24 Jul Interview with Miriam Dalli, Minister for the Environment, Energy and Enterprise of Malta
The Ministry of Environment, Energy and Enterprise has quite a large portfolio and a wide number of responsibilities, being simultaneously tasked with driving innovation and entrepreneurship in the country while achieving Malta’s ambitious renewable energy and sustainability targets. You’ve been serving as minister since November 2020. To start this interview, could you give us a brief overview of your mandate and vision. How are you planning to marry economic and enterprise development with sustainability?
Before becoming minister, I was a member of the European Parliament and Vice-President for the Social Democrats responsible primarily for the European Green Deal. I came to Malta to serve as minister because Malta is committed to moving and following the transition toward carbon neutrality by 2050 as part of the European Green Deal. The ministry covers environment, but also energy and enterprise because all three sectors are linked together. I believe that connection is stronger than ever, as Malta’s decarbonization in the energy sector is obviously linked to the green agenda and hence the environment. The private sector plays a very important part in all of this because ultimately the private sector can ensure that this transition happens. Through Malta Enterprise, we are making sure we have schemes in place to help industry and enterprises to start moving in this direction and to follow the required transition, but also to ensure that any investment that we attract falls within our vision. We’re at a point in time where we are developing further the blue economy and the green economy and this links to the digital transition, to sustainability and to innovation.
Being an island, Malta is very strong when it comes to the blue economy and the shipping industry. We’re strong in the fishing industry and in aquaculture, and we’re strong when it comes to tourism, but we never managed to actually bring all these activities together under the heading of blue economy. We’re working to develop further the blue economy and place Malta as the blue Mediterranean hub. We’re in the middle of the Mediterranean and we’re a member of the European Union but very close to North Africa, and this puts us in a very strategic position to reach out to both sides of the Mediterranean but also to make sure that we tap into the potential that exists. When we’re speaking about the blue economy, we are not focusing only on the traditional sectors like shipping, tourism and the like, but we’re also trying to develop and tap into the innovative sectors. When it comes to renewables, we are now very much focusing on offshore renewable projects. We are studying and analyzing the possibility of developing large scale offshore renewable projects which, in our case, primarily means floating offshore, be it solar or wind turbines. The seas surrounding us are very deep, hence floating offshore is required. However, as the technology is not as advanced as other offshore renewables that are linked directly to the seabed, there are challenges that need to be taken into consideration. We are working on this because, ultimately, we want Malta to develop further in this area. We’re also looking into innovative blue technologies. We recently saw the launch of an international company called R3Vox, which specializes primarily on hydrographic studies, which is very innovative. It links directly to the blue economy and as an international company, they found that Malta is the ideal place to set up shop in. We’re also looking to attract companies that have innovative technologies, preferably zero emission technologies. Being highly dependent on our shipping sector, we are keeping an eye open for companies that are developing innovative technologies that can actually produce zero emission engines that can be used at sea. These things are all linked to one another: the blue economy is linked to the green economy and also to these innovative aspects, so we’re trying to bring these three together to try and further develop the blue economy sector which automatically will help ramp up the green economy. Our island is very small, but we don’t mind a challenge and we are working harder to create green jobs.
Malta Enterprise has already launched a number of schemes that help companies move toward being smarter and more sustainable. We just doubled up our incentives for companies to invest in more energy and water efficient technologies. We’re seeing several companies enhancing their sustainability efforts and their experience is helping other companies understand that, yes, it pays to invest in sustainability. Around two years ago we launched the ESG platform ahead of EU directives. We found that companies that invested in energy efficiency managed to reduce their CO2 emissions while at the same time managing to increase their profits. We have seen that companies that invested in sustainability managed to reduce waste, they managed to reduce water, and they have seen their profits increase while having a positive impact. It is like a chain reaction.
Malta has a small but dynamic domestic market where SMEs stand out as the backbone of the economy. What are some of the ministry’s main propositions to foster entrepreneurship and innovation in Malta, and what initiatives or programs are currently in place to support this growth in SME businesses?
