As part of the EU’s Green Deal to reduce greenhouse gas emissions, the Emissions Trading System (ETS) will, from January 2026, impose a full 100% charge on emissions.
“To Malta’s logistics sector, this is another extra challenge over and above the reality of our island’s geography and several layers of complex EU regulations,” said Joseph Bugeja, Chairman of the Association of Tractor and Trailer Operators (ATTO). “Unless proportional mechanisms are introduced, the ETS will significantly erode our competitiveness.”
Together with the Island Nations Advocacy Group (INAG), ATTO has been lobbying for reforms that recognise the realities of island logistics.
“For island operators, the practical implications are very different. Costs are higher, compliance is more complex, and margins are tighter,” Bugeja explained.
He pointed out that the Combined Transport Directive, written decades ago, still fails to automatically cover maritime and road operations linking islands to the mainland. “This puts Maltese international trailer operators at a disadvantage compared to their continental peers.”
Malta’s international trailer operators move around 3.2 million cubic metres of cargo each year, comprising full inbound trailers and about 40% full outbound ones. Yet, as Bugeja observed, “EU rules are often written with mainland operations in mind.”
Around 60% of incoming trailers return empty to Genoa due to Malta’s trade imbalance, adding costs that operators must absorb. Moreover, Maltese operators “waste” a cabotage right by simply crossing the sea, limiting them to just two loading or unloading operations in another EU state within a seven-day period. This restricts opportunities to offset costs through inland transport and weakens competitiveness for Maltese, Irish, and Cypriot trailer operators.
At the heart of Malta’s logistics activity lies Valletta Gateway Terminals (VGT), the island’s multi-purpose cargo terminal handling breakbulk, conventional, and Roll-on/Roll-off (Ro-Ro) traffic. Through these operations, consumer goods, raw materials, pharmaceuticals, and export produce move via trailers shipped mainly on Grimaldi Lines and Grandi Navi Veloci (GNV).
These carriers offer seven weekly calls between Malta and ports including Salerno, Livorno, and Genoa, gateways to the wider European network. Most trailers are shipped unaccompanied, with mechanical horses based in Italy to complete the onward road leg.
Given Malta’s isolation, intermodal operations are the norm for local freight forwarders. Many deliberately choose longer sea routes to reduce road travel distances, a practice Bugeja said “reflects our operators’ adaptability and commitment to sustainable logistics.”
Representing over 80% of Malta’s traffic with the EU, ATTO is urging policymakers to ensure that revisions to the Combined Transport Directive take into account the needs of small and remote island nations.
“Recognition of maritime-to-road intermodality as Combined Transport is not just about compliance,” says Mr Bugeja. “It’s about fairness and ensuring that Malta can compete on equitable terms.”
ATTO’s collaboration with INAG, which brings together operators from Ireland, Malta, and Cyprus, is giving island nations a stronger voice in Brussels.
“We can highlight realities often overlooked, such as cabotage restrictions, weekend driving bans, and the administrative burdens of transiting goods via third countries. These are not theoretical issues; they impact daily operations, costs, and competitiveness.”
Bugeja stressed that Combined Transport is not only an environmental initiative but a necessity for island nations.
“Our connectivity depends on seamless transitions between road, ferry, and occasionally rail. Unaccompanied trailers are critical for maintaining efficient supply chains. Ireland’s new rolling motorway between Cherbourg and Mouguerre shows the benefits of multi-modal solutions. Malta needs similar recognition for its freight links to the EU mainland.”
Beyond legislation, ATTO works with Transport Malta and the Malta Chamber of Commerce to ensure the sector’s priorities are heard.
“We are working on multiple fronts. We want rules that are fair and reflective of island realities. At the same time, we encourage members to adopt sustainable practices, because the future of logistics depends on balancing efficiency with environmental responsibility.”
Sustainability, he noted, has become inseparable from competitiveness. The ETS is expanding its reach—from 40% of verified emissions in 2024 and 70% in 2025 to full coverage in 2026.
For Maltese operators, this translates directly into higher freight costs and tighter margins, particularly on short-sea routes where economies of scale are limited. “Operators are being asked to absorb costs they cannot control,” Bugeja said.
“Unless proportional mechanisms are introduced for islands, the ETS could significantly erode our competitiveness.”
ATTO’s and INAG’s joint efforts have reached the highest EU levels. INAG has addressed the European Commission, including President Ursula von der Leyen, outlining the need for the automatic recognition of maritime freight operations linking island nations to the mainland as Combined Transport.
“It’s about fairness and inclusion. Recognition based on geographical necessity, rather than arbitrary thresholds, ensures that island operators can compete on a level playing field.”
Despite the hurdles, Bugeja said Maltese operators have adapted impressively. “Some local companies demonstrate what can be achieved with modern fleets and innovation,” he said. “But advocacy remains essential. Without reforms tailored to island realities, regulatory pressures could stifle growth and weaken Malta’s role as a Mediterranean logistics hub.”
He highlighted the sector’s resilience and strategic importance. Malta’s ports, airports, and road networks are well integrated, enabling the timely movement of bulk goods, high-value components, and time-sensitive shipments.
“Island logistics is complex, but with proper planning, it can be highly efficient,” he said. “We need policies that recognise this complexity and support operators in delivering reliable, sustainable services.”
Looking ahead, ATTO will continue promoting sustainability while lobbying for reform.
“Our members are committed to excellent service and reducing environmental impact. But we cannot do it alone. EU institutions and Member States must recognise that islands face unique challenges and that to compete fairly while contributing to Europe’s transport and environmental goals, connectivity must be fair and the unique realities of Malta as an island state fully acknowledged.”
READ THE 28TH EDITION OF THE CORPORATE TIMES:
