The company received the funding through the European Regional Development Fund (ERDF)-backed Business Enhance grant scheme, using the support to invest in professional catering equipment and modern refrigeration systems for its new operation.

The visit by Minister for European Funds, Social Dialogue and Consumer Protection Keith Azzopardi Tanti formed part of the government’s efforts to showcase projects supported through EU funds.

According to the ministry, the government has committed more than €39 million through over 680 grant agreements under various ERDF schemes designed to support small and medium-sized enterprises (SMEs). The funding covers investments including machinery and equipment, digitalisation, marketing consultancy, internationalisation, certification standards and business studies intended to strengthen competitiveness.

Speaking during the visit, Azzopardi Tanti described SMEs as the backbone of Malta’s economy, saying they play a vital role in creating jobs and driving economic activity. He said European funds provide businesses with an opportunity to expand operations, improve productivity and achieve long-term growth.

Rodrick Zerafa, chief executive of Servizzi Ewropej f’Malta, said KG Catering’s investment demonstrated how European funding can translate into tangible business improvements. He noted that the agency provides free support to businesses in Malta and Gozo by identifying suitable funding opportunities and assisting with the application process.

KG Catering representative Giuseppe Gravina said the company invested around €250,000 in modern kitchen and specialised equipment, with European funding helping make the project possible. He said the investment enabled the company to establish the restaurant with modern, efficient facilities.

The minister also highlighted the launch of the second call under the Digitalise your SME scheme, backed by a €15 million allocation. The programme includes increased funding thresholds for artificial intelligence projects, support for personnel costs through Simplified Cost Options and measures promoting the responsible adoption of AI.

Eligible projects may receive grants of up to €235,400, covering up to 50% of eligible investment costs in Malta and 60% in Gozo. Projects aligned with Malta’s Strategic Roadmap for the Digital Decade 2023-2030 may also qualify for an additional 10% top-up from the Malta Digital Innovation Authority, subject to available funds.

Concluding the visit, Azzopardi Tanti encouraged more businesses to apply for available funding, saying continued investment by local enterprises would contribute to strengthening Malta’s economy.

The post EU funding helps KG Catering expand as government highlights €39 million SME investment first appeared on The Malta Business Weekly.

In a statement on Facebook, Camilleri said the evaluation process for these submissions will commence in the coming days and weeks.

This charter arrangement serves as an interim measure until two new permanent vessels are purchased to join the existing fleet, aligning with the long-term strategy for the future of the Gozo crossing service.

The new fourth vessel will be replacing the Nikolaus, which has been chartered by Gozo Channel for several years but which has limited operations and has been the subject of so much criticism by passengers.

The post Two companies bid to charter fourth ferry for Gozo Channel first appeared on The Malta Business Weekly.

The appointment reflects RSM Malta’s continued investment in services that help organisations respond to a rapidly changing business environment. As businesses increasingly look to technology and AI to improve efficiency, strengthen decision-making, and support long-term growth, RSM Malta’s Digital service line is focused on providing practical support that connects technology with real business outcomes.

Ludwig brings nearly two decades of experience in technology, transformation, software engineering, project delivery, and business management across both the public and private sectors. Since beginning his career in software engineering back in 2007, he has progressed through a number of senior leadership roles, leading multidisciplinary teams and supporting organisations with technology strategy, digital transformation, automation, and AI-enabled solutions.

In his new role, Ludwig is leading the continued growth of RSM Malta’s Digital Transformation and AI practice, advising boards and executive teams on technology-enabled business transformation. He is also supporting the development of the firm’s digital transformation strategy, leading complex client engagements, expanding technology and AI-related service offerings, and working closely with the wider RSM international network to strengthen the firm’s capabilities.

Commenting on his appointment, Ludwig Micallef said: “Digital transformation is no longer about implementing technology for its own sake. Organisations today are looking for trusted advisors who can help them translate emerging technologies into measurable business outcomes. That starts with understanding the organisation itself; its priorities, challenges, people, and ambitions. Technology is most effective when it is aligned with real business needs and implemented in a way that creates meaningful and lasting value. My ambition is to further strengthen RSM Malta’s position as a strategic partner that helps organisations improve the way they operate, strengthen decision-making, and create value through technology.

