Upon the publication of this much anticipated review, the Forum welcomed the continued focus on Europe’s decarbonisation ambitions in the proposals but cast serious doubts as to whether the revisions would be sufficient to ensure the long-term competitiveness of its ports and the wider maritime sector.

These concerns on the disruption of fair competitive conditions within the shipping and port sectors are more acute in the context of island Member States whose geographical realities have, once again, not been adequately reflected in the design of the reviewed System.

For Malta, this is not merely a question of competitiveness within the shipping and port sectors. Malta’s connectivity is a matter of economic security and social sustainability.  This point was made amply clear in the analysis of Prof Briguglio and his team.  It is most encouraging for the industry to learn that the arguments put forward consistently by the MMF are now supported academically.

Unlike continental Member States, Malta has no road, rail or inland waterway connection with the European continent.  Maritime transport is therefore the principal physical route through which consumer goods, medicines and other basic necessities enter and leave the country.  This dependence is further intensified by the fact that Malta does not produce most of the essential items it consumes and is not food self-sufficient.

The consequences of reduced maritime connectivity would therefore extend far beyond shipping.  They would affect households, businesses, manufacturers, tourism operators and the wider economy.

At the same time, the current design limitations of EU ETS Maritime continue to place Malta Freeport, like other EU transhipment ports in the Mediterranean, at a competitive disadvantage. Mainline container vessels are incentivised to use transhipment hubs outside the EU, including in nearby North Africa, where ETS applies differently or does not apply at all.  The potential savings can amount to millions of euros per service annually.

Since the onset of ETS, several mainliner services have been diverted away from EU ports.  North African facilities have absorbed the lion’s share of new transhipment business to the tune of 8m:0.5m TEUs (Containers – Twenty Equivalent Units).  New investment in the capacity of North African transhipment hubs has dwarfed that taking place in Europe.

If mainliners continue in their increasing trend to tranship elsewhere, calling at Malta solely to discharge or load the relatively small domestic component would not be economically justifiable.

Today, containers linked directly to Malta’s domestic market represent only around 4-5% of the containers transhipped through Malta Freeport.  The loss of the mainline calls that sustain the transhipment operation could therefore have consequences well beyond the Freeport itself.

Malta’s importers and exporters could lose direct connectivity with major global markets in Asia and the United States.  The manufacturing sector would also face increased costs and longer steaming times for importing raw materials and exporting finished products.  This is particularly significant for an economy that has no indigenous raw-material base and whose manufacturing industry produces predominantly for export markets.  Inputs used in the tourism industry would increase in cost rendering one of the Islands’ economic mainstays less competitive.   If Malta becomes more costly and less efficient to serve, the long-term viability of maintaining certain manufacturing and tourism operations on the island could be called into question.

Within the ETS review, the MMF noted the European Commission’s proposed measures intended to safeguard the connectivity of Europe’s most vulnerable regions.  These measures complement the Commission’s recent Communication on Islands and Coastal Communities, which the Forum also followed closely during the course of 2026.  The Forum noted that these measures are limited until 2031 and apply solely to islands that are part of larger member states.

This approach does not suffice for the MMF that has consistently argued that temporary, conditional or narrowly targeted measures cannot fully address a permanent geographical disadvantage.  The Forum therefore maintains that all islands, irrespective of size, together with outermost regions and island Member States, should benefit from a permanent and automatic derogation from ETS on the basis of their geographic disadvantage and insularity. A permanent disadvantage requires a permanent response.

The MMF also notes the Commission’s decision to amend the neighbouring port rule by lowering the relevant transhipment threshold from 65% to 50%.  While this may appear to strengthen the rule, it does not resolve a fundamental difficulty: competing ports in North Africa may not necessarily submit the data required for the threshold to be calculated.

Moreover, public statements by major container lines have made clear their objective of investing in North African terminals specifically for transhipment purposes.   Such facilities may remain outside the new 150-nautical-mile scope of the neighbouring port rule while nevertheless competing directly with EU Mediterranean ports.  This creates the risk of continuing and potentially increasing diversion of transhipment activity.

The Forum continues to emphasise that the neighbouring port rule is ineffective where a vessel simply does not call at an EU port as it traverses the Mediterranean.  Indeed, unless the broader structural imbalance is addressed, the current approach could create a further incentive for shipping companies to divert traffic away from EU ports altogether.

The Malta Maritime Forum is most appreciative of the Maltese Government for its direct involvement in this subject and of all the authorities and dignitaries, both locally and in Brussels, who have met the Forum and listened to its arguments and positions in advance of this review. Their engagement is important, but the process of consultation, analysis and review must continue relentlessly.

To this end, the MMF remains committed to advocating further reform of EU ETS Maritime, including explicit recognition of the particular circumstances of island Member States that depend on ro-ro maritime services as a principal link in their consumer and industrial supply chains. This position has been consistently advanced through the Forum’s numerous policy papers and recommendations.

The objective of decarbonisation must be pursued, but climate policy must also be designed in a manner that does not unintentionally isolate Europe’s islands, weaken their economic resilience or undermine the very connectivity on which their populations and industries depend. Socially sustainable maritime reform requires that Europe’s permanent geographical realities be recognised not as exceptions to be managed temporarily, but as structural conditions deserving permanent solutions.

In conclusion, as Prof. Briguglio argues, sustainable maritime reform must be not only greener but socially sustainable.  The Forum believes that besides socially sustainable, such reform must also serve the national interest.  Malta, as an island state, stands to be disproportionately affected by an ETS review that fails to adequately reflect its unique realities as an island Member State.

