[WATCH] Malta to push ahead on hydrogen-ready pipeline after losing out on EU funds

Funds to finance €400 million gas pipeline would have done away with LNG tanker in Marsaxlokk but now Malta has to change tack on pipeline

Energy Minister Miriam Dalli
Energy Minister Miriam Dalli

Malta is retaining its gas pipeline on the European Commission’s projects of common interest (PCI) list, despite failing to obtain the funds for the €400 million project in the last disbursement of Connecting Europe Facility cash.

Energy minister Miriam Dalli said the pipeline remains on the PCI list but that it will advance the project as a “hydrogen-ready” pipeline, reflecting the change in appetite inside the EC to do away with fossil fuels like LNG.

Malta will have to retain the LNG tanker for longer than it expected now that it has failed to obtain financing for the pipeline.

Dalli was unable to give a concrete commitment on the permanence of the tanker in Marsaxlokk. “The promise was that we keep the tanker only until we are connected to a pipeline. We need to ensure this connection for our security of supply.”

Dalli said Malta will still insisted on a mix of clean energy sources, that will include hydrogen, renewable energy, and the interconnector with Sicily.

She said Malta will still attempt tap into EU financing for the project, and if need be, other forms of local financing. “If we go for a hydrogen-ready pipeline, it would be in line with our vision to become carbon-neutral by 2050,” she said.

The European Commission ignored the island’s final bid in the last round of CEF funds. In 2019, Malta’s attempt to get finance for the €400 million pipeline was punished by the EC’s de-prioritisation of gas projects to move fast on climate change targets. 

Malta wants to procure natural gas from the European mainland directly because its supply of gas to the Delimara power station is procured by a floating liquefied natural gas (LNG) vessel.  Now that it has lost out on the last disbursement of the €23 billion CEF founds, Malta will have to change tack on its energy plans because the next PCI list in 2021 – the fifth – will be more stringent on gas projects.

This means it will have to go for a hydrogen-ready system, so the proposed pipeline will have to be able to transport hydrogen. 

Additionally, Malta’s bid was overshadowed by a European Ombudsman’s inquiry on the gas projects that were included in the 2019 list of PCIs (projects of common interest) – Malta’s included. The Ombudsman last month agreed, saying it had been “regrettable” that the EC did not attempt to improve the available data. Now under a proposed reform, the EC has ruled out unabated gas projects from applying for funding completely. 

The EC has also declared that Europe no longer had such pressing gas supply security issues, meaning gas projects were not deemed as strategic as in the past.  “By the early 2020s, when the gas projects of common interest currently under construction will be in operation, Europe should achieve a well-interconnected and shock-resilient gas grid and all member states will have access to at least three gas sources,” the EC said. 

This means the CEF billions will only be spent on renewable and low carbon gases, such as smart gas grids, and green gases, typically biogas and biomethane, but also hydrogen. 

Malta’s natural gas pipeline between Italy and Malta was expected to be operational by 2024. It has been a high priority in the ongoing effort to link Malta to Europe’s energy network, and will end Malta’s “gas isolation”. 

Malta’s electrical network was linked to Europe’s via Sicily in 2015, but remaining on the periphery from the EU’s natural gas networks affected the security of Malta’s energy supply.