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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The Forum welcomes the Minister’s announcement in favour of the setting up of a free-trade zone to serve as a regional logistics hub.  This initiative is consistent with Malta Vision 2050 and has the strong potential of attracting lucrative business and investment from multinational players whilst contributing to consolidate Malta’s position as a centre of excellence in regional trade.

The Forum also noted Government’s declared position in favour of land reclamation for maritime infrastructural projects that are designed and operated by industry stakeholders.  Over the years, the MMF has recognised that land reclamation initiatives have, on the whole, given significant momentum to Malta’s maritime industry and, by extension, brought economic benefits to the country. Looking ahead, the MMF maintains that decisions on similar projects should be firmly grounded in comprehensive studies, including:

• a shipping traffic risk and impact assessment
• an environmental impact assessment
• an economic impact assessment

The Forum welcomed Government’s decision to continue to cushion the economy from the volatility in the cost of fuel and energy at an international level.  This is a positive development in terms of safeguarding the competitiveness of local operators in a fiercely competitive regional market given that fuel and energy are important elements in the cost-structures of maritime business operations over a number of sectors not least transport, logistics, terminal operations, ship repair and ship services.

The MMF looks forward to engaging in consultation and cooperation with the authorities on further initiatives that reflect a shared vision, including those designed to shift a greater portion of road traffic to waterborne transport. In particular, the Forum supports the introduction of a Ro-Ro cargo service between Malta Freeport and Gozo, with potential stop-overs in the Grand Harbour and the north of Malta, with the aim of:

• alleviate traffic on Maltese roads from Birzebbuġa, the Inner Harbour areas and Ċirkewwa, and
• reduce emissions of harmful CO₂ pollutants due to lower generation of CO₂ per tonne-mile generated by one ship compared to multiple trucks.

In conclusion, the MMF recognises the Industry’s strong position whilst acknowledging the severe challenges.  It believes that through open dialogue and by uniting around shared vision and objectives, Malta can ensure that its maritime industry continues to thrive, delivering economic, environmental, and social benefits for generations to come.  That said, the MMF continues to believe strongly that the future needs of the Industry would be better served with a dedicated national authority solely responsible for the Maritime Sector.

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Few nations in Europe are as closely tied to the sea as Malta. Our maritime legacy stretches back centuries and remains at the core of our identity and economy.

Strategically located on the main shipping route across the Mediterranean, Malta assumes a vital position in global maritime logistics, boasting one of the largest merchant fleets in the world and a ship repair industry that serves commercial vessels and superyachts across the Mediterranean, besides a vast array of professional services that complement the islands’ crucial terminals for cargo and passenger movements.

This is not just Malta’s challenge − it is Europe’s too. Shipbuilding and ship repair across the EU have for years been undervalued and under-supported, leaving European yards struggling against heavily subsidised competitors in Asia. At the same time, Europe is facing growing geopolitical instability, fragile supply chains and urgent decarbonisation targets.

This makes investment in Europe’s own maritime manufacturing base, including repair and retrofitting yards like those in Malta, more essential than ever. These facilities are not simply commercial assets: they are critical infrastructure that supports the continuity of maritime trade, contributes to energy security and safeguards Europe’s industrial sovereignty.

The challenge of decarbonisation

The push to decarbonise shipping is both a challenge and an opportunity. Shipyards are at the heart of this transition. From retrofitting vessels to run on cleaner fuels like LNG, methanol or hydrogen, to installing cold-ironing facilities that cut emissions while ships are in port, ship repair yards play a central role in the green transition.

Maltese yards are already engaged in these projects, fitting ships with new propulsion systems, energy-efficient hull designs and emissions-reduction technologies. But scaling up requires investment. Currently, EU support is skewed towards new shipbuilding or prototype R&D, leaving repair yards − where much of the actual decarbonisation work happens − at a disadvantage.

For Malta, unlocking EU funds for retrofitting and repair could turn the island into a Mediterranean hub for green marine services, attracting new economic activity while supporting Europe’s climate goals.

The digital revolution

The Forum consistently holds that there can be no decarbonisation without digitalisation. So from predictive maintenance, powered by artificial intelligence, to augmented reality for ship inspections, digital tools are transforming maritime operations.

Maltese companies are making strides in this direction. Once again, however, smaller and mid-sized yards face barriers in accessing innovation funding. A more inclusive EU framework for digitalisation would allow Malta’s shipyards to modernise faster, improve competitiveness and offer high-tech career opportunities.

