Nationalist MP Ivan Castillo called upon the government to take action as a new EU emissions tax on shipping is to come into force in January 2024, raising shipping costs.

Addressing parliament, Castillo said the situation was hugely worrying and could have a wide-ranging impact on Maltese businesses and inflation.

The Malta Independent on Sunday on 12 November reported that the Malta Maritime Forum expressed concern about the “imminent risk” that major shipping companies pull out of Malta as a result of an environment tax that will be introduced in European Union countries as from next year.

There is a “likely scenario” in which Malta will lose its role as a transhipment hub, as shipping countries choose ports of call outside the EU where no such tax is paid, MMF CEO Kevin J. Borg said in an interview.

Major carriers are being led to take irreversible decisions to omit EU transhipment hubs located in the Mediterranean and instead divert to a non-EU port like East Port Said and Tanger Med in order to by-pass the prohibitive costs imposed by this directive and use feeder vessels instead to ship cargo into the EU.

Malta, Castillo told Parliament on Tuesday, was at risk of losing direct connections to 165 harbours. It also risked losing its business competitiveness.

Why has the government failed to take action on a directive that has been on the EU agenda for the last two years, the PN MP asked.

In his conclusion, Minister Silvio Schembri, responsible for Economy, EU Funds, and Lands, highlighted the establishment of an interministerial group involving the Economy, Transport, and Energy Ministries to address the new EU emission tax in shipping.  Malta, along with fellow EU members like Cyprus, has aligned with states facing potential negative impacts from the directive, he said, adding that ongoing discussions with the EU aim to explore strategies to minimize the directive's adverse effects.

Minister Schembri expressed gratitude to key stakeholders, including the Malta Freeport, the Malta Maritime Forum, and the Chamber of Commerce, for their valuable contributions to charting a path forward on this matter.