Empowering EU Islands in the Climate Transition
MEP Peter Agius highlights the unique challenges EU islands face under the European Green Deal and ETS maritime rules.
Mr. Agius, how would you describe the current challenges EU islands face in balancing economic development with sustainability, especially in light of the EU policies like the Green Deal and ETS?
First of all, we are islands, so we are the first to gain from the fight against climate change. For instance, if sea levels increase, islands are the territories who would have the most dramatic disadvantages with the rising sea levels, right? But as islands, like Malta, we are also very much exposed to international competitiveness, because we are not a landlocked country with neighbouring countries which you can trade, but we need to open ourselves to the world.
So, island competitiveness is more exposed to global factors and when we speak about climate change and the Green Deal, the European Union must take this into account. We cannot fit islands into the same dynamics as continental territories, big cities, big member states.
We cannot fit islands into the same dynamics as continental territories, big cities, big member states.
We need to keep in mind that these changes can have a dramatic impact on islands. For instance, when it comes to ETS and ETS maritime, Malta is exposed to competitiveness with ports in the north of Africa, which are now taking up parts of the market, which was available to Malta before. But because of the Green Deal rules, there are operators, which are seeing opportunities in investing in Africa to bypass the EU rules when it comes to ETS maritime.
We must be careful. We are all stakeholders in our fight against climate change, we all need to advance environmental protection and the fight against climate change. But at the same time, we need to assess very clearly the impact of these rules on the competitiveness of island territories like Malta.
Why are islands particularly vulnerable to policies like Maritime Transport in ETS?
By their very nature, islands are heavily reliant on international trade and are more exposed to global dynamics. Policies like the ETS Maritime impose additional burdens on islands like Malta, which are not felt as strongly by larger or landlocked EU member states.
By their very nature, islands are heavily reliant on international trade and are more exposed to global dynamics.
What is the concern with the way EU rules are applied to international shipping?
There is concern that shipping companies might choose to avoid EU ports altogether to escape the application of EU rules and the related taxes on international shipping routes. This affects island nations like Malta that operate free ports. These ports, which serve as transit points for container storage and redirection, are now disadvantaged compared to non-EU ports, such as those in Northern Africa.
How might shipping companies bypass these rules?
To avoid the ETS Maritime regulations, companies can simply plan routes that exclude any EU ports. This creates a clear competitive disadvantage for EU member states and undermines the original intent of the rules – to reduce emissions.
What is the solution you propose?
We need a more globally coordinated system of rules. Instead of imposing ETS measures unilaterally at the EU level, these issues should be addressed through international organizations like the International Maritime Organization (IMO).
Have residents on islands already experienced higher prices or reduced transport services?
Yes. For example, if shipping companies avoid Malta to bypass EU rules, this affects transshipment operations. While 90% of the goods may be for re-export, the remaining 10% could be for local use. When shipping routes change, this affects the frequency and reliability of deliveries for local consumption.
What about the cost implications?
The ETS Maritime currently adds about 40% of the full tariff and is being phased in over three years, reaching 100%. While the current price impact is still moderate, it is being felt, especially when combined with other factors like the Carbon Border Adjustment Mechanism (CBAM) and the crisis in the Red Sea. Together, these have significantly increased shipping and product costs, particularly for construction materials.
Do you believe ETS undermines the principle of territorial continuity?
Absolutely. The concept of territorial continuity, particularly in countries like France and Italy, involves providing special assistance to islands. Islands already face natural disadvantages in access, pricing, and availability of products. Adding ETS further exacerbates these challenges.
What changes are needed in EU policymaking for islands?
We need more evidence-based, data-driven decision-making that considers the specific effects on islands before implementing new rules. The current approach often applies the same burden to islands as it does to mainland territories, which is unfair. The EU treaties themselves call for cohesion policies that give special attention to islands.
There are some exemptions in ETS like the exemption for passenger vessels operating between islands with fewer than 200,000 residents and other ports within the same Member State. Does this exemption go far enough to support island communities?
Not really. While it’s positive that exemptions exist, ideally the rules should be designed with islands in mind from the start. The need for multiple derogations reveals that the policies weren’t adequately tailored. For example, Malta’s ferry services still use 30-year-old vessels and need exemptions from ETS. My vision is to have state-of-the-art transport systems that don’t require derogations at all.
What measures should be introduced to level the playing field for islands?
We need more consultation and involvement of island communities at an earlier policy stage. EU impact assessments must include island-specific data, especially in sectors like transport. The European Commission should be required to assess the territorial impacts of legislation to ensure it doesn’t unfairly burden islands.
We need more consultation and involvement of island communities at an earlier policy stage. EU impact assessments must include island-specific data.
Should the EU consider reinvesting ETS revenues locally to help islands?
Reinvesting ETS proceeds into sustainable transport and renewable energy for islands is a good initiative, but it’s not enough. The core issue is that the rules themselves create a systemic competitive disadvantage. The solution lies in smarter regulation from the outset, with reinvestment as a complementary measure.
Looking ahead, what is your vision for EU support to islands?
Beyond territorial impact assessments, we need political unity among island representatives – whether from Malta, Cyprus, Ireland, or the Greek and Swedish islands. By forming strong alliances and presenting unified arguments backed by data, we can advocate more effectively. The European Commission should support this by improving data collection and implementation reports, such as those for ETS Maritime. This will form the foundation for a robust EU strategy that enables islands not just to survive, but to lead in sustainable development.