Malta will purchase €2 million worth of renewable energy credits from Estonia to reach its EU targets for 2020. 

The deal signed will see Malta purchasing surplus emission reduction credits from the Baltic country to make up for the island's failure to reach its EU-imposed target of having 10 per cent of the country's total energy generated by renewables by the end of this year. 

Malta has consistently lagged behind on its annual emission reduction targets and has long been on course to miss the final 2020 goal. The country is also dead last in its progress towards the next set of targets in 2030. 

"The year on year increase in energy consumption, mainly driven by an increase in population and exceptional economic growth, as well as unforeseen delays in the development of large scale PV projects, has prompted the government to consider complimenting local investment in the renewable energy sector by a cooperation mechanism with another member state," the energy ministry said in a statement.

While the Maltese government did not quantify the agreement, signed between energy minister Michael Farrugia and Estonian infrastructure minister Taavi Aas, Estonian media cited the country's minister putting its value at €2 million for a total of 100 gigawatt-hours (GWh) of reduction credits.  

The contract is flexible and Malta may either increase or reduce the amount to be purchased by one-fifth.

Estonia will use the revenue to finance new renewable energy projects or reduce energy charges for consumers.

An EU 'flexibility mechanism' allows countries producing less emissions than the maximum allowed to ‘sell’ their remaining allocation to other countries exceeding their own maximums.

Malta has already made use of this system through a €1.4 million, seven-year deal with Bulgaria, covering the years 2013 to 2020. 

Former environment minister José Herrera has previously defended Malta's purchase of credits, arguing that the targets negotiated by the Nationalist government in 2012 had never been attainable.

Energy minister Mr Farrugia described the new agreement with Estonia as a "mutually-beneficial" deal which would enhance cooperation between the two countries. 

He said the government would also continue to invest in local renewable energy generation and would announce a package of new initiatives in the coming weeks to further support the sector.

In a statement on Saturday, the Nationalist Party took aim at the agreement as proof of the government's failure to make progress on renewable energy. 

"The Maltese people will be paying the Estonian people for the incompetence of the Labour government. This is particularly ironic given that Malta enjoys many more days and hours of sunshine than Estonia, and it is therefore scandalous that Malta has failed to reach its targets when Estonia has surpasssed them."

The PN also expressed concern that the government would fail to reach the forthcoming 2030 targets that it had itself agreed on in its Energy and Climate Plan. 

The party said this plan had been agreed with the European Commission behind Parliament's back and without consultation with the Opposition.