Godwin Xerri is the Chairman of the Malta Maritime Forum 

Source: The Malta Independent on Sunday, 30 August 2026

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Almost everything that reaches Malta − fuel, food, medicines, raw materials and consumer goods − arrives by sea. Equally, much of the country’s economic activity is linked to the maritime sector: since Malta has no raw materials, it needs to import all its inputs and export a vast proportion of its manufactured products.

Today, the global shipping industry is facing one of its most challenging periods in decades. Armed conflicts stretching from Ukraine to the Middle East, alongside persistent security threats in parts of Africa, have transformed some of the world’s busiest sea routes into dangerous waters. Merchant vessels, once regarded as neutral carriers of global trade, increasingly find themselves caught in the crossfire.

For the thousands of men and women who crew these ships, the risks have become very real. Missile and drone attacks, piracy, vessel seizures and the constant threat of escalation have turned routine voyages into dangerous missions. Beyond the physical danger, many seafarers face growing psychological pressure as they sail through areas where commercial shipping has become an unintended casualty of geopolitical disputes.

While sea-faring careers are becoming less popular by the day, the consequences extend well beyond those on board.

Several of the world’s most important maritime chokepoints have become increasingly unstable.  The Strait of Hormuz remains vital for global energy supplies, while the Black Sea continues to be affected by the war in Ukraine. Elsewhere, attacks on commercial shipping in the Red Sea have forced many vessels to take much longer routes around the Cape of Good Hope, adding weeks to voyages and significantly increasing operating costs.

These disruptions eventually find their way into household budgets.

Higher insurance premiums, longer sailing distances, increased fuel consumption and operational uncertainty all translate into higher transport costs.

For a country like Malta, which, by necessity rather than choice, must import almost all of what it consumes, these additional costs cannot simply be avoided. While Malta has little influence over global commodity prices or international shipping routes, it must absorb the consequences of decisions and conflicts taking place thousands of kilometres away.

The effects are felt across the economy. Businesses pay more for imported materials, retailers face higher distribution costs, and consumers ultimately encounter increased prices for everyday goods.  All this also renders tourism, one of Malta’s main economic pillar less price competitive.  Energy markets are equally vulnerable. Even when physical supplies remain available, uncertainty alone can trigger price volatility that affects electricity generation, transport and industrial production throughout Europe.

Malta’s position as a maritime nation also brings responsibilities alongside its vulnerabilities. The country’s shipping register represents thousands of vessels trading across every ocean, while the maritime services sector supports a wide network of legal, financial, technical and operational activities. Any prolonged disruption to global shipping, therefore, has implications not only for merchandise trade but also for one of Malta’s most internationally connected industries.

The human dimension should not be overlooked. Behind every cargo ship are professional seafarers who continue to keep global trade moving despite increasingly hazardous conditions. They transport the fuel that powers economies, the grain that feeds populations, the medicine that cures the sick and the products that stock supermarket shelves. Yet their work often receives little public attention until tragedy strikes.

The growing insecurity at sea also serves as a reminder that maritime security is no longer solely a concern for naval forces or shipping companies. It has become an economic issue, a supply chain issue and, ultimately, a matter of national resilience for island states such as Malta.

The reality is that Malta cannot determine the course of international conflicts, nor can it influence global shipping markets or energy prices. Those are external realities that must largely be accepted. What Malta can do is continue strengthening the resilience of its maritime sector, invest in efficient port infrastructure, support international cooperation on maritime security and maintain the competitiveness of the services that have made it one of Europe’s leading maritime jurisdictions.

The sea has always been Malta’s greatest connection to the world. It remains our principal gateway for trade, prosperity and economic opportunity. At a time when global shipping is increasingly under siege, safeguarding the resilience of maritime commerce is firmly in Malta’s national interest.

Godwin Xerri and Kevin J. Borg are the Chairperson and CEO of the Malta Maritime Forum, respectively

Source: Times of Malta/Photo: Shutterstock.com

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The Commission published its review of the EU ETS on 17 July, proposing a number of changes aimed at reducing carbon emissions while addressing concerns raised by the shipping industry over the impact of the scheme on European ports.

MMF Chairman Godwin Xerri said the proposed amendments acknowledge several of the concerns raised by the sector but argued that additional changes will be necessary to ensure the EU’s decarbonisation objectives do not come at the expense of Europe’s maritime competitiveness.

Among the proposals welcomed by the Forum is a temporary reduction in EU ETS allowance-surrender obligations for certain container cargo transhipped through EU ports, including Malta Freeport. The measure would apply until the end of 2035 for inbound voyages from non-EU ports undertaken by container ships with a capacity exceeding 10,000 TEUs, where cargo is transferred to another vessel destined for a non-EU port.

While the exemption would not apply to Malta’s import and export cargo, the MMF said it would help reduce the competitive disadvantage faced by European transhipment hubs when compared with nearby non-EU ports that are not subject to the same emissions trading rules.

According to the Forum, Malta Freeport has come under increasing competitive pressure from ports in North Africa, particularly in Egypt and Morocco, which have significantly expanded their infrastructure and capacity in recent years. Several shipping services have already shifted operations away from EU ports, resulting in non-EU hubs capturing the majority of new transhipment business.

The Commission has also proposed tightening the rules governing neighbouring non-EU transhipment ports by lowering the transhipment threshold from 65% to 50% and broadening the criteria used to identify ports that could benefit from avoiding EU ETS costs.

