Sustainable transport incentives for 2023

Transport Malta has recently re-issued a number of incentive schemes aimed at improving the sustainability and accessibility of road transport. The schemes are available until 31 December 2023 unless modified or terminated through the full use of the respective allocated budget before such date

1. New Electric Vehicle and scrappage grant scheme

This grant scheme has a total budget of €15,000,000 and aims to encourage the purchase of new electric vehicles falling within the following categories:

New passenger cars

Goods carrying vehicles;

Coaches;

Minibuses;

Quadricylces;

Motorcycles; and

Pedelecs.

The scheme is available to:

Persons residing in Malta;
Voluntary organisations (including NGOs); and
Undertakings established in Malta.

The financial incentive makes a distinction between establishments that carry out economic activities and those that do not. Moreover, the intensity of financing differs according to the size of the enterprise and the type of electric vehicle category.

Additional grant amounts are available when a vehicle is being scrapped and for the purchase of electric Category L vehicles or pedelecs.

Applicants not carrying out an economic activity

With regards to eligible persons residing in Malta and voluntary organisations that do not carry out economic activities, the grants available vary by vehicle type:

Type of vehicle	Grant amount
Pedelecs	€500 per vehicle
Cargo pedelecs L1e-A/B - Powered cycles & Two-wheel mopeds L3e-A1/A2 - Low & Medium performance motorcycle L4e-A1/A2 - Low & Medium performance two-wheel motorcycle with side-car L5e - Powered Tricycle with power not exceeding 15kW. L6e - Light quadricycles or quadri-mobile.	€2,000 per vehicle (at a maximum of 80% of the selling price)
L2e - Three-wheel mopeds; L3e-A3 - High-performance motorcycle; L4e-A3 - High-performance two-wheel motorcycle with side-car. L5e - Powered Tricycle with power exceeding 15kW. L7e - Heavy quadricycles or quadri-mobiles	25% of CIF, capped at €6,000 per vehicle
M1 - car N1 - Vans	€11,000 per vehicle
M2 - Minibus N2 - Small Truck	40% of the selling price, capped at €70,000 per vehicle
M3 - Coaches N3 - Trucks	40% of the selling price, capped at €400,000 per vehicle

Applicants carrying out an economic activity

For undertakings established in Malta and Voluntary Organisations carrying out an economic activity, the grant amounts are as stated in the following tabs.

De Minimis Regulation vs General Block Exemption Regulation (GBER)

This scheme is being offered under two different state aid regulations, being De Minimis and GBER. The first regulation to be considered is De Minimis, however enterprises which either are not eligible under such regulations due to their field of operation or which cannot apply under De Minimis due to the applicable thresholds, may apply for the incentive under GBER.

Application of De Minimis Regulation

Under De Minimis Regulation the following grant amounts are available:

Type of vehicle	Grant amount
Pedelecs	€500 per vehicle
Cargo pedelecs L1e-A/B - Powered cycles & Two-wheel mopeds L3e-A1/A2 - Low & Medium performance motorcycle L4e-A1/A2 - Low & Medium performance two-wheel motorcycle with side-car L5e - Powered Tricycle with power not exceeding 15kW. L6e - Light quadricycles or quadri-mobile.	€2,000 per vehicle, capped at 80% of the selling price
L2e - Three-wheel mopeds; L3e-A3 - High-performance motorcycle; L4e-A3 - High-performance two-wheel motorcycle with side-car. L5e - Powered Tricycle with power exceeding 15kW.L7e - Heavy quadricycles or quadri-mobiles	25% of CIF, capped at €6,000 per vehicle
M1 - car N1 - Vans	€11,000 per vehicle
M2 - Minibus N2 - Small Truck	40% of the selling price, capped at €70,000 per vehicle
M3 - Coaches N3 - Trucks	N/A

Application of General Block Exemption Regulation

Under the GBER the following grant amounts are available, except for undertakings active in the fishery and aquaculture sector, in which case the De Minimis regulation shall apply.