“AI presents one of the greatest opportunities businesses have faced in decades, but success will depend on adopting it responsibly and with a clear business purpose. At RSM Malta, our priority is to help organisations embrace AI as part of their wider digital transformation journey, combining expertise in technology, data, governance, and change management to deliver practical and sustainable business outcomes,” he added.

Karen Spiteri Bailey, Managing Principal at RSM Malta, said: “We are pleased to welcome Ludwig to RSM Malta at a time when digital transformation and AI are becoming central to how organisations plan, operate, and compete. His experience in leading complex transformation programmes, together with his understanding of both technology and business strategy, adds significant depth to our Digital service line.

“At RSM Malta, our focus is on helping clients respond to change with confidence in a way that is practical, responsible, and aligned with their long-term objectives. Ludwig’s appointment strengthens our ability to support business leaders as they consider how technology and AI can create value, improve resilience, and support sustainable growth,” she concluded.

The appointment forms part of RSM Malta’s broader strategy to continue investing in specialist capabilities that help organisations respond to the evolving needs of the market. 

To discuss how digital transformation and AI can support your organisation’s next stage of growth, contact RSM Malta’s Digital Transformation and AI team.

The post RSM Malta appoints Ludwig Micallef as Director for Digital Transformation & AI first appeared on The Malta Business Weekly.

The Group also continued to expand its third-party hotel management business through the signing of new agreements for future Corinthia-branded properties, supporting the roll-out of its asset-light strategy which is expected to underpin accelerated growth over the coming decade.

Total Group revenues exceeded the €150 million mark for the first half of 2026, with like-for-like revenue increasing by six per cent year-on-year, after excluding the Lisbon hotel following its partial sale in April 2026, as well as the ramp-up phase for the Rome Hotel which was launched midway through the period under review.

On the same basis, excluding the impact of the Lisbon sale and Rome operations, EBITDA increased by 18 per cent to €19 million, compared to the €16 million generated in the first half of 2025. This reflects the strength of the Group’s underlying operations.

Year-end forecasts indicate EBITDA to stabilise at the same level to 2025 notwithstanding lower contributions from the Lisbon asset sold in 2026. Furthermore, mid-year reported losses after tax do not include property revaluations as will be reported at the year’s end financial statements.

The period under review included some significant milestones, including

• the opening of the flagship Corinthia Rome;
• the signing of a new management agreement to operate a luxury property to be developed in Puglia, Italy; and
• the disposal of a majority interest in the Corinthia Lisbon.

The Lisbon transaction was an integral part of the Group’s strategy to monetise its real estate investments over time, with the scheduling of individual asset sales carefully managed to maximise value and returns.

The proceeds from the sale of the majority stake in the Lisbon hotel enabled the Group to allocate over €100 million towards the repayment of bank and other borrowings and to fund an €18 million interim dividend, whilst retaining the Lisbon hotel’s management agreement and a 28 per cent interest in the property.

Group Chairman Alfred Pisani said: “Our focus is increasingly on expanding the Corinthia brand internationally through development and management agreements, generating recurring fee income while relying predominantly on third-party capital for new hotel developments. This asset-light model enables the Group to leverage its development and management capabilities without committing significant capital to property ownership.

“The opening of Corinthia Rome and the addition of Puglia to the Group’s management portfolio mark further progress in the execution of this strategy. These developments build on the recent openings of Corinthia-branded hotels in New York and Bucharest, both owned by third parties and managed by the Group, as well as the Group-owned hotel in Brussels, all of which are now beginning to contribute to earnings.”

Hotel development projects are also progressing in Beverly Hills, Turks & Caicos, Dubai, Doha, Riyadh, Tuscany, Lake Como, the Maldives and Chengdu. Group companies are involved in these projects as hotel operators, development partners or providers of technical services. Virtually all of the capital required for these developments is being provided by third-party partners, underscoring both Corinthia’s strong track record as an operator and developer and the asset-light nature of the Group’s growth strategy.

