By pushing traffic to non-EU like Port Said and Tanger Med, the EUETS achieves “Carbon Leakage.” The environmental impact remains the same (or worsens due to longer deviations), but the economic value is stripped from the European country
The MMF presented its concerns and recommendations about EU ETS maritime before Parliament’s Standing Committee on Foreign and European Affairs on the latter’s invitation.
A comprehensive presentation of the Forum’s evolving position was led by Chairman, Godwin Xerri and Vice Chairman, Alex Montebello. They maintained that the Forum’s consistently supported decarbonisation and the objectives of EU ETS. Nevertheless, they showed how, in line with their warnings ahead of its enactment, the application caused serious competition distortions and leakages with disproportionate risks on Malta and other member states. These risks compromise fair competition, solidarity and other fundamental EU principles.
The Forum showed how EU ETS on maritime was not achieving its climate change objectives because ships still traversed the same sea but were increasingly diverting their transhipment operations away from the EU ports instead. Besides this carbon and business leakage, the Directive was also diverting investment in new transhipment ports outside of the Union.
In the context of Malta’s dependence on global maritime connectivity, the presentation clearly outlined the risks of loss of mainline services with direct effects on the whole of the economy including connected feeder services, towage, pilotage, port services, terminal operations, stevedoring, mooring, ship agency, legal services, bunkering, importation of raw materials and supplies, and the manufacturing industry. Loss of connectivity can cause the relocation of certain industry away from Malta due to market proximity considerations and limitations of export channels causing loss of jobs, investment and balance of payments imbalance for the country.
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