Enterprise
Localities

Type of vehicle	Small enterprise	Medium enterprise	Large enterprise
Pedelecs Cargo Pedelecs L1e-A/B - Powered cycles & Two-wheel mopeds L2e - Three-wheel mopeds; L3e-A1/A2/A3 - Low & Medium performance motorcycle L4e-A1/A2/A3 - Low & Medium performance two-wheel motorcycle with side-car L5e - Powered Tricycle. L6e - Light quadricycles or quadri-mobile. L7e - Heavy quadricycles or quadri-mobiles	60% of investment cost, capped at €5,000 per vehicle	50% of investment cost, capped at €5,000 per vehicle	40% of investment cost, capped at €5,000 per vehicle
M1 - car N1 - Vans	60% of investment cost, capped at €20,000 per vehicle	50% of investment cost, capped at €20,000 per vehicle	40% of investment cost, capped at €20,000 per vehicle
M2 - Minibus N2 - Small Truck	60% of investment cost, capped at €70,000 per vehicle	50% of investment cost, capped at €70,000 per vehicle	40% of investment cost, capped at €70,000 per vehicle
M3 - Coaches N3 - Trucks	60% of investment cost, capped at €400,000 per vehicle	50% of investment cost, capped at €400,000 per vehicle	40% of investment cost, capped at €400,000 per vehicle

An additional 5% incentive is also applicable to applicants established in and operating from any of the following localities:

Valletta	Birgu	Isla	Bormla	Floriana
Kalkara	Luqa	Marsa	Paola	Qormi
Birkirkara	Gzira	Pembroke	St.Julian’s	San Gwann
Sliema	Zejtun	Birzebbugia	Kirkop	Marsascala
Marsaxlokk	Safi	Mdina	Zebbug (Malta)	Attard
Dingli	Rabat (Malta)	Mellieha	Mosta	Naxxar
St.Paul’s Bay	Comino	Gozo

The scheme defines the “investment cost” as the difference between the cost of the electric vehicle being registered and that of an equivalent vehicle with a conventional internal combustion engine (ICE).

Moreover, the size of the enterprise is determined in accordance with the SME definition user guide of the European Commission.

Scrappage Scheme

When an applicant acquires an electric vehicle while simultaneously scrapping an existing ICE vehicle that is older than 10 years from the manufacturing date, the following additional incentives apply subject to the satisfaction of prescribed conditions.

Category of Scrapped Vehicle	Place of Registration of Scrapped Vehicle
Category of Scrapped Vehicle	Malta	Gozo
L (Motorcycles)	€500	€500
M1 (Car) or N1 (Van)	€1,000	€2,000
M2 (Minibus)	€30,000	€31,000
N2 (Small Truck)	€15,000	€16,000
M3 (Coach)	€50,000	€51,000
N3 (Truck)	€25,000	€26,000

Such aid is regulated by the De Minimis Regulation in all cases, regardless of whether the grant scheme for the purchase of the electric vehicle is regulated by De Minimis or GBER.

Other considerations

Businesses may consider combining this grant scheme with other forms of aid applicable for the financing of green assets, such as the EERE Financial Instrument. Several considerations apply and it is suggested that specific advice is sought in this respect.

Application requirements

Applications may be submitted by the agent/dealer/supplier or by the purchaser of the electric vehicle. It should be noted that where applications are made under the De Minimis Regulation one needs to also complete the State Aid Declaration form.

A licensed dealer or car agent purchasing any of these vehicles for showroom and sales purposes may apply for the grant but on re-selling such vehicle, the buyer will not be eligible for any grant, including the used grant.

2. New or used Plugin Hybrids, and used Electric Vehicles Grant Scheme

This grant scheme provides support to Maltese businesses, Maltese resident individuals and VOs when purchasing a new or used plugin hybrid vehicle or a used electric vehicle. It also includes a scrappage scheme applicable when the buyer simultaneously scraps a vehicle of any category which is older than 10 years from the manufacturing date.

