Maritime law expert Ann Fenech issues a stark warning, asserting that enticing major shipping lines back to EU ports, once they migrate due to the upcoming environmental tax, would be “close to impossible.” Her insights, shared with The Malta Independent on Sunday, shed light on the urgency of addressing potential repercussions, as says an article published on independent website.
Disappointment In Commission’s Approach
Expressing disappointment in the European Commission’s delay in addressing the industry’s concerns, Fenech emphasizes the absence of a “wait and see” luxury in international shipping. The industry operates on the premise that time is money, and any hesitation may lead to irreversible consequences.
Risk To Maritime Resources And Southern European States
Fenech underscores the potential serious repercussions on maritime resources in southern European states, particularly Malta, if shipping lines opt for non-EU ports like Tangier Med or Damietta. This concern arises as a response to the environmental tax slated for introduction by the European Union next year.
Concerns Raised By The Malta Maritime Forum (MMF)
The MMF expresses “imminent risk” concerns regarding major shipping companies pulling out of Malta due to the impending environmental tax. MMF CEO Kevin J. Borg foresees a likely scenario where Malta loses its role as a transshipment hub, impacting the region’s maritime activities.
Critique Of Emission Trading Scheme (ETS) Implementation
Acknowledging the admirable goals of the EU’s Emission Trading Scheme (ETS), Fenech and Borg critique its current flaws. They question its regional specificity and express concerns about unintentional incompatibility with Europe’s core principles and carbon neutrality goals.
Financial Drawbacks For Shipping Lines
The EU ETS Directive obliges ships to surrender Emission Unit Allowances (EUAs) to offset carbon emissions. However, Fenech highlights the financial burden for shipping lines, estimating an additional €34 million in costs for those using EU ports in the Mediterranean.
Challenges For Transshipment Ports In The Mediterranean
Fenech stresses the importance of transshipment ports in the Mediterranean, citing Malta Freeport as a vital center. With the EU ETS requiring environmental tax payments for ships arriving at EU ports, there’s a risk that shipping lines might divert to non-EU ports, impacting the profitability of EU ports.
Call For Immediate Commission Action
Fenech urges the European Commission to reconsider the application of the ETS promptly. She emphasizes the need for amendments, especially concerning member states in close proximity to non-member states, to prevent unintended negative consequences.
Impact On Malta’s Commercial Connectivity
The potential shift of shipping lines to non-EU ports may significantly reduce traffic at Malta Freeport. Fenech outlines the domino effect on profitability, worker livelihoods, and associated services, affecting Malta’s commercial connectivity with the Far East.
Proposed Solution, Strategic Exemptions
Fenech proposes exempting voyages between non-EU and EU ports in the Mediterranean from surrendering allowances. This targeted exemption aims to discourage shipping lines from opting for non-EU ports and contributing to an increased carbon footprint.
In conclusion, Fenech urges the European Commission to reflect on the consequences and take immediate measures to avoid the unintended negative effects of the environmental tax on the shipping sector.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: independent
