Labour MEP says European Commission should review ETS effects on Malta ports

Labour MEP Josianne Cutajar (S&D) said the European Commission should carry out a review of the upcoming effects of its Emissions Trading Scheme on Maltese ports, fearing the levy on shipping’s emissions will lead to hiked consumer prices.

Cutajar said while the EU’s ambitions for climate neutrality were welcome, the resilience of small islands in the face of climate change and mitigation measures had to be taken into consideration as well.

“The ETS can be a counter-productive tax if our ports – the Malta Freeport namely – suffer a loss of trade that is instead diverted to North African ports. The ETS is intended at reducing carbon emissions, but if the same emissions are simply moving to other ports whilst our ports suffer a loss of business, we should be asking for a review,” Cutajar said.

Cutajar said laws that have negative effects such as “carbon leakage” in this case, can be put to the EC for a review. “The fact is that business is already moving elsewhere,” she said. “I will be putting pressure on the Commission to take action and to make revisions on the negative effects the ETS has on the Freeport, which generates so many jobs and also affects final consumers prices.”

In January 2024, Malta’s maritime sector will see importers levying a €100 ‘ETS’ surcharge on each container on the Genoa-Malta line, a figure expected to escalate to €255 by 2026 amidst Europe’s inflationary pressures.

The European Directive (EU) 2023/959, instituting a CO2 emissions taxation system for the maritime sector, requires cargo ships to incur emissions fees at EU ports.

Price increases for transporting containers between Malta and other Italian ports, including Livorno, Salerno, and Catania, will range from €25 to €92 per container.

The coverage for emissions under the ETS will increment from 40% to 70% in 2025, reaching 100% by January 1, 2026.

“Everyone will suffer for it,” Nationalist MP Ivan Stellini said, estimating the potential business losses for the Freeport at some €140 million. “You will have ships sailing from the Far East being levied very high rates on their emissions once they berth at the Freeport – potentially a maritime liner company could pay an extra €28 million a year. Aditionally, they will pay other fees to sail from Malta into another EU port.”

Stellini said that such shippers will instead choose ports in Egypt, and then send smaller, feeder vessels to Malta. “But that means less trade coming to the Freeport, which generates 2% of our GDP. And it will lose 155 ports of call that are essential for Maltese exports, incurring extra costs to have shipping go to some other port before sailing into an EU port.”

Stellini also said that with added time delays on deliveries, this will mean more costs on stocking, risk and insurance, that will only end up raising consumer costs.

Environment Minister Miriam Dalli has called on the European Commission to carry out a more detailed assessment to include more non-EU Mediterranean ports under the EU Emissions Trading System (ETS) on maritime transport.

Dalli reaffirmed Malta’s commitment to the measures adopted by the EU to tackle climate change, but told the EU Council that potential loopholes leading to unequal level playing field between EU ports and non-EU ports had to be addressed.

Wopke Hoekstra, European Commissioner for Climate Action, has said so far that Brussels will continue monitoring and gathering information on the impact of the EU ETS on the overall competitiveness of the EU maritime sector.