Malta Business Bureau reacts to 2040 EU climate target recommendation

In its first reaction to the European Commission’s recommendation for a 2040 EU climate target, the MBB reiterated its support towards the EU achieving climate neutrality by 2050 and acknowledges that intermediary targets are necessary to provide a gradual transition for all stakeholders, including businesses; yet cautions on the competitiveness impact and additional burdens that businesses may continue facing.

MBB President Alison Mizzi stressed that; “Businesses are, and will continue to be, at the centre of the green transition through their contribution towards innovation, and their readiness to invest. They are everyday looking into novel solutions to reduce their environmental impact, through renewables, energy efficient solutions, circular economy solutions, and so on, when conditions are favourable.”

“At the same time, it must be emphasised that the current environmental policy drive has already placed great stress on businesses through excessive reporting requirements and disproportionate implementation costs, as well as through risks of carbon leakage which degrades economic competitiveness,” Mizzi continued.

The MBB urges EU policymakers to ground future climate legislation in realism and account for the different obstacles or limitations faced by specific regions and industries. This includes ensuring that the post-2030 policy framework provides adequate support and incentives for the most affected and vulnerable actors, especially SMEs.

The European Commission has recommended to reduce the EU’s net greenhouse gas emissions (GHG) by 90% by 2040, compared to 1990 levels. This is being considered a significant step towards achieving climate neutrality by 2050, which is at the heart of the European Green Deal. The target is also in line with the Paris Agreement to limit temperature increases to 1.5C above pre-industrial levels.

The MBB emphasised the importance of an open and constructive dialogue with business stakeholders, to help identify potential concerns and adequately address them in future EU proposals. The MBB shall remain committed to engage with the EU institutions to put forward the Maltese business perspective. Only through a collaborative and participatory approach, one can ensure a smooth, and competitive transition to a climate-neutral Europe.