MEP Peter Agius proposes islands derogation that could save Malta €60 million a year in transport costs

During the European Parliament’s plenary session in Strasbourg, MEP Peter Agius tabled an “Islands Derogation” through 86 amendments to the European Union’s Emissions Trading System (ETS), which currently imposes an additional tax on air and maritime transport to and from Malta.

“Right now, Malta is paying a disproportionate price for all sea and air transport through an additional EU ETS tax which, unfortunately, does not take into account the total dependence of islands such as Malta on sea and air transport, nor the impact of the ETS on the cost of living on islands. I am proposing an Islands Derogation to take into account the unique additional burdens faced by islands, including a 50% reduction in the applicable ETS tax on all air and maritime transport to and from Malta,” said MEP Agius.

Recent statements by ATTO, the association representing truck and trailer operators, and the Malta Chamber indicate that an estimated 67,000 containers are transported by sea to and from Malta each year. According to ATTO, the ETS tax amounts to €530 per trailer or container. This comes on top of standard freight and fuel charges, which already place a significant burden on transport to islands.

The impact of the ETS tax is also significant for Malta’s aviation sector, with the Central Bank of Malta reporting an additional annual cost of €88 million in ETS tax on flights to and from Malta.

The amendments proposed by MEP Agius provide for a temporary 50% reduction in the applicable ETS tax on all air and maritime transport to and from islands until 2040. Dr Agius’s proposed changes also include measures to encourage greater direct investment in green maritime transport, as well as greater transparency over the use of ETS revenues.

“I am calling for a partial and temporary 50% derogation from the existing ETS tax because the Maltese people want to play their part in Europe’s efforts to fight climate change. We want to support measures to save the planet for our families and future generations, but these efforts must be proportionate in their impact on islands. I am therefore proposing that these derogations be gradually phased out, with the aim of encouraging transport operators and public authorities to invest heavily in green transport between now and 2040. This balanced approach will allow me to build support among fellow MEPs from other Member States for an ‘Islands Derogation’ that could save Malta €60 million a year in costs that feed into the cost of living,” said MEP Agius.

“Since 2021, I have been warning political actors in Malta about the disproportionate impact of the European Green Deal on Maltese consumers. Unfortunately, when these rules were adopted, Malta did not manage to make the case for the specific circumstances of islands to be taken into account under the ETS. Since being elected as an MEP, I have made it my mission to correct this mistake. My amendments are now gaining support from several MEPs in the European Parliament, and I am confident that we can make progress for Malta in the coming weeks,” concluded Dr Agius.