Maritime and trailer operators have welcomed proposed changes to the EU’s carbon levy as a step towards protecting the Malta Freeport, but warned the reforms leave the island’s importers, businesses and consumers carrying the full cost of the scheme.
The European Commission last week proposed excluding long-distance transhipment cargo brought to EU ports on large container vessels if bound for ports outside the bloc.
The proposal could help Malta Freeport compete with North African transhipment hubs, which are exempt from ETS charges for voyages not touching EU ports.
However, it would not apply to goods imported for use in Malta. The proposal must also be negotiated by the European Parliament and member states before becoming law.
The Malta Maritime Forum (MMF) described the changes as positive but said “serious doubts” remained over whether they were enough to protect the long-term competitiveness of European ports and the maritime sector.
It said the transhipment concession could reduce the risk of shipping lines moving services away from Malta, noting the freeport had been “particularly exposed to fierce competition from North African transhipment hubs” which had invested heavily to “aggressively” expand their business.
“Numerous services” had shifted from EU to non-EU transhipment hubs in Egypt and Morocco, it said, noting that North African ports had attracted the “lion’s share” of new business, increasing at a rate of around 16 times that seen by European ports.
The Commission is also proposing tougher rules to identify neighbouring non-EU transhipment ports that could be brought within the ETS framework.
The proportion of a port’s business that must involve transhipment would fall from 65% to 50%, and some non-EU ports within 150 nautical miles of an EU port could also be added to the list based on their infrastructure, even before they handle large volumes of transhipment cargo.
But the forum said those rules would remain ineffective when vessels bypass EU ports entirely.
It called for permanent and automatic protection for island states and regions, arguing their geographic disadvantages could not be overcome through alternative land transport.
The Association of Truck and Trailer Operators (ATTO) similarly welcomed the proposals but said the package remained “incomplete”.
Around 55,000 trailers are transported to and from Malta each year, according to the association, with ATTO chairman Joseph Bugeja said that around 60% of trailers arriving in Malta carrying goods must return empty to Genoa before collecting their next load.
Those empty trailers still incur ETS charges during a sea journey of about 700 nautical miles, he said. ATTO estimates the additional cost can reach €1,000 for a trailer making a round trip between Malta and Genoa.
“These are unavoidable costs arising from Malta’s geographic reality and lack of alternative transport options,” Bugeja said. “They directly affect the competitiveness of Maltese businesses and ultimately increase costs throughout the supply chain.”
Earlier this year, ATTO estimated that ETS charges alone would cost Maltese trailer operators around €16.5 million annually. It later said the combined impact of carbon charges and fuel increases had added about €654,000 a week to Malta’s freight bill.
The ETS was extended to shipping in 2024, with companies initially required to surrender allowances covering 40% of emissions. ETS now covers 100% of allowances.
Industry representatives have consistently argued that Malta is disproportionately affected because it relies on shipping for virtually all its goods and has no rail or road connection to mainland Europe.
“Malta cannot be expected to carry the same burden as mainland Member States when alternative transport solutions simply do not exist,” said Bugeja.
“A one-size-fits-all approach risks weakening Malta’s competitiveness, increasing costs for businesses and consumers, and placing Maltese operators at a disadvantage within the Single Market.”
“The Commission has taken an important step forward in recognising Malta’s transhipment challenges,” he said. “The next step must be to ensure that the full logistics chain is protected.”