However, the MMF said these changes do not fully address the issue, noting that the rules become ineffective whenever vessels bypass EU ports altogether.

“The proposed changes represent positive progress in addressing business and carbon leakage resulting from the implementation of the Directive,” Xerri said. “However, the review process must continue to ensure the legislation protects both Europe’s environmental ambitions and the competitiveness of its maritime sector.”

The Forum is also calling for permanent exemptions for island member states and other geographically disadvantaged regions, arguing that their dependence on maritime transport places them at a structural disadvantage.

Xerri said Malta’s insularity makes reliable maritime connectivity essential for both consumers and businesses, and that this should be permanently recognised within the EU ETS framework.

The MMF further urged the European Commission to clarify what would happen should the International Maritime Organization (IMO) introduce a global carbon pricing mechanism for shipping. The Forum believes the Commission should commit to withdrawing the regional ETS regime if a global measure is adopted, thereby avoiding overlapping compliance obligations and additional costs for shipping operators.

The Forum also welcomed proposals to earmark EU ETS revenues for the shipping sector through both national funding and the planned Maritime Transport Decarbonisation Fund.

However, it argued that financial support should extend beyond wind-assisted propulsion and shore-side electricity to include a broader range of technologies capable of improving energy efficiency and reducing emissions across all shipping segments, including short-sea, bulk and tramp shipping.

The MMF said it remains committed to working with the Maltese government, European institutions and industry stakeholders to pursue further reforms to the EU ETS Maritime framework, particularly those recognising the unique challenges faced by island states that rely heavily on maritime links for their supply chains.

Source: Malta Business Weekly

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It was reported that the deal would also extend the ceasefire between the two nations, but challenges remain to ending the war. The deal’s details were not immediately released, but it appeared it would not be implemented until it is signed on Friday.

The war has had an impact on trade in the Gulf region and also on international oil prices. In Malta, fuel and energy prices have remained stable due to Government subsidies, which have been in place since the Covid-19 pandemic, but international oil prices had risen.

Chairman of the Malta Maritime Forum, Godwin Xerri, welcomed the news of the deal. “If the flow of fuel continues on its normal path, the first reaction should be a drop in the price of oil, which will be very positive,” he said.

He also mentioned the positive humanitarian perspective of such a agreement, saying that the seafarers who were stranded in the region would no longer be so.

As for the impact of the war on Malta, “there were some import and export industries affected in the country,” he said. “Hopefully negotiations will be successful and a permanent solution will be found.”

While services operating from the Freeport in Malta were not very negatively impacted to begin with, the opening of the Strait would be good news for the entire shipping industry, Alex Montebello, the CEO of Malta Freeport Terminals, told this newsroom.

“It will bring about an element of normality which we have been deprived of over the past few months in the region. For shipping in general it also means stability in oil prices, which is one of the main cost items for shipping. This augurs well for shipping at large,” he said.

Shipping sector operators also welcomed the news of the deal.

Kurt Camilleri, Managing Director of O&S Shipping Ltd, a Maltese company that provides freight, logistics and relocation services, said that freight costs skyrocketed as a result of surcharges and fuel prices emanating from the war.

The news of the initial deal, he said, means that if the Strait of Hormuz is reopened fuel from the Gulf to the rest of the world will resume as normal. He expects the market to settle, prices to go down, and some trade to pick up after the Strait is opened. “Hopefully it will be back to business as usual.”

Karl Gollcher, an Executive Director at the Gollcher Group, a transportation, logistics, supply chain and storage company, said that if the deal is signed it would help tremendously on the economic side of the shipping industry. Many owners who have ships locked in the Strait would be relieved, he said, adding that if it opens, goods, especially fuel, would move freely affecting market prices.

He hopes that it would be a long-term agreement that holds.

Thomas Sullivan, Commercial Director at Seatrans Shipping Ltd, a multifaceted maritime service organization, said that aside from easing world oil supply prices, a deal would also mean that vessels might start using the Suez Canal again.

“For local market and service providers, this will mean an increase in maritime activity,” Mr Sullivan said. He said operators would likely wait a while to ensure things settle down before doing so.

If that happens, prices will also drop, as instead of vessels going around the Cape of Good Hope, spending 10-12 days extra which increases costs, they would pass through the Suez Canal, he explained.

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The Exclusive Economic Zone Act of 2021, as amended in 2023, provides for the establishment of an exclusive economic zone adjacent to the territorial waters of Malta, outlining Malta’s extensive rights over such a zone. However, to date, no zone has as yet been designated.

The maritime sector in Malta is one of Malta’s main economic pillars. While many associate the maritime sector limitedly with the registration of ships in Malta, in reality, while the Malta flag is the largest flag in Europe with some of the most prestigious and important fleets in the world registered in Malta, maritime Malta is much, much more.

It encompasses every conceivable maritime activity, including the registration of ships, from transhipment to ship repair, from yachting to maritime education, from providing supplies and provisions to ships to arranging for crew changes, from pilotage to cruise line operation, from inter island transportation to towage to bunkering, from the provision of international fast ferry services to ship agency and ship management and crewing.

All of these sectors supported by highly experienced professional teams of maritime lawyers, corporate service providers, marine surveyors, technical experts and naval architects.

One of the reasons why the maritime sector is second nature to Malta is due to the fact that we are an island bang in the middle of the Mediterranean equidistant from Suez and Gibraltar and the shores of Sicily and North Africa. Malta is directly on the rum line between Suez and Gibraltar and, therefore, Malta is a hugely convenient stop for vessels wishing to take on supplies en route without needing to deviate from the contractual route in a business where the slightest deviation means additional sailing days and money.

