MMF Electoral Proposals 2026

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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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A delegation of the Malta Maritime Forum (MMF) travelled to Brussels to discuss the EU’s Emission Trading System with the EU Institutions, Industry Associations and Maltese policy interlocutors.   The visit was intended to influence the forthcoming review of the Directive expected in July and served to :

1. present data on the negative repercussions of ETS in terms of business and carbon leakage and
2. to discuss possible alternatives to the implementation of ETS, the principles of which the Forum regards commendable.

To this end, meetings were held with the:

• European Commissioner Glenn Micallef and Head of Cabinet
• European Commission DG Clima EU ETS Head of Unit and Staff
• Deputy Permanent Representative to the EU and Maritime Attache
• European Tug Owners Association
• European Maritime Pilots Association
• European Sea Ports Organisation
• Federation of European Private Port Companies and Terminals
• European Parliament President Main Policy Advisor
• Malta’s MEPs Peter Agius, Alex Agius Saliba, Thomas Bajada, Daniel Attard and representatives from the offices of David Casa and EP President Roberta Metsola.

Whilst in Brussels the Forum sounding the alarm over the failings of EU ETS, arguing that it is failing spectacularly to achieve its commendable climate change green objectives because it is unable to enforce its Directive outside its jurisdiction.  As a result, transhipment business is largely shifting to new and expanded transhipment hubs that have mushroomed along the coast of North Africa to capture the business of cargo carriers that are re-routing away from EU ports to avoid ETS requirements with the risk of reducing southern EU ports to feeder hubs playing a secondary role to extra-EU ports where global cargo will become principally transhipped.

This effect runs diametrically counter to the objectives of the Commission’s new Port Strategy which was published while the MMF was holding its talks in Brussels and producing concrete evidence that EU ports were losing rather than gaining competitiveness yet the same amount of carbon was being generated in EU waters.  Hard facts were produced on the substantial growth being registered in non-EU ports at the expense of EU transhipment hubs. This shift has led to increased feeder traffic, paradoxically boosting overall emissions rather than curbing them.

This mounting practice is creating disproportionate economic risks for small island state economies like Malta’s which rely heavily on global maritime carriers to generate jobs and export-led growth. With high ETS costs and a relatively minute domestic container volume, the island risks losing direct calls from major shipping lines. If cargo bound for Malta is unloaded at neighbouring non-EU ports, Malta’s connectivity and competitiveness are undermined, jeopardising sectors such as manufacturing and logistics.

During its active interactions in Brussels, the Forum recommended that the European Commission:

• Adopts a temporary freeze on EU ETS and FuelEU for maritime transport until the establishment of a global decarbonisation measure
• Gives clear and concrete assurances to the industry that it would withdraw its ETS and FuelEU regimes once a global system is in place
• Extends derogations for small islands to major islands and prolong the sunset clause until 2035
• Exclude EU transhipment ports—where transhipment exceeds 65% of total activity—from the definition of “port of call” under the ETS Directive.
• Exclude short sea shipping from the scope of EU ETS until road transport ETS2 is operational.
• Introduce a risk assessment mechanism for ETS monitoring, applying predictive criteria to ensure fair oversight.

The Malta Maritime Forum is most appreciative of all Maltese MEPs for their unequivocal non-partisan approach in this matter and for attending in full force for the MMF presentation.  It also thanks EP President Dr Roberta Metsola and Commissioner Glenn Micallef for their support.

Buoyed by this positive feedback and support, the Forum plans to keep up its advocacy momentum with further visits in the coming weeks with a view to continue to urge EU policymakers to heed these recommendations and bring about a level playing field for all EU ports, thereby promoting an effective, sustainable and globally coordinated decarbonisation process in the maritime sector.

The MMF delegation consisted of Godwin Xerri, Chairman; Alex Montebello, Vice Chairman; Claudia Vella Casagrande, Director; and Kevin J Borg, CEO.

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The meeting was held shortly after the Forum’s announced commissioning of a second study about the Economic Contribution of the Maritime Industry which announcement was praised by Hon Dr Borg.  The MMF Chairman, Mr Godwin Xerri explained how this second study builds on the previous report and how it complements the forthcoming National Maritime Transport Strategy to which the MMF also contributed actively.

During the exchange of views, in fact, the Opposition and the Forum agreed on the potential for growth in the Industry beyond ship registration, cruise-liner operations and transhipment.  The meeting discussed areas that are ripe for further development and growth including ship finance, bunkering of new fuels and the establishment of a regional logistics hub, all of which were recommended in the Forum’s recent 2026 Budget Proposals position paper.

The meeting also served to discuss current issues of prime mutual interest which are acting as bottlenecks to future growth including international regulation, infrastructural limitations and an acute shortage of workers.

To this end, the meeting underlined the role of education and talent in ensuring further success for the industry.  The MMF explained that as a matter of priority, it was consistently pressing for increased exposure of maritime careers and better coordination between the relevant stakeholders in this regard.

The Leader of the Opposition reaffirmed his Party’s belief that the maritime industry remains one of the most important for the Maltese economy and every initiative aimed at strengthening its competitiveness, employment and long-term resilience is a significant step forward.  He reiterated the Opposition’s firm intentions to establish a dedicated maritime authority and a Minister for maritime affairs if elected to govern.

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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.

The post Policy Position Paper: Advocating for the Withdrawal of the EU ETS in Favor of the IMO Net Zero Framework—Safeguarding Malta’s Maritime Connectivity and Economic Security appeared first on Malta Maritime Forum.