Freight costs up €654,000 a week for Malta as fuel surge, EU ETS hit operators

Malta’s consumers are paying an extra €654,000 per week in freight and shipping costs as operators warn the war-driven surge in fuel prices is intensifying the “unfair” strain from the EU’s Emissions Trading System.

The Association of Tractor and Trailer Operators on Friday called for an “immediate suspension” of the ETS obligations on Malta as they warned they can “no longer” absorb the surcharges and the escalating fuel costs resulting from the ongoing conflict in the Middle East.

They “implored” the EU to “reconsider” ETS, arguing the system is “already highly unfair” to Malta and is “placing heavy pressure” on the international trailer operators that sustain Malta’s connectivity.

“We urge an immediate suspension of ETS obligations on Malta until a fair mechanism is developed that reflects the realities of island economies. Without corrective action, these escalating costs risk eroding Malta’s competitiveness, undermining the logistics sector, and placing an unsustainable burden on businesses and households,” ATTO chairman Joseph Bugeja said.

The association pointed out that, with the ongoing conflict in the Middle East, the combination of ETS surcharges and escalating fuel costs “can no longer be absorbed by transport operators”.

“These rising costs will inevitably be passed on to Maltese consumers,” ATTO said.

The association warned that while the sector was still grappling with the ETS- related cost increases introduced earlier this year, the latest surge in bunker prices and transport fuel linked to the war in the Gulf “has further intensified the burden on operators serving Malta”.

Genoa route gets pricier

Rising bunker prices are prompting shipping lines and freight operators to review the Bunker Adjustment Factor (BAF) applied to freight rates.

ATTO said one operator has already announced a surcharge adding €272 per trailer for a round trip between Malta and Genoa.

“Combined with the €734 per trailer ETS cost already in place, the cumulative first-quarter increase now amounts to approximately €1,006 per trailer,” ATTO said.

When multiplied by the 650 weekly trailers, this amounts to an extra €653,900 per week, which, together with the increased costs of fuel, “will ultimately be borne by Malta’s consumers”.

Malta at 'structural disadvantage'

The association added that a second operator has yet to confirm whether it will introduce similar increases, though a decision is expected shortly.

They highlighted how Malta faces a “structural disadvantage” due to its geographical location. The Malta-Genoa route spans roughly 700 nautical miles each way, making it the longest route affected by these charges and resulting in the highest BAF increases in the region.

Around 60 per cent of trailers leaving Malta must return empty to Genoa. These trailers still incur the full surcharges, further amplifying costs.

“The financial impact is already significant: one leading international trailer operator has registered an increase of €14,600 per week in fuel-related costs alone, before additional market adjustments,” ATTO said.

Bugeja said Malta’s geographic isolation means that policies designed for continental transport routes “disproportionately penalise” island states like Malta.

“The ETS was already putting Maltese operators at a disadvantage. The current surge in bunker prices has made the situation unsustainable,” Bugeja added.

“These increases will ripple through the supply chain, affecting importers, shop owners, and ultimately Maltese consumers.”