Whether it is provisions, fresh water, crew changes, awaiting instructions for onward voyages or bunkering, Malta is, therefore, extremely convenient and has made a very good name for itself.

In addition to its prime geographical location, the deep waters surrounding Malta shallow to the southeast at an area referred to as Hurd’s Bank on our 12-mile territorial limit where ships can actually drop their anchor and procure their maritime services from Malta without having to come into harbour.

So, the very idea of having an LNG terminal, a fuel hub, out at Hurd’s Bank is not only highly commendable but it is precisely the type of important additional activity which Malta needs and requires. As a leading maritime nation there is the expectation that the country continues to develop its maritime space and this project has succeeded in getting the entire maritime community to be hugely supportive and enthusiastic about it.

The idea of having an LNG terminal which can in future adapt to take on other green fuels is ingenious for a number of reasons.

Currently, Malta provides the location for the bunkering of conventional fuels – this has been going on at Hurd’s Bank for decades. However, at the moment no vessel which runs on LNG can actually bunker off Malta because there is no LNG bunkering capability. LNG, although a fossil fuel, is considered as the greenest of fossil fuels and is the least pollutant, which is why a number of new builds now run on LNG.

Furthermore, decarbonisation of the maritime space has been the talk of the town in Europe, at other regional levels and at an international level, principally the IMO, for many, many months and we have seen the introduction of the EU ETS and similar measures by other regions quite apart from the extensive discussion at the IMO on the Net Zero framework. Commercial shipping is seriously gravitating towards cleaner fuels and alternative green fuels including, for instance, methanol and ammonia.

Thus, a terminal off Malta, the Mediterranean Fuel Hub, at Hurd’s Bank, which can act as an LNG provider to other bunker suppliers who will supply ships with LNG or as an LNG provider to vessels carrying LNG as cargo, is clearly a concept that will take Malta and maritime service providers in Malta to another highly desirable level.

The entire project would be within Malta’s EEZ, regulated by Maltese law and monitored by an appropriate entity.

This is precisely the type of quality project which an already highly enterprising and hard-working maritime community in Malta strives for.

This is precisely the type of development which the maritime industry requires and deserves and, thus, it is no surprise at all that this visionary concept has met with such a great degree of approval and enthusiasm.

In addition to the above, a further bonus is that, as a result of the placing of a Floating Storage Regasification Unit (FSRU) at the terminal at Hurd’s Bank, LNG can be piped via undersea cables as gas directly from the terminal at Hurd’s Bank to the power station at Marsaxlokk.

This would immediately eliminate the Floating Storage Unit currently moored inside Marsaxlokk with all the obvious health and safety risks to the entire population of Marsaxlokk, which should never have been there in the first place.

In conclusion, Malta should not miss out on this resounding opportunity of a Mediterranean Fuel Hub. It is the type of vision we need.

by Dr Ann Fenech,  Partner at Fenech & Fenech Advocates, President of CMI and  Member of the MMF BOD

Source: This article appeared in the Times of Malta

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The forum stressed that EU policies should better reflect Malta’s island-state realities.

The document argues that the maritime industry should no longer be treated as a supporting sector but as a strategic economic pillar central to Malta’s future growth and resilience.

The forum pointed to growing geopolitical instability, digitalisation and decarbonisation pressures reshaping the global shipping landscape.

At the centre of the forum’s proposals is the re-establishment of a National Maritime Authority, a long-standing recommendation which it believes would improve coordination, speed up decision-making and provide clearer direction for the industry.

The MMF also called for the appointment of a minister specifically responsible for maritime affairs, alongside a permanent interministerial structure to ensure coordination across government departments.

The forum said Malta needed a “more maritime-centred approach” to economic and social development if it wanted to fulfil the targets outlined in the government’s Vision 2050 strategy.

A major focus of the manifesto is the creation of a National Maritime Transport Strategy to guide investment, competitiveness and decarbonisation efforts over the coming years.

According to the forum, the strategy must align not only with Malta Vision 2050 but also with emerging EU maritime regulations and the European Commission’s own developing maritime strategy.

The MMF said this alignment was necessary to ensure Malta remained competitive within the wider European maritime framework while continuing to attract investment.

The forum also warned that labour shortages were becoming increasingly problematic for the sector and called for urgent reforms in education and training.

Among its proposals is the establishment of a National Maritime Certification Centre aimed at simplifying career pathways and increasing the number of Maltese-issued Certificates of Competency.

Expanded port facilities

Infrastructure investment is another key priority identified by the forum, which called for expanded port facilities, logistics hubs and new fuel bunkering infrastructure.

Particular emphasis was placed on the long-delayed Ras Ħanżir project, with the MMF urging the next administration to ensure the planned 365-metre quay becomes operational before works linked to the Grand Harbour Revival Plan begin.

The forum also reiterated calls for a full Nautical Risk Assessment to ensure that commercial port activity within the Grand Harbour is protected and strengthened during future redevelopment projects.

The manifesto further stresses the need for stronger regulation and enforcement to safeguard Malta’s international reputation within the maritime industry.

Concluding its proposals, the forum warned that Malta was facing a “crucial juncture” as global shipping undergoes rapid transformation.

Source: Times of Malta; Picture: Shutterstock

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Over the past decade, the Forum has evolved into an influential policy partner, shaping national and European discussions that directly impact the sector. This ten-year milestone represents a moment to reflect on how far the industry has come and how it must now prepare for an era defined by environmental, technological and geopolitical change.

