As we sail into a new year, let's set our course to explore the highlights of Malta's maritime endeavors in 2023 and peer into the horizon of what's on deck for 2024.
Sustainability Sets Sail
In 2023, sustainability took center stage in Malta's shipping and yachting industries. The EU Emissions Trading System (ETS) underwent changes, ushering in a new era of accountability for greenhouse gas emissions. Ship operators now face a phased allocation of emission allowances, starting at 40% in 2024 and going up to 100% by 2026.
The FuelEU Maritime initiative, a collaborative effort between the European Council and Parliament, aims to tighten the reins on ship energy consumption. With incremental reductions from 2% in 2025 to an ambitious 80% by 2050, this initiative charts a course towards cleaner seas.
Malta is riding the sustainability wave too. The 2024 Malta Budget revealed further plans to let large vessels switch off their engines while docked, curbing air pollution and enhancing local living conditions. Shore-to-ship systems at Port il-Kbir further strengthen Malta's commitment to cleaner air.
Building the Future: Infrastructure Updates
Malta's maritime sector is undergoing a transformation in ship maintenance and repair, with ongoing dredging operations and a hefty investment of EUR 25 million in the expansion of Pinto and Lascaris Wharves. A new cargo facility near Kordin is also on the horizon.
Implementation of a strategic vision for the Superyacht industry
The superyacht industry is poised for remarkable growth and this continues to be reflected with the implementation of a strategic vision for the superyacht industry. This comprehensive framework focuses on product development, human resources, legal reinforcement, and environmental development.
The vision underscores Malta's commitment to sustainable growth, positioning the country as a global leader in the superyacht sector. With the wheels set in motion, Malta is actively steering towards becoming a preferred destination for superyacht enthusiasts worldwide.
Reduced VAT Rates for Short-Term Charters
On October 6th, 2023, Legal Notice 231 of 2023, entitled the Value Added Tax Act (Amendment of Eight Schedule) Regulations, 2003, introduced a new reduced rate of value added tax (VAT) catered to short-term charters or hirings of a pleasure boat which does not exceed a cumulative period of five weeks over a running twelve-month period.
These amendments shall take effect on January 1, 2024, applying to all pleasure yacht charters entered from the said date onward.
Navigating Sanctions
2023 marked significant dates in economic sanctions against Russia. Notable among them was the 12th package, which addresses tankers and their potential role in circumventing import bans. This package introduces a requirement for individuals and legal entities in the EU involved in the ownership of tankers to notify the relevant authorities when selling tankers to third countries. The notification obligation applies to owners who are citizens or residents of EU Member States, as well as EU-based legal entities. Owners or their representatives must submit notifications to the relevant authorities of the Member State by February 20, 2024 and should encompass any sale executed since December 5, 2022. The call for transparency in tanker sales underscores Malta's commitment to international sanctions.
Ultimately, the Maltese maritime sector has achieved notable success, propelled by various supportive measures. However, the journey forward emphasizes the crucial necessity of fostering collaboration and cooperation. These initiatives are vital to guaranteeing the sustained growth and realisation of the complete potential of the maritime economy.
Written by Dr. Claudia Borg, Lawyer