The Group continues to evaluate strategic options for its other owned assets, including a potential sale of its Prague property, with a view to allocating any proceeds towards debt reduction, further dividends, and strategic capital expenditure and investments. Amendments to the Prague Metropolitan Plan, approved by the Prague City Council and due to come into effect in September, will permit residential development alongside hospitality uses on the Group’s site. These amendments are expected to enhance the property’s development potential and underlying value.

The first half of 2026 demonstrates the resilience of the Corinthia Group’s underlying business model and progress in the strategic evolution of the Group towards a development and management company.

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Economic activity in Malta remained broadly in line with its long-term average, with business conditions showing a modest improvement in July, according to the Central Bank of Malta’s latest Economic Update.

The Bank’s Business Conditions Index pointed to a strengthening in conditions during July, although the indicator remained slightly below its historical average.

The latest data presents a mixed picture across different sectors of the economy. Retail activity continued to grow in June, but at a more moderate pace, while services production also recorded slower growth in May. Industrial production, meanwhile, declined in annual terms and continued to display a volatile pattern.

Tourism remained one of the stronger performers, maintaining its momentum in June.

Consumer confidence weakened in July, although sentiment remained well above its historical average. At the same time, unemployment expectations continued to point towards relatively low unemployment over the coming year.

The labour market also showed some improvement. Malta’s unemployment rate fell slightly to 3.5% in June from May, although it remained higher than the rate recorded a year earlier.

Property market remains strong

Conditions in Malta’s property market remained robust, with both supply and demand continuing to show strength.

The number of residential and commercial development permits approved in July was lower than a year earlier, but increased compared with June. Similar movements were recorded in final deeds and promise-of-sale agreements, reflecting continued activity on the demand side of the market.

Inflation remains below euro area level

Inflation increased marginally in July but remained significantly below the rate recorded across the euro area.

The Harmonised Index of Consumer Prices (HICP) rose to an annual rate of 2.1% in July, up from 2.0% in June. Core HICP inflation, which excludes food and energy, stood at 2.3%.

The Central Bank noted that both headline and core HICP inflation across the euro area were higher than Malta’s, largely because of higher energy inflation.

According to Malta’s Retail Price Index, inflation increased to 2.7% in July.

Government deficit narrows

The government’s fiscal position also improved in June, with the Consolidated Fund recording a smaller deficit than a year earlier.

The Central Bank attributed the improvement primarily to stronger growth in government revenue.

Meanwhile, the annual rate of growth in deposits and credit held by Maltese residents increased compared with May, indicating stronger growth in both areas.

Overall, the August Economic Update points to an economy that continues to expand at a relatively steady pace, supported by strong tourism and property-market activity, while inflation remains comparatively contained. At the same time, slower growth in retail and services and continued volatility in industrial production highlight some of the uneven trends across the economy.

The post Malta economy remains resilient as business conditions strengthen first appeared on The Malta Business Weekly.

During the first half of this year the financial performance of the Group reflected higher core Bank Operating Income and improved operational efficiency, the bank said in a statement on the Stock Exchange.

MaltaPost p.l.c., the Bank’s main subsidiary, also contributed to this positive result with a 12% increase in Profit Before Tax, reaching €3.6 million (H1 2025: €3.2 million).

During this period a one-off share of profit recorded in 2025 from the disposal of assets by an associate company was not repeated. Earnings per Share for the period, now stand at €0.04. Gross Interest Revenues rose by 11% to €21.8 million (H1 2025: €19.7 million), primarily driven by growth in customer lending, the bank said.

Treasury activities also contributed to the increase in interest income through continued optimisation of the Bank’s balance sheet with excess liquidity being employed in Treasury Bills and higher-yielding investment-grade debt securities. Interest Expense increased by 16% to €7.7 million (H1 2025: €6.6 million), driven by both higher volumes of customer deposits and higher interest rates paid on longer-term deposits.

Net Interest Income increased by 8% to €14.2 million (H1 2025: €13.1 million). Net Fee and Commission Income rose by 31% to €3.7 million (H1 2025: €2.8 million), supported by higher business volumes, particularly across commercial and retail lending and wealth management activities. Postal Sales and other Revenues were up by 8% to €23.1 million (H1 2025: €21.4 million), driven by a steady performance across key business areas, particularly parcel and logistics-related activities.

The continued shift from traditional Letter Mail to digital communication channels persisted during the reporting period, while e-commerce and parcel-related services continued as important contributors to revenue growth, the bank said.

Operating Income improved by 9% to €41.5 million from €38.1 million in H1 2025. Employee Compensation and Benefits increased by 7% to €15.2 million (H1 2025: €14.2 million), reflecting a tight and competitive labour market.

Other Operating Costs rose by 3% to €12.9 million (H1 2025: €12.6 million), reflecting continued investment in the business, while remaining well contained through ongoing operational improvements and cost management. Cost Efficiency Ratio of the Bank improved to 49.1% (H1 2025: 54.4%), reflecting stronger income growth and continued cost discipline. At Group level, the cost efficiency ratio also improved to 72.1% (H1 2025: 74.9%).

The higher ratio, when compared with that of the Bank reflects the nature of the postal services industry, which is typically characterised by high volumes, low margins and a labourintensive operating model. Expected Credit Losses (ECL), as set by International Financial Reporting Standard 9 (IFRS 9), resulted in a lower net release of €0.04 million during the first half of the year, compared with a release of €1.0 million in H1 2025.

Financial Position and Capital Loans and Advances to Customers rose by 8% to €1,002.7 million from €929.1 million at FYE 2025. Amounts Owed to Customers increased by 3% to €1,242.4 million from €1,207.3 million at FYE 2025, the bank said.

Bank Loan-to-Deposit ratio increased to 82.9% (FYE 2025: 79.6%). The Bank continued to rely on a diversified funding base, which over the years has proven to be stable. The Bank’s liquidity ratios remained well in excess of minimum regulatory requirements. Group Total Assets rose to €1,555.0 million (FYE 2025: €1,497.6 million).

Equity Attributable to Equity Holders of the Bank increased by 2% to €227.7 million (FYE 2025: €223.7 million). Group Net Asset Value (NAV) per share stood at €1.47 (FYE 2025: €1.45). Group Earnings per Share (EPS) stood at €0.04 (H1 2025: €0.06). Group Return on Assets (ROA) was 1.0% (H1 2025: 1.1%) while Group Post Tax Return on Average Equity (ROAE) was 5.9% (H1 2025: 6.9%). Total Capital Ratio at 18.0% (FYE 2025: 19.9%) exceeded the minimum regulatory requirements. During the first half of 2026, the Group continued to focus on its strategic priorities, including investment in digital transformation, operational efficiency and customer service, the bank said.

The Bank’s planned replacement of legacy systems with a modern core banking platform and enhanced digital channels forms part of a wider programme aimed at improving service delivery, strengthening operational capacity in the areas of regulatory compliance and wealth management services, and enhancing the overall customer experience.

The Bank continued to strengthen its physical distribution channels, complemented by sustained investment in human resources and compliance. These initiatives are expected to contribute to the Bank’s long-term competitiveness while preserving the prudent and conservative business model that has historically underpinned its performance. At MaltaPost p.l.c., the traditional postal environment is expected to remain challenging, while the potential impact of Customs tariff measures on cross-border postal and logistics activities continues to unfold.

That said, MaltaPost remains on the lookout for new and diverse business opportunities. Looking ahead, the Group will continue to pursue measured growth, supported by a strong capital base, sound liquidity, and ongoing investment in technology, operational resilience and customer-facing capabilities. It anticipates sustained stability throughout the latter half of 2026, driven primarily by the continuation of its cautious business strategy, the bank said.

The post Lombard Bank Group registers €11.5 million in pre-tax profit in first half of 2026 first appeared on The Malta Business Weekly.

Backed by a Brussels-approved economic strategy and an injection of public funds that has seen government equity swell to €350 million, the airline was supposed to represent a new era of fiscal responsibility in local aviation. Yet, as the months tick by with zero transparency, the business community and the taxpaying public are left asking an uncomfortable question: are we witnessing the slow-motion prologue to another Air Malta disaster?

The core of the issue lies in a deafening silence from both the airline and the administration. To date, KM Malta Airlines has not filed a single set of audited accounts with the Malta Business Registry. Vague assurances from Finance Minister Clyde Caruana regarding filing extensions ring hollow when deadlines continuously pass unfulfilled. When inquiries from the press are met with stonewalling, it invites the worst kind of speculation. In the absence of audited figures, observers naturally assume the worst, with rumours swirling that the carrier is losing money.

This is not merely a matter of administrative bureaucracy; it is a fundamental breach of public trust. Taxpayers are involuntary shareholders in this enterprise, having contributed hundreds of millions in hard-earned capital. They are not asking for trade secrets; they are demanding the basic right to know whether public funds are being stewarded responsibly and whether the airline is adhering to the viability plan promised to Europe.

Transparency does not undermine a national airline; rather, opacity is what ultimately destroys it. Shrouding the company’s financial health in secrecy only serves to erode confidence among business partners, passengers, and staff who deserve stability, not a repeat of past failures.

The Nationalist Party has rightly ratcheted up pressure on the government, emphasising that accountability is non-negotiable where public money is concerned. Good governance requires that those entrusted with taxpayer funds answer for how those resources are utilised. If KM Malta Airlines is performing well and meeting its targets, the administration should be eager to publish the numbers and reassure the public. If it is struggling, hiding the truth will not make the losses disappear – it will only delay the inevitable reckoning until the damage is far harder to repair.

Malta cannot afford another aviation debacle. The government and the airline’s leadership must drop the defensive posture and come clean immediately. By publishing the outstanding accounts and detailing a clear financial outlook, they can (hopefully) dispel the rumours and chart a credible path forward.

Anything less is a disservice to the Maltese public and another severe blow to the principles of transparency and good governance.

The post EDITORIAL: Opening the books – Will KM Malta Airlines avoid Air Malta’s fate? first appeared on The Malta Business Weekly.

The company said that while electricity demand in previous years typically peaked between noon and 3pm, before rising again at around 7pm as people returned home from work, this summer has seen a marked change in consumption patterns.

Demand is now reaching high levels from around midday and remaining elevated until late in the evening, compared with previous summers when consumption tended to ease between 3pm and 7pm, the statement said.

The trend comes against a backdrop of sharply rising household electricity use.

Recent Eurostat data shows that electricity consumption by Maltese households increased by almost 66% between 2015 and 2024, the highest increase in the EU and well above the EU-wide rise of just over 3% during the same period.

In 2023, Malta recorded what was then an all-time peak electricity demand of 663MW. That record was surpassed last month when demand climbed to 741MW, almost 12% higher, it said.

With high temperatures continuing over the coming days, electricity demand is expected to remain elevated, Enemalta said.

The company encouraged customers, including commercial entities, to use electricity efficiently without compromising their comfort or health.

Enemalta said setting air-conditioning units at around 25°C provides effective cooling while avoiding unnecessary energy consumption.

It also advised consumers to keep doors and windows closed while using air-conditioning and to cool only the rooms that are actually being used.

The post Malta’s electricity demand staying near peak levels for longer, Enemalta says first appeared on The Malta Business Weekly.

According to Camenzuli, the scale of adoption places GO among the more advanced AI users in Malta’s business landscape. From an AI-powered customer chatbot that autonomously resolves the majority of digital customer interactions, to an internal platform enabling employees to build their own AI agents, the company’s approach is focused on practical applications that deliver measurable results.

“For many companies, AI might still be at conversation level but at GO, it has become part of how the business operates every day,” says Camenzuli, who has been leading the company’s digital transformation since 2018.

He explains that GO’s strategy is built around two complementary pillars.

“The first is customer-facing AI, centred around GO’s next-generation chatbot. The second is IntelliAsk, the company’s internal AI platform designed to give employees secure access to advanced AI capabilities while protecting company knowledge and data.”

GO’s customer chatbot, launched in 2024, marked a major shift away from traditional automated support tools.

Rather than forcing customers through predefined menus, the conversational system allows them to explain their issue in their own words and receive a response tailored to their specific circumstances. The technology is integrated across WhatsApp, Facebook Messenger and GO’s website chat channels, creating a consistent customer experience regardless of where a conversation begins.

“The difference is not simply that the chatbot can answer questions. It can take action,” says Camenzuli, explaining that when a customer reports broadband issues, the system can run diagnostics, identify potential faults and automatically create a service request where required. It can also check account information, billing details, roaming settings, service status and appointment details, providing customers with immediate answers without requiring human intervention.

“Our objective was never to remove human interaction from customer service but to use AI to remove repetitive processes and free up employees to focus on more complex customer needs,” he explains.

“When a conversation does require human support, the chatbot hands it over together with an AI-generated summary, so customers do not have to repeat their story and agents have immediate context,” he adds.

Behind the scenes, GO has also invested heavily in ensuring that its AI systems continuously improve. Customer conversations are analysed to identify missed opportunities, recurring issues and areas where the experience can be improved.

“AI does not make the customer experience perfect,” Camenzuli is careful to note. “What it does is facilitate the journey. We are on a continuous journey of improvement, and our goal is to keep delivering a consistently good experience for our customers.”

That same focus on continuous improvement carries through internally, via IntelliAsk, GO’s secure AI platform available to employees across the Group.

Rather than simply purchasing individual AI subscriptions, GO created its own environment where employees can access multiple AI models, interact with company information securely and build reusable AI solutions.

“The reasoning is strategic. AI capability becomes an organisational asset rather than something tied to individual employees which means that when someone creates a useful AI workflow, that knowledge stays within GO and becomes part of the company’s collective intelligence,” explains Camenzuli.

That approach has already generated strong employee engagement. GO staff have created hundreds of AI agents through IntelliAsk, with a growing number curated and made available through an internal marketplace.

The applications range from technical operations to everyday business processes, with teams across areas such as network operations, security and project management building agents that support tasks including log analysis, alert processing, documentation and delivery.

Importantly, the adoption has not been limited to technology specialists. Employees across departments including retail, facilities, HR, legal and sales are finding ways to use AI to improve their own workflows.

One of the clearest impacts of this approach is that AI is transforming employees from users of technology into creators of solutions.

Beyond customer care and employee productivity, AI is already delivering measurable operational improvements across the organisation. Contract management processes are being automated through AI extraction of key information from agreements, finance teams are using AI to process documents that once required manual input, and network teams are cutting the time spent on complex technical tasks.

“Software development processes that once took days can now be completed in minutes,” he added. Camenzuli stresses that for a telecommunications company, however, innovation must be balanced with responsibility.

“GO has placed security, privacy and governance at the centre of its AI approach,” he says. “Data remains within trusted infrastructure, user permissions are respected, and AI interactions are monitored.”

“In fact, our ambition is not to create a business operated by machines but to see AI as a tool that allows people to work smarter and make better decisions. This is why internally, we apply GO’s ‘Getting better every day’. It’s a principle that reflects our broader transformation journey,” concluded Camenzuli.

It is a philosophy that ties back to GO’s wider purpose: to drive a digital Malta, where no one is left behind.

The post ‘AI at GO isn’t a pilot anymore. It’s how the company runs’ first appeared on The Malta Business Weekly.

Malta’s logistics operators and consumers are already experiencing the economic impact of the European Union’s Emissions Trading System (ETS). The result is straightforward: higher transport costs that ultimately increase the price of almost everything imported into Malta. By 2028, a second carbon pricing mechanism, ETS2, will add further pressure, risking the affordability of Malta’s essential connectivity with Europe.