The most transformative developments of the past decade have extended beyond the growth of Malta’s ship registry, MMF the leadership said. The significant rebound of the Valletta Cruise Port from COVID, the Freeport’s expansion, the regeneration of the ship repair facilities, and many other success stories in industry, and the continued global prominence of the Malta Flag are some of the successes of the maritime industry, which has established itself as a key contributor – though not always   publicly acknowledged – towards the Maltese economy.

Yet, the Forum’s leadership said they recognise that the country’s future depends on expanding beyond registration to build a broader maritime services cluster to include ship management, financing, crewing and specialised logistics. The industry’s potential lies in value creation through integration rather than dependence on any single area of activity.

The Forum’s collaborative model, bringing together ship owners, port operators, agents and service providers, has also proven instrumental in shaping national policy, the MMF said. By providing government with a unified industry position on issues ranging from port competitiveness to climate adaptation, the MMF has strengthened the quality of consultation and policymaking.

At EU level, the Forum has been active in discussions on environmental regulation, particularly around the Emissions Trading System (ETS) and other decarbonisation initiatives. Its technical input has ensured that Malta’s perspectives as a small maritime state are heard in broader European debates.

As the global maritime industry faces accelerating regulatory obligations, the Forum believes Europe must seek to strike a careful balance between sustainability and competitiveness. The MMF is not against decarbonisation, it is against the regionality of the ETS scheme which has created a disproportionate impact on smaller, island ports in the Mediterranean.

For years, we were able to compete on efficiency and quality, despite Northern African ports already enjoying lower operating costs. “It is not an issue of fearing competition. We never had any issue about being part of a competitive market,” the MMF said. But ETS presents existential challenges on various levels. The reality is very simple: if the ETS scheme continues to be imposed exclusively on European ports, there is no way that those ports in  proximity to competing non-EU hubs can compete.  Ships will simply choose North African ports, where they are able to save millions in costs.

The Forum is therefore urging the government to work more closely with like-minded EU member states, particularly from Southern Europe, to push for fairer measures at EU level. Environmental obligations cannot come at the expense of people and jobs. That cannot be right, the Forum said. Moreover, in the wake of the Russian invasion of Ukraine and the US’s isolationist policies, the EU has spoken a lot about defending its industries from unfair competition as well as about the need for strategic autonomy. Yet the MMF fears that with such move, Europe will end up losing control of supply chains, and “we will end up depending on other countries to keep our goods coming in.”

The MMF’s tenth anniversary comes at a moment of strategic reflection for Malta’s maritime community, chairman Godwin Xerri said. This reflection is also timely from a national perspective, as Malta shapes its Vision for 2050 and defines the pillars that will sustain future growth.

Encouragingly, there appears to be broad political consensus on the need to transition from a labour-intensive model to one driven by higher value-added sectors, and the maritime industry stands out as a natural fit for this shift, offering both the scale and sophistication to anchor Malta’s next phase of economic development. It is also very positive that more often than note, this industry has not been characterised by political division, rather there has been ample convergence between the major parties on maritime issues.

The Forum views the forthcoming maritime strategy as a defining opportunity to chart a clear and practical course for the next generation of maritime policy. “We take great pride in being recognised as the industry’s principal interlocutor, a role underscored by the fact that both the decision to develop this strategy and its initial details were first announced at MMF events. This stands as a strong testament to the Forum’s influence, credibility and sustained contribution to the sector,” Xerri said.

It is a feather in our cap that the government’s consultation process drew heavily on our members’ feedback, he added. But we now need to move from recognition to action. The industry has a clear vision, but its members cannot be expected to deliver the strategy alone. Infrastructure, education and regulation all fall within the public domain, Xerri said.

Asked how the Maltese industry is adapting to technological changes, MMF vice-chairman Alex Montebello said We must plan for the industry’s needs today and anticipate what it will require tomorrow. Technology is redefining the way ports operate. At the Freeport, we have already seen how semi-automation and remote-operated equipment are reshaping the skill set required.

MaritimeMT’s training simulators, used by pilots to replicate navigation in the Grand Harbour and the Port of Marsaxlokk, demonstrate Malta’s capacity to deliver high-quality maritime training. This facility is not just a resource for local seafarers, it is used for research and operational planning by major shipping lines before attempting high risk, real-life manoeuvres.

It shows that Malta can be at the forefront of maritime education if we continue to build on this foundation. Yet the sector still faces a shortage of seagoing professionals. It is regrettable that a cadet struggles to find a placement on board a ship, he said.

The Forum’s strength lies in its ability to unite a highly diversified industry around common objectives, MMF CEO Kevin J. Borg said. “Our members range from terminal operators to bunker suppliers, towage operators to logistics companies and consultants to ship repairers. Yet they all share one belief that Malta’s maritime future depends on dialogue, evidence, and policy consistency,” he said.

The Forum’s work goes well beyond advocacy. It acts as a technical partner to the authorities, ensuring that recommendations are both fact-based and implementable. Our success is measured not only by the policies adopted but by the trust our members place in us to represent their interests responsibly, Borg said.

For example, we have contributed actively towards green transition policies such as the EU’s Renewable Energy Directive (RED III) and new fuel standards. We are fully in favour of decarbonisation, but the way these rules are being implemented is flawed. “Without proper infrastructure and supply of compliant fuels, we risk driving business away from Malta rather than making it greener,” he said.

