"Bonus/Malus”¹ – France encourages drivers to buy greener cars

What are the incentives?

A financial reward (bonus) for purchasers of environmentally friendly new cars and a financial penalty (malus) for those buying cars emitting high levels of CO2. This is known as the "bonus/malus" scheme and should not be confused with the “éco-pastille” talked about at the Grenelle Environnement Forum in October 2007, which was a proposal for an annual ecological tax on the most polluting new vehicles, with the proceeds going to financing help for motorists who send their old polluting cars to the breakers and buy clean cars.

The "bonus/malus" scheme announced in December 2007, and now in operation, concerns only new car purchases.

Goal

To speed up the removal from French roads of old polluting vehicles and their replacement by new green ones.

Encourage vehicle manufacturers to develop ever greener vehicles and concentrate their sales efforts on these.

How does it work?

The amount of the bonus or malus depends on the amount of CO2/km emitted by the vehicle. This will be:

- bonus: €200-1,000 for vehicles emitting a maximum of 130g CO2/km and €5,000 for those emitting no more than 60g CO2/km. It will be higher still for even greener vehicles.

- malus: €200-2,600 for those emitting over 160g CO2/km and even more for the least green vehicles.

A super bonus is paid to people sending a car 15 or more years old to the breakers yard and buying a vehicle eligible for the bonus. This could be as much as €300.

The mechanism won’t be an extra burden on households or businesses. The scheme has been designed so that income from the malus strictly matches the cost of the incentives to buy clean cars and so reduces the number of polluting vehicles on French roads.

It will be progressively tightened by lowering the thresholds of eligibility for the bonus and imposition of the malus at a pace allowing manufacturers to adapt their production: 5g of CO2/km every two years.

How will the bonus be paid?

It will be deducted from the price paid to the dealer and must be identified and visible on the bill.

How will the malus be collected?

In France the dealer usually registers new vehicles at the prefecture so he will pay the malus and then add it to the bill under "Registration costs". New owners registering their new vehicles themselves will pay it when they obtain their car registration documents (carte grise).

How many vehicles will it apply to?

Around 31% of new vehicles will be eligible for the bonus, 25% for the malus. The highest malus will apply to only the very polluting gas-guzzling cars (over 250g of CO2/km), which make up only around 1% of new vehicles sold.

The around 44% of new vehicles currently emitting between 130 and 160g CO2/km are not affected by the new measure.

When will it apply?

For the bonus and superbonus: for vehicles ordered on or after 5 December 2007.

For the malus: for vehicles first registered in France on or after 1 January 2008.

For more details (in French)

¹ Bonus is the term the French use in insurance for “no claims bonus” and malus for “surcharge”.