The results of this new regulation, over and above ETS, carry the very serious risk of Malta’s connectivity to Europe, our lifeline, becoming unaffordable.

No one disputes the importance of Europe’s transition to a lower-carbon future. Reducing emissions and promoting more sustainable transport are necessary objectives. However, climate policy must recognise that not all member states face the same realities. For Malta, geography is not a minor consideration but a permanent economic constraint.

As an island nation state, Malta depends entirely on reliable sea links to mainland Europe. Every day, food, medicines, construction materials, industrial supplies and consumer goods arrive through these maritime connections. Unlike continental countries, Malta has no road or rail alternatives. Sea transport is not a choice; it is our economic lifeline.

Before introducing another major carbon pricing mechanism through ETS2, the European Union must fully acknowledge the pressures Malta’s international transport sector is already facing.

Maltese international trailer operators have no option but to rely on maritime services to reach European markets. A typical return journey between Malta and Genoa covers around 1,400 nautical miles, creating a structural disadvantage that mainland competitors do not face. Yet these operators sustain Malta’s connectivity by generating the freight volumes that support six weekly Ro-Ro services linking Malta with Europe.

The sector is already under considerable strain. Current ETS measures add approximately €1,000 to the cost of each round-trip trailer. These costs cannot simply be absorbed by operators and are ultimately passed on to Maltese businesses and consumers.

At the same time, operators purchase around 90% of their diesel in Europe, where prices average approximately €2.50 per litre. They also face rising port charges, terminal fees and road tolls across the continent. Together, these increasing costs are placing Malta’s transport sector under growing competitive pressure.

This is why European policy must reflect the realities of island member states. While mainland operators can benefit from road-only routes, rail alternatives and shorter supply chains, Malta has none of these advantages. A one-size-fits-all approach risks placing a disproportionate burden on economies that depend entirely on maritime connectivity.

The ongoing review of the EU ETS framework offers an opportunity to recognise these structural differences. Maltese transport operators are fundamentally different from their continental counterparts because their business model depends entirely on sea transport. Future legislation should reflect this reality.

The challenge will become even greater when ETS2 is introduced in 2028. Designed to extend carbon pricing to road transport and buildings, ETS2 aims to accelerate decarbonisation by increasing the cost of fossil fuels. While the objective is understandable, its impact on island economies requires careful consideration.

Current European assessments suggest ETS2 could increase diesel prices by around €0.13 per litre under moderate carbon price assumptions, with higher scenarios reaching between €0.30 and €0.50 per litre by 2030. For Maltese operators already paying around €2.50 per litre, this represents an additional increase of between 5% and 20%.

The consequences extend well beyond the transport sector. Higher freight costs inevitably explain the higher prices for essential goods, increasing costs for businesses and households alike. ETS2 therefore extends beyond the transport sector, becoming a broader issue with implications for national competitiveness, affordability, and economic resilience.

ATTO believes that sustainability and competitiveness must go hand in hand. Malta’s transport sector is committed to supporting Europe’s climate objectives, but operators need realistic pathways, targeted investment and policies that recognise the realities of operating from an island state.

If ETS-related revenues are collected, a meaningful share should be reinvested in practical decarbonisation measures, including cleaner vehicle technologies, alternative fuel infrastructure and financial support for operators modernising their fleets. The transition must be supported by investment, not regulation alone.

This is an issue that requires national unity. The government, the Opposition, relevant ministries, Malta’s members of the European Parliament and all stakeholders must work together to ensure Malta’s unique circumstances are recognised at European level.

The question is not whether Malta should participate in the green transition. It should and it will. The real question is whether Europe can achieve its climate ambitions while safeguarding the competitiveness of island economies, protecting the affordability of essential goods and preserving the connectivity on which Malta depends.

Climate action must remain ambitious, but it must also be practical, balanced and fair.

Joseph Bugeja is the chairman of ATTO

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