We are open for business and for start-ups. We have very good programs and incentives to help start-ups establish themselves on the island. Malta Enterprise has a Start-in-Malta program which provides grants and tax credits to make sure that we help those start-ups that are innovative so that they can bring added-value to the country. Preference is given to those start-ups that are focused on the digital and on the environmental aspects. We have also launched the Start-up Residency Program which helps start-ups to establish themselves on the island and to retain their work force, which can be made of non-native Maltese employees. We have seen quite a number of interesting cases and interesting companies who started their business in Malta. One of our start-ups has also been listed on the NASDAQ stock exchange. These are the companies we are working hard to attract.
SMEs are the backbone of the Maltese economy. We do not have the big steel, automotive or cement industries, but we have companies that are primarily service based. Most of our entrepreneurs are small and medium sized enterprises. We make sure that we support our entrepreneurs, particularly in the most challenging of times. During the Covid pandemic, we provided a wage supplement scheme to make sure that employees were retained by the companies. These companies worked hard to train their employees and they provided them with the necessary skills, and we avoided unemployment. Then came the war in Ukraine. The challenges for Malta as an island are even more pronounced as we depend on freight for our imports and exports and therefore suffered from increased shipping prices. The government wanted to help out when it comes to energy prices, which is one of the biggest costs for companies. Our policy is to help foster growth and to keep away from austerity. It takes a lot of work, energy and time to attract foreign direct investment (FDI), and the moment a company leaves the country, you can never attract it back. We do invest a lot of energy to attract FDI. but we invest as much energy to retain those companies.
Malta is committed to achieving carbon neutrality by 2050. What are the main issues at stake and the challenges along the way in this transition? What steps is the government taking to accelerate progress? What new opportunities does that open?
In the energy sector, we made some advanced steps as we managed to move our energy production from fuel oil to liquid natural gas. But this is not enough. We want to make sure that the move toward cleaner energy sources comes primarily from renewables. Presently, our share of renewables is at 12.5 percent. It is more than the target we had for 2030, but it is still very low in my opinion. Given the size of our country, we have a limit on how much we can develop renewable energy on the island. That’s why we are looking now at offshore renewables. We are looking at developing the offshore renewable potential for the island, and we need to do that with foreign investors following all the procurement procedures that we will have in place.
The transport sector is the biggest challenge we have. Unlike other EU countries, Malta doesn’t have an underground system or a train system, and therefore people move from one place to another by car. Besides, as an island, we are very much dependent on the shipping and aviation sectors. At the moment, we are investing a lot in electric vehicles (EVs), and all other zero emission vehicles at large, by providing grants to individuals and companies to change their fleet from combustion engines to battery electric vehicles. Prices of EVs are still very expensive compared to the normal combustion engines, but price parity will be achieved in the years to come. We’re increasing our EV charging infrastructure. We want the private sector to be involved, so we introduced regulations that can regulate the private sector to provide the service as well. There are private entities that are interested in entering the market. It would help to have a mix of government and private charging points, as having the proper charging infrastructure would make all the difference. That would be addressing part of the issue when it comes to emissions. Obviously, we need to develop further modes of transport.
The building sector too needs to reduce its emissions. We are always open to new, innovative technologies in that regard. That is why, as a ministry, we are incentivizing different technologies that can help buildings reduce their emissions, like solar panels on roof tops, solar water heaters, heat pumps, and the like.
What sort of partnerships and collaborations have you put in place with other countries and organizations to advance Malta’s sustainability goals? Where could investors play a larger role in your opinion?
I see a big role for investors and foreign investors when it comes to floating offshore renewables as well as battery storage. We’re looking at opening up to foreign and local investors to go into the direction of investing more in renewable energy and battery storage. The moment we start ramping up on renewables, we need to make sure we can store that energy to use it when needed.
