MEP Peter Agius welcomes new ETS proposal exempting trans-shipment as step forward for Malta, but calls for bolder action on transport costs and the cost of living

The European Commission today presented its revised Emissions Trading System (ETS) proposal, aimed at addressing a number of shortcomings in the current EU carbon pricing regime for transport. The existing rules have been widely criticised for undermining competitiveness and economic growth across several sectors.

Reacting to the proposal, MEP Peter Agius said it could become one of the most important legislative files for Malta during this parliamentary term, given the disproportionate impact the current ETS regime has had on the Maltese economy.

"The existing ETS rules have unfortunately amplified Malta's natural disadvantage as an island by increasing transport costs for virtually all the goods our economy depends on," said Agius. "In the past, we were short-sighted in failing to anticipate the systemic burdens that ETS would impose across almost every sector of the Maltese economy. We now have an opportunity to correct that mistake by giving ETS a genuine island dimension."

Agius welcomed the proposal to exempt trans-shipment operations from the ETS, a measure expected to provide partial relief to the Malta Freeport and strengthen its competitiveness against neighbouring ports.

The Commission has taken on board calls by Agius and industry stakeholders highlighting the competitive disadvantage faced by Malta Freeport compared with North African ports by exempting trans-shipment cargo that is not destined for the EU market.

"This exemption is a significant step forward for Malta. Freeport operations account for around 2% of our GDP and provide essential connectivity for a much wider ecosystem of local businesses. Its inclusion in the Commission's proposal demonstrates that, by working consistently and constructively, we can shape European legislation to better reflect Malta's realities," Agius said.

However, Agius expressed disappointment that the proposal does not include broader safeguards for island states, particularly regarding trailer operations, which transport around 60% of Malta's industrial and consumer goods.

"I am disappointed that the Commission has failed to introduce concrete measures to address the heavy burden on trailer operators, who are now paying the full ETS charge on sea crossings between northern Italy and Malta. According to the Malta Trailer Operators Association (ATTO), this amounts to more than €700 per trailer. Ultimately, these additional costs are being passed on to Maltese families through a higher cost of living."

He said he would seek amendments during the forthcoming negotiations to reduce this burden and would also push for measures addressing the disproportionate costs faced by Malta's aviation sector because of the island's geographical distance from mainland Europe.

"The Maltese are willing to play their part in tackling climate change. But the price we pay must be fair and proportionate. We should not be penalised simply because we are an island," Agius concluded.