A government-commissioned study will quantify Malta’s particular economic challenges as a small island state to the European Commission, Economy Minister Silvio Schembri said.

The development comes as Malta starts feeling the effects of the Emissions Trading Scheme (ETS), a new EU-wide environmental shipping tax in which carriers are obliged to purchase “allowances” to offset their carbon emissions when travelling to EU ports.

On Saturday, the president of the Chamber of SMEs, Paul Abela, accused Malta’s EU representatives of allowing the tax to pass “under their noses”.

The study will quantify the difficulties Malta faces compared to larger EU countries in the European mainland, Schembri said.

“There are things which are clear and obvious for us, but this study will quantify Malta’s economic disadvantages and serve as a scientific tool when we put our issues to the European Commission,” he said.  Besides the impact of ETS, the study can help explain why Malta needs to help firms in ways the Commission could consider to be state aid, he said.

Schembri said that ETS not only risks higher prices being imposed on consumer goods but shipments skipping Malta on their journey.

That would complicate importation, as many consignments destined for Malta come with transshipments that are destined for other countries, he said.

“Because ETS is for the EU, ports in North Africa, like Tunis, have become more competitive,” Schembri said.

Malta’s ETS efforts in Brussels are co-ordinated between three ministries, economy, energy, and transport, and have involved industry stakeholders such as the freeport.

Asked if the government will apply for a derogation on the ETS, Schembri said: “We are considering everything.”

The study will be led by a “reputable” international firm that the Commission itself often commissions, Schembri said.

NSO statistics and other local studies on the logistical challenges of Malta already exist. But this study by an international firm will lend more credibility to Malta’s position, the minister added.

ETS was part of a wider European Climate Law which aims at achieving the EU’s climate goal of reducing EU emissions by at least 55% by 2030, a legal obligation.

According to the Commission, ETS “makes polluters pay for their greenhouse gas emissions, helps bring emissions down and generates revenues to finance the EU’s green transition”. 

However several, including the European Parliament, have questioned the shipping tax’s environmental effectiveness saying it only serves to move shipping away from the EU’s ports.