In a publication issued in May 2022, Transport Malta announced that the scheme is available for vehicles registered in 2023 only to the extent that they were ordered by 31 May 2022 and it was notified of such order by 3 June 2022. In respect of used electric vehicles, where such timelines are not satisfied one may consider eligibility under the grant scheme for Used Electric Vehicles and Conversion of Bicycles to Pedelacs (see further below)

The grant received depends on the vehicle type and category as follows:

Vehicle Type and Category	Grant Amount
New Plugin Hybrid M1 (Car) / N1 (Van).	€11,000
New Plugin Hybrid M2 (Minibus) / N2 (Small Truck).	40% of Invoice value, capped at €40,000
New Plugin Hybrid M3 (Coach) / N3 (Truck).	40% of Invoice value, capped at €200,000
Used Plugin Hybrid/Electric M1 / N1 – Older than one day and not older than 2 months.	€8,000
Used Plugin Hybrid/Electric M1 / N1 – Older than 2 months but and not older than 6 months.	€4,000
Used Plugin Hybrid/Electric M1 / N1 – Older than 6 months but and not older than 36 months.	€2,000
Used Plugin Hybrid/Electric M1 / N1 – Older than 36 months but and not older than 60 months.	€1,000

Depending on the applicant, the maximum number of grants which may be awarded under this Scheme is as follows:

Person residing in Malta: 2 grants;
VOs that do not carry out an economic activity (including NGOs): 10 grants; and
Undertakings established in Malta: 10 grants.

Furthermore, the applicant may also benefit from a scrappage scheme, in addition to the above-mentioned grants. The amount awarded for scrapping the vehicle depends on the category of vehicle and whether such vehicle was registered in Malta or Gozo.

3. Use of LPG as fuel for vehicles Grant Scheme

To promote the use of LPG as fuel for vehicles, Transport Malta has issued this De Minimis grant scheme having a total budget of €60,000, which is applicable to persons residing in Malta and undertakings established in Malta.

The grant amounts to be issued will depend on the category of the retrofitted vehicle and if operated by LPG or petrol or LPG and diesel simultaneously, as follows:

Category	Grant Amount
Petrol-powered Category M1 or N1 vehicle is retrofitted to operate on LPG or petrol	€400
Diesel-powered Category M1 or N1 vehicle is retrofitted to operate with LPG and diesel simultaneously.	€900
Diesel-powered Category M2 or N2 vehicle is retrofitted to operate with LPG and diesel simultaneously;	€1,000
Diesel-powered Category M3 or N3 vehicle is retrofitted to operate with LPG and diesel simultaneously	€1,500

This grant may also be available for persons who have modified their vehicle in the past but did not benefit from any applicable grant schemes in the past, subject to additional criteria/ considerations.

4. New ‘Category L’ Petrol Motorcycles

This grant scheme provides support to Maltese businesses, Maltese resident individuals and VOs when purchasing new petrol category L vehicles. Specifically, this scheme shall support the purchase of mopeds, motorcycles, tricycles, and quadricycles.

It is a De Minimis scheme and has a total allocated budget of €1,300,000.

The amount of grant awarded for each Category L Petrol motorcycle varies between €750 and €1,000 depending on the type of vehicle and vehicle sub-category. The maximum number of grants which may be awarded under this Scheme also varies by type of applicant.

Furthermore, the applicant may also benefit from the scrappage scheme when replacing old vehicles (vehicles classified as ‘L’, ‘M1’ and ‘N1’) which are older than 10 years from the manufacturing date, in addition to the above-mentioned grants. This varies depending on the category of the vehicle scrapped.

5. New wheelchair accessible vehicles

This scheme is available to licensed taxi owners and passenger transport operators. It promotes the use of wheelchair accessible vehicles.

It is a De Minimis scheme and has a total allocated budget of €150,000.

The grant amounting to €10,000 is awarded upon registering of the wheelchair accessible vehicle to be used as a taxi, light passenger transport vehicle or passenger transport vehicle, and scrapping a vehicle which is older than 10 years.

6. Retrofitting of energy-friendly systems on specific vehicles

Transport Malta has also re-launched three incentive schemes aimed at retrofitting energy-friendly systems on different types of vehicles.