The skills gap

Talent and skills remain perhaps the most challenging issue. The industry is facing an acute shortage of skilled workers in all traditional trades and marine engineering, while the transition to low-emission, digital-first vessels requires entirely new skillsets.

Malta is not immune. Despite our heritage, it is unfortunate that only few young people consider the maritime sector as an attractive career path. A stronger emphasis on “blue skills” in the education system, better linkages between industry and academia, and more EU-supported training schemes are needed to ensure we have the workforce to meet tomorrow’s challenges.

Fair competition and sustainability

Historically, European shipyards benefitted greatly from their geographic advantage − much of Europe’s coastline is surrounded by sea, providing natural access to maritime trade routes, skilled labour and a long-standing naval tradition. This, combined with regional cooperation and government support, helped establish Europe as a leader in shipbuilding and ship repair.

However, in the modern era, the industry faces intense global competition, particularly from Asia, where shipyards often benefit from lower labour costs, larger scale production and strong state backing.

European shipyards now operate in a highly standardised and heavily regulated environment − which, while establishing sustainability and promoting quality – same comes with a price.

To ensure these European yards remain viable in a highly standardised and regulated industry, Europe must provide strategic assistance − through targeted subsidies, innovation incentives and policy support − to help them compete fairly while upholding the highest possible standards.

If Europe is serious about sustainability, it must strengthen its ship recycling policies, keep dismantling within Europe and support its own yards with the funding and infrastructure to compete fairly.

The importance for Malta

In Malta, the ship repair has traditionally taught skills, generated jobs, attracted foreign investment and sustained related industries from logistics to tourism. By investing in leading-edge infrastructure, skills and innovation, Malta can position itself as a leader in sustainable maritime services.

This presents a possibility not merely to preserve a vital component of our heritage but also to renew it for a new era of digitalisation, decarbonisation and maritime success.

A call for support

The Malta Maritime Forum recently took advantage of the opportunity to contribute its views to the European policy initiative aimed at strengthening the competitiveness, sustainability and resilience of Europe’s waterborne manufacturing sector. Here the forum insisted for the ship repair and related services to be fully recognised as strategic priorities at EU and national levels by:

• Expanding EU funding to cover retrofits and repair, not just new builds;

• Supporting yards investing in offshore renewable energy infrastructure;

• Facilitating access to innovation funds for SMEs and mid-sized shipyards;

• Enhancing training and education partnerships to address the skills gap; and

• Introducing fair ship recycling rules to keep business − and jobs − in Europe.

Malta may be small but its maritime sector punches far above its weight when afforded the right support. With strategic investment, our shipyards can become a Mediterranean hub for green retrofitting, offshore energy support and advanced maritime services − delivering not only for Malta but for Europe as a whole.

Joseph Calleja is a board member of the Malta Maritime Forum and the general manager of Palumbo Shipyards − Malta.

Source: Times of Malta

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Should the IMO framework be adopted, the MMF encourages the European Commission to ensure there is maximum alignment between the IMO framework and existing EU policies such as FuelEU Maritime and the EU Emissions Trading System (ETS). A consistent regulatory environment is indispensable to prevent double payments, lessen administrative complexity, and avoid market distortions and business leakage, which are already threatening the competitiveness of European ports. The MMF anticipates with interest the forthcoming evaluation by the European Sustainable Shipping Forum (ESSF) and advocates for a harmonised approach that underpins the EU’s climate objectives while preserving a fair and competitive landscape for the maritime sector.

In relation to the Fit for 55 Package, the Forum has persistently engaged with the Commission, highlighting the significant incentive created by the ETS for shipping companies to circumvent the scheme by redirecting their transshipment activities and indeed, their  port calls,  from EU ports to newly constructed or expanded terminals in North Africa. The Forum is gravely concerned about the disproportionate risks that EU ETS poses to Malta’s maritime connectivity and continued economic wellbeing. To this end, last July, it submitted further robust arguments to the EU Commission evidencing business leakage, carbon leakage, loss of maritime connectivity, and the undermining of EU principles, such as competitiveness, cohesion, fair competition, de-risking, supply-chain integrity, carbon neutrality, and socio-economic resilience.

The MMF expects Malta to take a strong stance in its European and international policy, advocating for the withdrawal or phasing out of FuelEU and ETS to prevent double taxation and uncertainty in the industry at the global level.

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