Looking ahead, the Forum’s first decade has been one of unity and consolidation; the next must be one of innovation and strategic diversification, the leadership said. The maritime industry can no longer rely solely on traditional strengths but must embrace new opportunities in technology, education, and green energy. The MMF’s role will continue to be that of a bridge, linking policy ambition with practical industry realities to secure Malta’s position as a leading maritime hub in the Mediterranean.

Source: The Malta Business Weekly

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Maritime affairs in Malta remain fragmented, often leading to misalignment or policy gaps, he said in an interview with The Malta Independent on Sunday on the occasion of the forum’s 10^th anniversary.

Being part of Transport Malta, with a daunting span of responsibilities already, the maritime industry is not getting the focus it deserves and needs to grow, he said. The forum has long advocated for the establishment of a dedicated maritime authority to bring together policy, infrastructure and education under a single umbrella. Such an entity – which used to exist until 2010 when it was incorporated into Transport Malta – would help ensure consistency and long-term focus in decision-making.

Secondly, we need to identify new niches for growth within the industry. While Malta hosts one of Malta’s largest ship registers, other countries have turned maritime activity into a full-fledged industry generating value through ship management, financing, and crewing services.

We need to ask why certain sectors are not locating here and what legislative or fiscal adjustments can attract them, Xerri said. We should create a level playing field not just for registration, but for the entire maritime ecosystem.

The Forum is conducting a second economic study to follow up on a report it had carried out in 2021. The aim is to identify the segments that can deliver the strongest multiplier effect for the Maltese economy. “We will be sharing its results hopefully by next year. The maritime sector is still taken for granted as if it requires little or no policy and support. Yet few other industries can generate so much strategic and economic value across so many linked activities,” Xerri said.

As the Malta Maritime Forum marks its tenth anniversary, the forum believes that its role as the unifying voice of Malta’s maritime industry has never been more relevant. Over the past decade, the Forum has evolved into an influential policy partner, shaping national and European discussions that directly impact the sector. The MMF believes this ten-year milestone represents a moment to reflect on how far the industry has come and how it must now prepare for an era defined by environmental, technological and geopolitical change.

The most transformative developments of the past decade have extended beyond the growth of Malta’s ship registry. The significant rebound of the Valletta Cruise Port from COVID, the Freeport’s expansion, the regeneration of the ship repair facilities, and many other success stories in industry, and the continued global prominence of the Malta Flag are some of the successes of the maritime industry, which has established itself as a key contributor – though not always publicly acknowledged – towards the Maltese economy.

Yet, the Forum’s leadership recognises that the country’s future depends on expanding beyond registration to build a broader maritime services cluster to include ship management, financing, crewing and specialised logistics. The industry’s potential lies in value creation through integration rather than dependence on any single area of activity.

The Forum’s collaborative model, bringing together ship owners, port operators, agents and service providers, has also proven instrumental in shaping national policy, the MMF leadership said. By providing government with a unified industry position on issues ranging from port competitiveness to climate adaptation, the MMF has strengthened the quality of consultation and policymaking. At EU level, the Forum said it has been active in discussions on environmental regulation, particularly around the Emissions Trading System (ETS) and other decarbonisation initiatives. Its technical input has ensured that Malta’s perspectives as a small maritime state are heard in broader European debates.

As the global maritime industry faces accelerating regulatory obligations, the Forum believes Europe must seek to strike a careful balance between sustainability and competitiveness. The MMF is not against decarbonisation, it is against the regionality of the ETS scheme which has created a disproportionate impact on smaller, island ports in the Mediterranean.

For years, we were able to compete on efficiency and quality, despite Northern African ports already enjoying lower operating costs. It is not an issue of fearing competition. We never had any issue about being part of a competitive market. But ETS presents existential challenges on various levels. The reality is very simple: if the ETS scheme continues to be imposed exclusively on European ports, there is no way that those ports in proximity to competing non-EU hubs can compete.  Ships will simply choose North African ports, where they are able to save millions in costs.

The Forum is therefore urging the government to work more closely with like-minded EU member states, particularly from Southern Europe, to push for fairer measures at EU level. Environmental obligations cannot come at the expense of people and jobs. That cannot be right. Moreover, in the wake of the Russian invasion of Ukraine and the US’s isolationist policies, the EU has spoken a lot about defending its industries from unfair competition as well as about the need for strategic autonomy. Yet the MMF fears that with such move, Europe will end up losing control of supply chains, and “we will end up depending on other countries to keep our goods coming in”.

Seafaring careers

MMF deputy chairman Alex Montebello said seafaring careers must be promoted more actively. Most importantly, we must work together to highlight the wide range of exciting opportunities which exist in the industry, and these opportunities are not just about working at sea.

“Actually, that is just a fraction of this industry,” he said. “The maritime industry today needs engineers, technicians, lawyers, IT specialists, and many finance professionals.”

The latter can actually be a whole niche industry in itself, ships cost a huge amount of money, and in that sense, ship financing and insurance generate billions of revenue around the globe.

“We have already made strides in the educational field, including the establishment of a Master’s degree in Port Management and Logistics, developed through collaboration between the Universities of Malta, Cadiz, Gdansk and the Algarve. This is an important step forward, but we now need a coordinated national approach to align vocational and academic pathways with the industry needs,” he said.