(a) Retrofitting of Approved Photovoltaic Panels on Passenger Transport Vehicles

This Scheme promotes the retrofitting of approved PV panels on buses, coaches and minibuses and is applicable for undertakings established in Malta.

It is a De Minimis scheme with a total allocated budget of €50,000.

Aid is given in the form of grant equal to 15% of the investment costs required for installing the panels, up to a maximum of €900 for a Category M3 vehicle (bus or coach) or €450 for a Category M2 vehicle (minibus).

An applicant shall be entitled to a maximum of 10 grants in respect of vehicles used for hire or reward, and 5 grants for vehicles used for private purposes.

Persons who have retrofitted their passenger transport vehicle with PV panels in 2020 and 2021 may still apply for assistance under this incentive scheme.

(b) Retrofitting of DPFs and SCR Systems on Heavy Duty Vehicles

This incentive scheme provides a grant of €10,000 to undertakings established in Malta when retrofitting Diesel Particulate Filters (DPFs) and Selective Catalytic Reduction (SCR) systems on a heavy duty vehicle (with a maximum permissible mass exceeding 3,500kgs), such as buses, coaches, minibuses, trucks and big vans.

It is a De Minimis scheme with a total allocated budget of €100,000.

An applicant shall be entitled to a maximum of 2 grants under this scheme (i.e. a maximum aggregate grant of €20,000).

(c) Retrofitting of Battery Electric Powertrains

This incentive scheme provides support to Maltese businesses and Maltese resident individuals when retrofitting approved battery electric powertrains on passenger cars, vans, goods carrying vehicles, mini-buses, buses and coaches.

It is a De Minimis scheme and has a total allocated budget of €50,000.

The aid under this scheme is awarded at 80% of the investment costs required for the retrofitting of the electric powertrain, up to a maximum of:

(i) €5,000 for a Category L vehicle (motorcycle); or

(ii) €20,000 for a Category M1 or N1 vehicle (cars and vans); or

(iii) €40,000 for a Category M2 or N2 vehicle (minibus and small trucks), or

(iv) €80,000 for a Category M3,N3 or SP1 vehicle (coaches, big trucks and special purpose vehicles).

Each applicant is entitled to a maximum of 1 grant under this scheme.

7. Purchase of Used Electric Vehicles and Conversion of Bicycles to Pedelecs

This incentive scheme intends to promote the use of used electric vehicles (new passenger cars, goods carrying vehicles, quadricycles, motorcycles and pedelecs) which are registered in Malta after 1 January 2022, and is available to persons residing in Malta.

It allows a combination of financial grants for the purchase of used electric vehicles and pedelacs and scrappage of old vehicles, subject to criteria.

The amount of grant awarded depends on the type of new electronic vehicle or pedelec purchased as per the following table, and is in any case capped at the purchase price of the used electric vehicle or the price for the conversion of the bicycle to the pedelac (the latter capped at €400):

Category	Maximum Grant Amount Category L	Maximum Grant Amount Category M 1 or N1
Not older than 3 months	€1,000	€8,000
Older than 3 months and not older than 6 months	€750	€6,000
Older than 6 months and not older than 36 months	€400	€3,000
Older than 36 months and not older than 60 months	€200	€1,000

Furthermore, the applicant may also benefit from the scrappage scheme when replacing old vehicles (vehicles classified as ‘L’, ‘M1’ and ‘N1’) which are older than 10 years from the manufacturing date, in addition to the above-mentioned grants. This varies from €500 to €2,000 depending on the category of the vehicle scrapped and the place of registration of the scrapped vehicle (i.e. Malta or Gozo).

Salient consideration - De Minimis aid threshold

A number of incentive schemes, including some of the grant schemes referred to above, are regulated under the EU’s ‘De Minimis Regulation’. Very broadly, this should mean that the total aid granted in Malta to any single undertaking (as defined) from all De Minimis schemes, should not exceed €200,000 over a three-year rolling fiscal period (€100,000 for single undertakings providing road freight transport for hire or reward).