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HomeEconomyMalta's maritime sector faces new challenges with EU environmental Taxes

Malta’s maritime sector faces new challenges with EU environmental Taxes

The challenges facing the Maltese maritime sector from 2024 onwards, with significant surcharges and price increases on shipping routes from Italian ports under the EU Emissions Trading Scheme, urging local associations to seek better conditions.

In January 2024, Malta’s maritime sector will confront a new reality with the implementation of the European Union’s Emissions Trading Scheme (EU ETS). Importers using the Genoa to Malta route will encounter a €100 surcharge per container, a figure expected to escalate to €255 by 2026 amidst Europe’s inflationary pressures.

A leading shipping company has announced this surcharge in compliance with the EU ETS. Starting from January 1, 2024, an additional cost of €100 per container will be levied on the route from Genoa to Malta. The European Directive (EU) 2023/959, instituting a CO2 emissions taxation system for the maritime sector, necessitates cargo ships to incur emissions fees at EU ports.

Moreover, the company disclosed price increases for transporting containers between Malta and other Italian ports, including Livorno, Salerno, and Catania. These hikes will range from €25 to €92 per container, contingent on the route and container size.

The phased obligation for shipping companies to return Emission Unit Allowances (EUA) correlates with these surcharges. Beginning January 1, 2024, the coverage for emissions will increment from 40% to 70% in 2025, reaching 100% by January 1, 2026. Consequently, the shipping company will introduce an “ETS Surcharge” clause, subject to regular updates based on EUA price fluctuations.

Maltese politicians and associations seek solutions to rising maritime industry taxes

A PN party European elections candidate criticized the Maltese government for not negotiating a more advantageous arrangement for Malta. The candidate stressed the need for heightened vigilance to shield Maltese consumers and businesses from disproportionate costs, given Malta’s unique position as an island nation.

The CEO of Malta Freeport Terminals and representatives from the Malta Chamber of Commerce and the Malta Employers Association echoed these concerns. They expressed apprehension about the potential for carriers to bypass Malta to evade these costs, adversely affecting the local import and export sectors amidst ongoing inflation.

A Labour MEP has approached the European Commission to address the potential economic risks to ports like Malta following the ETS rollout next year. The Malta Freeport had previously warned about the impending environmental tax leading to escalated import and export costs.

While the shipping company involved remains committed to reducing CO2 emissions through fleet renewal and new technology investments, these changes introduce a complex financial burden for Maltese importers.

The implementation of the EU ETS surcharge, combined with increased shipping costs, presents a significant challenge for Malta’s maritime sector. Aligning with global environmental goals, these measures will likely result in increased consumer prices in Malta.

This situation calls for a proactive approach from Maltese trade associations and stakeholders. They must engage in dialogue and negotiations at both national and European levels to seek more favorable conditions and mitigate the impact on the Maltese economy and consumers.

Only through concerted efforts and advocacy can Malta hope to navigate these turbulent waters and secure a sustainable future for its maritime trade and consumer market.

DISCLAIMER

This article provides general information only and does not replace professional advice in any way. It is recommended to consult a qualified professional before making any important decisions regarding financial, legal or other matters. The author and the publication are not responsible for any errors or damages caused by the use of the information contained in this article.

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