Alternative fuels

MMF CEO Kevin J. Borg said one of the biggest challenges facing the shipping industry today is uncertainty over which alternative fuels will ultimately become the global standard for decarbonised operations. The industry largely plays a waiting game for the outcome of research taking place at the global level which remains inconclusive as to which technology and fuel will prevail in the future.  Indeed, this uncertainty has created dilemmas to ship owners who are currently ordering ships (with production lags lasting until 2027 or beyond).

The cost of a new vessel is exorbitant, and the risk of future obsolescence is very high for fleet-owners. The MMF calls repeatedly for direction for the industry which is vast and diverse. Few acknowledge the extensive and lengthy process of coordination which is required amongst the key stakeholders involved in the decision.  These include ship-owners, charterers, ship-builders, port operators, port services, providers of navigation control systems, fuel and bunker suppliers and other stakeholders in the fuel distribution network, builders of propulsion systems, training institutions, law makers, insurers, financiers and others.

That said, the MMF believes it is of key importance for Malta to explore the possibilities of new more advanced fuels because until the authorities make the necessary legislative changes and support the transformation with adequate support to industry players, Malta will continue to lose precious business to other ports elsewhere.

The Forum, he said, is also lobbying for targeted investment in maritime infrastructure. If we want to attract the latest vessels, we must ensure that our ports are equipped to accommodate their technological and environmental needs. Otherwise, we will lose both competitiveness and opportunity.

In this context, we welcome the government’s announcement, in Budget 2026, in favour of land reclamation for maritime infrastructural projects that are designed and operated by industry stakeholders. Naturally this must be accompanied by extensive economic and environmental impact assessments, he said.

Source: The Malta Independent on Sunday

The second part of the interview will be carried in The Malta Business Weekly on Thursday

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Executive Summary

Malta, as an EU, Island Member State continues to be exposed to disproportionate risk to its international connectivity and consequent economic wellbeing under the current extension of the European Union Emissions Trading System (EU ETS) to maritime transport.

This paper presents an urgent, evidence-based call for the dismantling of the EU ETS regime and its substitution with the International Maritime Organization’s Net Zero Framework (IMO NZF).  The analysis demonstrates that the EU ETS, unenforceable in competing non-EU ports proximate to Malta, has triggered unfair competition, business and carbon leakage, and market distortions that undermine the EU’s own climate and economic objectives. Only a single, globally harmonized regulatory framework can ensure fair competition, effective decarbonisation, and the preservation of Malta’s—and Europe’s—maritime competitiveness.

Introduction

The extension of the EU ETS to maritime shipping was intended to accelerate decarbonisation within the sector and catalyze global action. However, the adoption of the IMO Net Zero Framework (NZF) marks a pivotal moment for international climate governance in shipping, offering a comprehensive and globally coherent approach. As the EU and IMO authorities prepare for formal adoption of the NZF, it is imperative to reassess the regional measures that threaten the viability of EU and, in particular, Maltese maritime interests. Malta’s dependence on seamless maritime connectivity for trade, economic resilience, and supply-chain integrity makes it uniquely vulnerable to the competitive imbalances and inefficiencies generated by the current EU ETS regime.

Malta’s Maritime Connectivity: Strategic Importance and Risks

Malta is an island economy and a sovereign State.  In the absence of any natural resources except its people, it relies on efficient maritime links to sustain itself and to generate economic activity.   This disproportionate reliance and Openness to Trade are highlighted in the Table below.

Table 1

Source : World Bank. For Trade Openness the latest data available is 2024 (Trade % GDP) while the data for the Container Port Traffic (TEU: 20 foot equivalent units/Population), the most recent data available is from 2022.

Over the years, the Islands have managed to attract widespread global maritime connections to 110 ports worldwide provided by the world’s 5 major shipping carriers attracted to the Malta Freeport and the critical mass it generates through its high volumes of transshipment traffic.  These routes translate into competitive sail-times and freight rates for Maltese importers, manufacturers and exporters whilst contributing to the robustness of European supply chains.

The global maritime connections enjoyed by Malta and its economy exist only because of the efficiencies and throughput of the Malta Freeport which typically stands at 3million TEUs per year.  Of this, only 134K TEUs are destined for domestic use.  Such a small proportion does not economically justify a stop-over in Malta using mega-carriers thereby placing the maritime connections Malta currently enjoys at great risk if shipping lines decide to re-route elsewhere due to EU ETS.

The continued imposition of EU ETS on maritime transport would therefore prolong and extend the disproportionate risk to Malta’s connectivity.  A retention of EU ETS (over and above other similar levies) on ships calling at EU ports—including Malta— will continue to incentivise (a) the redirection of shipping routes and port calls outside of the EU and (b) further investment in transshipment capacity outside the EU.  This would seriously undermine Malta’s connectivity upon which depends its economic and social wellbeing, threatening “Quality Jobs” which the EU is currently promoting through its Roadmap.

Unfair Competitive Conditions: The Non-EU Port Advantage

The competitive disadvantage imposed by the EU ETS is especially acute for Malta due to its proximity to rapidly expanding North African transshipment hubs. Ports in Egypt and Morocco, such as Abu Qir, Damietta, Alexandria, Tangier Med, and Nador West Med, are not subject to the EU ETS if ships are calling or proceeding from/to other non-EU ports.  On the other hand, if ships are calling or proceeding from/to EU ports, they are liable to pay 50% of the cost.  These non-EU ports and have attracted significant investment from European shipping companies seeking to avoid the added costs of the ETS.  These non-EU ports offer substantial savings—estimated at €13 million to €35 million per shipping service per year—making them highly attractive alternatives for transshipment. The inability to enforce the EU ETS beyond EU jurisdiction creates a regulatory asymmetry that distorts competition, erodes the market share of EU ports and directly undermines Malta’s maritime sector.