Obviously, we are collaborating with our neighbor Italy when it comes to interconnections. We already have an electricity interconnector with Italy and we’re developing the second interconnector with them. We are looking at expanding that because our strategic position puts us in a very good position to actually connect with other countries as well.
Malta has recently adopted a circular economy strategy and is prioritizing its transition to the green economy. Although Malta is highly dependent on both imported goods, this initiative still has the potential to modernize and boost economic growth. What are the key elements of the circular economy strategy, and how do you foresee it benefiting and impacting both the environment and the Maltese economy?
In the past year, we invested a lot of energy into our waste management, which unfortunately was left on the back burner for a number of years. We are developing our circular economy strategy on several different pillars. We have opened many re-use centers. People who have things which can be used can leave them at one of these re-use centers and not throw them into a landfill. We have seen a number of individual initiatives as well. For example, thrifting has become a very trendy thing to do. The moment that the government starts taking initiatives, we see interest cropping up from individuals as well.
We’re also looking at increasing our recycling targets. We are among the first countries that have a system in place where people can get a refund for used plastic bottles. We’re also trying to make sure that all waste is recuperated. We are investing in a waste-to-energy plant so that waste that cannot be recycled and re-used can be transformed into energy. We have other recovery facilities that have just opened or will be opening in the next few weeks. We started off with plastic and plastic bottles primarily because our marine environment is extremely important for us, and plastic is one of the main pollutants that ends up in our seas. Our primary focus is on plastic and plastic bottles, but our plan is to move on to other products as well.
Over the past year, Malta Enterprise has given the green light to 103 domestic and foreign direct investment initiatives, totaling $84 million in fresh investment injected into the Maltese economy. What is the government’s approach to attracting foreign investment to Malta and to creating a favorable environment for businesses?
We have been working on attracting companies in the pharmaceutical and biotechnology industry, in the green and blue economy, and also in the digital sector. As a small country, we try to facilitate things for our investors. Investors know that they can speak to us, they can speak to Malta Enterprise, they know that the government can hear them and discuss with them to see how to iron out any issues. Our partners and investor companies are extremely important, so we need to make sure that they have the right environment to work in and that they have the right skills that they can use. Having the right employees is one of the major issues that companies are facing. So we are working hard to make sure that we facilitate matters in this regard too. We are strong in the aviation sector, with some of the biggest names in the MROs sector. We work with them, and we see how we can solve their issues, involving the relevant ministers, so we can forge a way ahead and address any challenges that exist. We try to do that with different enterprises and different sectors. That is the biggest advantage that we have: companies know that the moment they are in Malta, they have peace of mind that there is a supportive government and the right entities that can help them.
Can you tell us about your immediate goals and outlook for 2023? What would you like to achieve specifically this year as a first step?
One of the biggest projects that we kicked off this year is a $786 million investment over seven years to create more green open spaces. I would like to see a greener Malta, particularly in the urban areas because you have localities that are quite dense where green spaces are not that predominant. These green spaces will provide a better quality of life for every resident on the island. We believe a lot in our people: they are the drivers of our economy because we do not have the raw materials that other countries have, so we rely a lot on our human resources. We want to make sure that the people who live and work on the island and who provide added value to the country also have enough green spaces where they can enjoy their free time with their family and have a better quality of life.
In parallel, I also want to ensure a cleaner environment in the sense that we continue investing when it comes to cleaner energy, cleaner transport, and we ensure that this transition happens as fast as possible. Providing a better quality of life, cleaner air, cleaner environment, and at the same time working hard to attract that investment to help us continue moving and forging ahead in that direction are my top priorities.
What’s your final message to the readers of Newsweek?
Malta is open for business, we are open for investors who are serious in investing in the smart economy, in the blue, green and digital economy. Malta is the right place to be: we are very strategically located, we speak English as one of our national languages, and being a small island, our bureaucracy is contained to a minimum, so we can help out investors to make sure their investment reaps benefits for them and for our communities.