The Malta Business Bureau wants the European Commission to revise the Combined Transport Directive to reflect island states’ realities.
In an interview with this media house, Mario Xuereb, MBB CEO, said that the directive gives incentives for using lower emission transport modes when choosing alternative transport methods which are less polluting, by combining road legs with more eco-friendly rail or waterway legs for cargo for instance.
“But the problem with Malta is that its connectivity with Europe is based on the sea, and the sea, unless only for short distances, is not considered under this directive,” he said. The MBB is advocating for the EU to acknowledge island-mainland connections as combined transport, to ensure fairer treatment.
Turning to EU greenhouse gas emissions targets, he said that they need to be met, and that many local businesses take initiatives to help reach those targets. “What is important is that there be some leeway for a number of sectors to ensure that they are not negatively impacted or put out of business.”
“We are not against there being environmental targets which include fixed dates, but the way those targets are met needs to be different for everyone.”
Xuereb called on the European Union to introduce “insularity tests” when drafting new legislation, to assess how EU policies disproportionately affect island states and peripheral regions such as Malta. He argued that while the EU Single Market is one of the Union’s greatest achievements, it does not operate on a level playing field for all members, as islands face permanent structural disadvantages that mainland countries often overlook.
Founded in 1996 and marking its 30th anniversary this year, the MBB represents Maltese business interests in Brussels on behalf of the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association. The bureau engages directly with EU institutions, Malta’s Permanent Representation, and major umbrella organisations such as BusinessEurope, EUROCHAMBRES and HOTREC to influence policy and funding decisions that affect Maltese businesses.
Xuereb described Malta’s disadvantages as a “tax on geography”, stressing that insularity creates higher costs and logistical constraints, particularly in connectivity, transport, and access to markets. While the Single Market has driven growth across Europe, he believes it must better account for regional realities if it is to remain effective. According to Xuereb, fair access to the Single Market requires recognition that not all businesses start from the same position. Being located in an industrial hub in central Europe is fundamentally different from operating on a small island on the EU’s periphery.
To address this imbalance, Xuereb advocates closer cooperation among island states to collectively push for policy changes. However, he acknowledges that it remains difficult for policymakers in mainland Europe to fully grasp island realities. This is where “insularity tests” could play a role, by systematically evaluating the impact of proposed directives on islands and peripheral regions before they are finalised.
He argued that all EU legislation should take island-specific conditions into account, citing several initiatives currently under discussion, including the Public Procurement Act, the Circular Economy Act and the Digital Omnibus. In each case, Xuereb said policymakers should assess how such measures affect islands differently from mainland regions.
Connectivity is one of Malta’s most persistent challenges. Xuereb noted that imports and exports depend almost entirely on sea and air transport, making the country particularly vulnerable to disruptions. He recounts how, during a recent EU meeting, MBB representatives showed images of empty supermarket shelves in Malta following a storm that disrupted shipping. The visual evidence, he said, made a strong impression and sparked immediate discussion, illustrating the importance of backing arguments with concrete data and real-world examples.
At EU level, an Islands Strategy is currently being discussed, though it remains at a conceptual stage. Xuereb expected it to lead to formal recognition of the permanent geographic constraints faced by islands like Malta, alongside clear remedial measures. These should ensure that islands can both benefit fully from EU initiatives, including the Single Market, and mitigate the impact of legislation, particularly in sectors such as maritime and aviation transport.
Xuereb also placed Malta’s concerns within the broader priorities of the current European Commission, led by Ursula von der Leyen, which has placed renewed emphasis on competitiveness and simplification. From Malta’s perspective, competitiveness is undermined by added connectivity costs that do not affect mainland businesses to the same extent. Xuereb reiterates that a “one-size-fits-all” approach cannot work if the EU wants all regions to compete on equal terms globally.
On simplification, he pointed to the regulatory burden introduced by the previous Commission, particularly in relation to reporting requirements linked to environmental targets. While Maltese businesses support environmental objectives, Xuereb said the volume and complexity of reporting imposed significant administrative costs, especially on smaller firms. He welcomes the Commission’s recent shift towards reducing red tape, including the “one-in, one-out” principle, under which any new reporting obligation should be offset by the removal of an existing one.
The MBB’s role, Xuereb explained, is both informational and strategic. It gathers data from businesses to understand their challenges, tracks EU proposals, and explains their implications to Maltese companies. The bureau also participates in EU-funded projects aimed at developing tools to help businesses adapt to new requirements. Additionally, the MBB acts as a technical ally to the Maltese government, basing its policy positions on consultations with members of the Chamber of Commerce and the Malta Hotels and Restaurants Association.
Given Malta’s relatively small presence in Brussels, Xuereb stressed the importance of collaboration. The MBB is the only organisation in its sector with a permanent office there, with two of its nine staff members based in Brussels. As a result, Malta’s influence depends on coordinated efforts among government, agencies, business organisations and political representatives. Xuereb says the MBB maintains open communication channels with ministries, Malta’s Permanent Representation, Maltese MEPs and the EU Commissioner from Malta.
Building alliances beyond Malta is also a priority. Through participation in meetings organised by European umbrella organisations, the MBB seeks to ensure that Malta’s concerns are understood and reflected in broader policy debates. This is particularly important for SMEs, which make up the vast majority of Maltese businesses. Xuereb notes that SMEs rely heavily on the MBB for information and guidance on EU initiatives and funding opportunities.
Looking to the future, Xuereb identified the digital sector as a key area of potential growth for Malta. While the country already has strengths in tourism, financial services and other traditional sectors, he believes digital services can cut across and support multiple industries. He highlights the growing number of digital start-ups in Malta, government support for the sector, and areas such as cybersecurity as promising niches.
Despite these opportunities, Xuereb pointed to specific EU policies that remain a cause for concern. One example is a proposal on Clean Corporate Vehicles, which initially appeared to require companies with heavy vehicles to fully electrify their fleets. While environmentally positive in principle, such a requirement would pose serious challenges in Malta, where space constraints make it difficult to install large-scale charging infrastructure. Through dialogue with the European Commission and coordination with other stakeholders, the MBB helped ensure that the proposal would not make electrification mandatory for heavy vehicles, though Xuereb said vigilance is still needed.