Evidence of Business and Carbon Leakage

Empirical evidence underscores the reality of business and carbon leakage resulting from the EU ETS. Since the regime’s implementation, several major shipping lines have restructured their Mediterranean operations to favor non-EU ports:

• On January 15, 2025, Maersk shifted its MECL service from Algeciras (Spain) to Tangier Med (Morocco), marking a significant reorientation of regional logistics.
• Maersk APM and Hapag Lloyd announced a strategic collaboration (Gemini Cooperation) launching in February 2025, leveraging Tangier Med’s capacity.
• The Alliance (Hapag-Lloyd, ONE, Yang Ming) adjusted its Asia–North Europe FP1 service in December 2023 to include Damietta (Egypt).
• Evergreen has declared that, from 2026, Abu Qir (Egypt) will replace Piraeus (Greece) as its primary transshipment hub, with further service expansions planned for 2027.

These shifts are not isolated incidents; rather, they reflect a broader pattern of investment and operational realignment that disadvantages EU ports, including Malta, while failing to deliver genuine emissions reductions. The same ships, now calling at non-EU ports, continue to traverse the Mediterranean, often emitting more carbon due to increased feedering and longer routes. Despite this, the European Commission’s own reporting has not fully acknowledged the scale of these changes, though it concedes that its analysis has limitations and should be interpreted with caution.

Regulatory Overlap and Market Distortion

The coexistence of regional measures such as the EU ETS and FuelEU Maritime with the emerging global IMO NZF would create a fragmented regulatory landscape. This overlap would lead to double payments, heightened administrative complexity and regulatory uncertainty for shipping companies operating in and out of Malta or any other EU port. It also increases the risk of market distortions and business leakage, as companies restructure their operations to avoid EU-specific costs. Such outcomes threaten the competitiveness, cohesion, and socio-economic resilience of Malta and the wider EU maritime sector, directly contravening the EU’s stated principles of fair competition and de-risking.

Call for Harmonisation: The Case for the IMO Net Zero Framework

The adoption of the IMO Net Zero Framework presents a unique opportunity to achieve regulatory harmonisation and restore a level playing field in maritime decarbonisation. Malta, through the Malta Maritime Forum, strongly urges the European Commission and EU Member States to support the formal adoption of the NZF and commit to withdrawing regional measures like the EU ETS and FuelEU Maritime. A single, predictable international regime is indispensable for fair competition, effective emissions reduction, and the long-term sustainability of global shipping. Such harmonisation would also minimize the risk of double taxation, reduce administrative burdens, and prevent further business and carbon leakage.

Recommendations

1. Immediate Alignment: The European Commission and EU Member States should unequivocally support and formally adopt the IMO Net Zero Framework at the forthcoming MEPC meeting, ensuring that it supersedes existing regional measures.
2. Withdrawal of Regional Schemes: Upon adoption of the IMO NZF, the EU should withdraw the maritime extension of the EU ETS and FuelEU Maritime, eliminating regulatory overlap and restoring competitive parity for EU ports, including Malta.
3. Safeguards for Malta: The EU should implement targeted measures to safeguard Malta’s maritime connectivity and economic resilience during the transition, including monitoring for business and carbon leakage and providing support for affected sectors.
4. Ongoing Evaluation: The European Sustainable Shipping Forum (ESSF) should conduct regular assessments of the impacts of regulatory changes on EU maritime competitiveness, with particular attention to island and peripheral Member States.
5. Global Engagement: The EU should intensify engagement with IMO and international partners to ensure robust enforcement and continuous improvement of the Net Zero Framework, fostering true decarbonisation without sacrificing economic vitality.

Conclusion

Malta’s unique vulnerability as an island nation at the crossroads of global trade underscores the urgent need for a coherent, fair, and effective regulatory framework for maritime decarbonisation. The current EU ETS regime, by fostering unfair competition and leakage, threatens Malta’s connectivity and economic security while failing to deliver its intended climate benefits. The impending adoption of the IMO Net Zero Framework offers a viable path forward—one that harmonizes global action, safeguards competitiveness, and upholds the EU’s climate and economic objectives.

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In its statement, the MMF highlighted Malta’s strong maritime position but emphasized the need for “a national authority solely responsible for the maritime sector” to ensure the industry’s long-term growth and sustainability.

The forum said it looks forward to collaborating with authorities on measures that align with a shared vision for the sector – particularly those encouraging a greater shift of cargo transport from road networks to sea routes.

Among its proposals, the MMF expressed support for the introduction of a roll-on/roll-off service connecting the Malta Freeport and Gozo, with possible stops at the Grand Harbour and northern Malta. This service, it said, would help reduce road congestion and pollution while enhancing logistical efficiency.

The forum also welcomed the budget’s attention to “matters of prime maritime importance,” noting that several of its own recommendations – such as continued fuel subsidies, the establishment of a free-trade zone, and the exploration of land reclamation projects – had been acknowledged.

It particularly commended Finance Minister Clyde Caruana’s endorsement of a free-trade zone aimed at positioning Malta as a regional logistics hub, calling the initiative “a strong opportunity to attract investment.”

While cautiously supporting land reclamation, the MMF stressed that such projects must be “grounded in comprehensive studies” addressing maritime safety, environmental impacts, and economic feasibility to ensure they contribute positively to the sector’s development.

This article appeared on the Malta Independent

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