15,000 when in Malta and €16,000 in Gozo. €50,000 is received for scrapping a coach (M3) in Malta and €51,000 when in Gozo. Finally, €25,000 is provided for scrapping a truck (N3) in Malta and €26,000 when in Gozo.

To be eligible for this scrappage scheme, the deregistered vehicle shall be from the same or smaller category as the new Electric Vehicle being registered. However, when an applicant registers a new category L vehicle, the applicant may deregister a vehicle from category L or M1 or N1 and still be eligible for the scrappage scheme grant.

Use of measure

1,375 grants were provided in 2022. In terms of 2023, by the end of August 2023, a further 5,549 had benefitted from the scheme. In fact, €23.2 million of the €28.4 million allocated for the scheme in 2023 had already been used.

During a January 2024 press release, the Government stated that the measure was proving successful as 14,447 vehicles, including 10,350 electric vehicles and 4,097 plug-in hybrid vehicles had been registered by the end of December 2023. It was not stated if all these vehicles had been registered via this scheme or not.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government	European Funds National funds National Recovery and Resilience Facility

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

The involvement of social partners in the design of this measure is unclear, however evidence suggests that social partners have had an impact on the design of the measure, possibly via consultation or lobbying. Social partners however have regularly shown their support of measures that aid individuals and organisations to purchase electric vehicles. For example, the UHM, a large union in Malta encouraged measures to facilitate the purchase of electric vehicles in their 2022 pre-budget proposal document.

In terms of employer associations, the Malta Employers' Association (MEA) had been calling for stronger incentives to promote the uptake of electric vehicles prior to the announcement of this scheme, whilst the Malta Chamber of Commerce viewed the electrification of vehicles as one that offered "increased quality of life, cleaner air and new economic opportunities." Suggestions made by the Malta Chamber for the 2023 budget, for example, that "a commercial vehicles scheme falling under GBER regulations is introduced" features in the 2023 scheme, suggesting that social partners have had an impact on the development of the scheme.

Views and reactions

Social partners are generally positive on the provision of incentives for electric vehicles; in their 2024 pre-budget proposal document, the General Workers' Union (GWU) stated that the incentives for purchasing a fully electric car should be increased further. Furthermore, the Malta Chamber notes that in order for greater take-up of electric vehicles, investment is needed in other facets, including investment in the electricity distribution grid.

Sources

• 21 March 2023: Government grant scheme regulations (www.transport.gov.mt)
• 22 May 2023: Purchase of New Electric Vehicles Scheme (www.transport.gov.mt)
• 18 September 2023: TMID - 5,549 people have benefited from Transport Malta grants so far in 2023 (www.independent.com.mt)
• 31 January 2024: Press release - Towards a sustainable future – Transport Malta launches €15 million financial grant for the purchase of new Electric Vehicles (www.transport.gov.mt)