The Malta Maritime Forum (MMF) has gone on record on numerous occasions with its views on the introduction of the EU Directive on the Emission Trading Scheme (ETS) as applied to Shipping and its negative implications for Malta.

The MMF’s calls for a postponement in the implementation were serious and responsible.  They were made with the highest degree of respect for the European Institutions and their commendable objectives behind the Directive.  Nevertheless, the MMF firmly believes that the EU failed miserably in properly appreciating and evaluating the negative effects that these regulations will have on Malta and other Mediterranean countries.

All throughout, the work that was and continues to be done to avoid these negative repercussions, was done in consonance with the unstinting efforts by Government at all levels and the support of the Opposition who remained close to the developments as they unfolded.  The collaboration and outreach between the two sides is credit not only to the two individuals who held the respective portfolios as Minister and Shadow Minister, but even to Government and Opposition for recognizing the threat to the national interest and treating it as such.  The MMF meanwhile notes the appointment of a new Minister responsible for this portfolio and sincerely augurs that the same objective approach continues in favour of the national interest.

Going forward in fact, the MMF appeals for the country to continue to pull resources in the same direction and continue to make the necessary representations to the European authorities with a united front without politicising this matter as unfortunately, has been the case in recent days with mud-slinging exchanges made in the public domain.  These trivial attempts did no justice to the prudence and maturity that characterized the handling of this matter to date and have certainly not benefited the common good.   We sincerely appeal to the political forces to spend our limited resources and energies on strategies that will contribute to desired solutions.

This does not mean that the country should not undertake a serious and professional analysis as to what went wrong in the communication chain between the public and private sector, leading us to this unfortunate situation. But there will be time for that. One must also appreciate that this phenomenon of the country finding itself a victim of regulations that were voted for within the European Parliament is not exclusive to Malta.  All the countries within the Med are exactly in the same situation, with the difference that these countries are not wasting their time on pointing fingers but are concentrating on solutions.  This is precisely what we must do too.

These regulations will go down in the history of the European Union as the fastest tracked regulations as if there was an agenda to expedite the necessary discussion and approval, giving member countries limited time to examine and understand the full implications resulting therefrom.  Furthermore, the way these regulations were presented gave the overall impression that these were going to contribute effectively to the fight against climate change and were based on the principle of the “polluter pays” – principles which no one can vote against.  At the stage when these regulations were discussed, there was no information as to the alternatives being considered by the shipping lines to avoid paying the ETS. By the time that these plans became more apparent and by the time that the economic considerations were worked out by the shipping lines, the European Parliament had already voted in favour of these Regulations. As the implementation date drew closer, the reality of the implications became apparent and no one can blame the shipping lines for working out contingency plans to avoid paying billions of euro by traversing the Mediterranean but avoiding calls at EU ports.  This is where we stand at the moment.

In our representations to the Authorities in Brussels, we proved through facts that cannot be rebutted, that these Regulations fail on all fronts namely:

  1. They will not reduce carbon emissions from Shipping within EU waters because not only will the ships keep plying through EU waters, but by shifting transshipment activity to non-EU ports, all cargo destined for EU destinations would have to travel longer distances, hence increasing carbon emissions;
  2. The objective of making the polluter pay will be defeated through the new surcharges that the shipping lines are introducing, very aptly called ETS surcharges, which the cargo owners are paying as from the 1st of January. In simple terms, the cost of ETS will be shifted to the European consumer;
  3. These regulations will not lead to economic growth within EU member states because the transshipment business consolidated over the past 40 years by European ports (including Malta Freeport) is now being offered on a silver platter to non-EU ports;
  4. The aim of increasing growth and jobs will also not be achieved because if the transshipment traffic is handled in non-EU ports, there will be loss of jobs from the myriad of port service providers within EU transshipment hubs. Specifically in the case of Malta, these regulations will have a negative impact on the overall economy of the island because of the loss of connectivity for imports and exports which today is provided by the shipping lines that service Malta as part of their transshipment itinerary in the Med which shall now move to other continents;
  5. The objective to improve living standards for EU citizens through the risks brought about by the Regulations in terms of increased inflation and the security of supply-chains.

With this state of affairs there is definitely no scope or time for petty political bickering but there is the urgent need for a national effort to ensure that all risks associated with the poor implementation of these Regulations do not damage the Maltese economy.  We appreciate the daunting political task that Government faces but the country must do whatever it takes to ensure that the direct maritime connections which Malta depends upon and from which we have benefitted for many decades continue to remain in place for the benefit of our nation and its people.

Press release issued by the MMF on 9th January 2024

Karin Grech
Author: Karin Grech