The Malta Maritime Forum (MMF) was encouraged by the opinions of Prof. Michael Briguglio published in this newspaper on the European Commission's review of its Emissions Trading System (ETS).  This review was published last July under the brand of socially sustainable maritime reforms taken in the context of its climate change priorities.

Upon the publication of this much anticipated review, the Forum welcomed the continued focus on Europe's decarbonisation ambitions in the proposals but cast serious doubts as to whether the revisions would be sufficient to ensure the long-term competitiveness of its ports and the wider maritime sector.

These concerns on the disruption of fair competitive conditions within the shipping and port sectors are more acute in the context of island Member States whose geographical realities have, once again, not been adequately reflected in the design of the reviewed System.

For Malta, this is not merely a question of competitiveness within the shipping and port sectors. Malta's connectivity is a matter of economic security and social sustainability.  This point was made amply clear in the analysis of Prof Briguglio and his team.  It is most encouraging for the industry to learn that the arguments put forward consistently by the MMF are now supported academically.  Unlike continental Member States, Malta has no road, rail or inland waterway connection with the European continent.  Maritime transport is therefore the principal physical route through which consumer goods, medicines and other basic necessities enter and leave the country.  This dependence is further intensified by the fact that Malta does not produce most of the essential items it consumes and is not food self-sufficient.

The consequences of reduced maritime connectivity would therefore extend far beyond shipping.  They would affect households, businesses, manufacturers, tourism operators and the wider economy.

At the same time, the current design limitations of EU ETS Maritime continue to place Malta Freeport, like other EU transhipment ports in the Mediterranean, at a competitive disadvantage. Mainline container vessels are incentivised to use transhipment hubs outside the EU, including in nearby North Africa, where ETS applies differently or does not apply at all.  The potential savings can amount to millions of euros per service annually.

Since the onset of ETS, several mainliner services have been diverted away from EU ports.  North African facilities have absorbed the lion's share of new transhipment business to the tune of 8m:0.5m TEUs (Containers - Twenty Equivalent Units).  New investment in the capacity of North African transhipment hubs has dwarfed that taking place in Europe. 

If mainliners continue in their increasing trend to tranship elsewhere, calling at Malta solely to discharge or load the relatively small domestic component would not be economically justifiable.  Today, containers linked directly to Malta's domestic market represent only around 4-5% of the containers transhipped through Malta Freeport.  The loss of the mainline calls that sustain the transhipment operation could therefore have consequences well beyond the Freeport itself.

Malta's importers and exporters could lose direct connectivity with major global markets in Asia and the United States.  The manufacturing sector would also face increased costs and longer steaming times for importing raw materials and exporting finished products.  This is particularly significant for an economy that has no indigenous raw-material base and whose manufacturing industry produces predominantly for export markets.  Inputs used in the tourism industry would increase in cost rendering one of the Islands' economic mainstays less competitive.   If Malta becomes more costly and less efficient to serve, the long-term viability of maintaining certain manufacturing and tourism operations on the island could be called into question.

Within the ETS review, the MMF noted the European Commission's proposed measures intended to safeguard the connectivity of Europe's most vulnerable regions.  These measures complement the Commission's recent Communication on Islands and Coastal Communities, which the Forum also followed closely during the course of 2026.  The Forum noted that these measures are limited until 2031 and apply solely to islands that are part of larger member states. 

This approach does not suffice for the MMF that has consistently argued that temporary, conditional or narrowly targeted measures cannot fully address a permanent geographical disadvantage.  The Forum therefore maintains that all islands, irrespective of size, together with outermost regions and island Member States, should benefit from a permanent and automatic derogation from ETS on the basis of their geographic disadvantage and insularity. A permanent disadvantage requires a permanent response.

The MMF also notes the Commission's decision to amend the neighbouring port rule by lowering the relevant transhipment threshold from 65% to 50%.  While this may appear to strengthen the rule, it does not resolve a fundamental difficulty: competing ports in North Africa may not necessarily submit the data required for the threshold to be calculated.

Moreover, public statements by major container lines have made clear their objective of investing in North African terminals specifically for transhipment purposes.   Such facilities may remain outside the new 150-nautical-mile scope of the neighbouring port rule while nevertheless competing directly with EU Mediterranean ports.  This creates the risk of continuing and potentially increasing diversion of transhipment activity.

The Forum continues to emphasise that the neighbouring port rule is ineffective where a vessel simply does not call at an EU port as it traverses the Mediterranean.  Indeed, unless the broader structural imbalance is addressed, the current approach could create a further incentive for shipping companies to divert traffic away from EU ports altogether.

The Malta Maritime Forum is most appreciative of the Maltese Government for its direct involvement in this subject and of all the authorities and dignitaries, both locally and in Brussels, who have met the Forum and listened to its arguments and positions in advance of this review.  Their engagement is important, but the process of consultation, analysis and review must continue relentlessly.

To this end, the MMF remains committed to advocating further reform of EU ETS Maritime, including explicit recognition of the particular circumstances of island Member States that depend on ro-ro maritime services as a principal link in their consumer and industrial supply chains. This position has been consistently advanced through the Forum's numerous policy papers and recommendations.

The objective of decarbonisation must be pursued, but climate policy must also be designed in a manner that does not unintentionally isolate Europe's islands, weaken their economic resilience or undermine the very connectivity on which their populations and industries depend. Socially sustainable maritime reform requires that Europe's permanent geographical realities be recognised not as exceptions to be managed temporarily, but as structural conditions deserving permanent solutions.

In conclusion, as Prof. Briguglio argues, sustainable maritime reform must be not only greener but socially sustainable.  The Forum believes that besides socially sustainable, such reform must also serve the national interest.  Malta, as an island state, stands to be disproportionately affected by an ETS review that fails to adequately reflect its unique realities as an island Member State.

Godwin Xerri is the Chairman of the Malta Maritime Forum