Bank of Valletta plc (BOV) CEO Kenneth Farrugia has affirmed the importance of the bank’s relationship with the shipping industry when it comes to international trade and commerce.
His comments came during the Malta Maritime Forum’s (MMF) latest progress meeting, during which a number of issues, including the European Union’s Emissions Trading Scheme (ETS) on shipping, were discussed. This Directive is a key part of the EU’s strategy to address issues related to climate change, and is set to act as a key tool in reducing greenhouse gas emissions. It obliges ships to surrender their EU allowances (EUAs) to compensate for the emissions they generate, thus leading to higher costs.
“As a partner of the MMF since its inception, BOV’s relationship with the shipping industry has been vital for the operation of international trade and commerce, that is so important due to Malta’s insularity,” Mr Farrugia stated.
The bank has a long tradition of being involved in Malta’s maritime services, seeking to assist clients to succeed in their shipping-related businesses.
BOV is presently looking at ways to finance more sustainable and environmentally-friendly shipping practices. These include low-emission vessels, retrofitting projects, and supporting the development of new technologies.
“We are currently embarking on a multi-year programme of initiatives whose priority is to reduce greenhouse gases,” Mr Farrugia explained.
“As a leading financial institution, we continue to be actively involved in supporting the transition to a net-zero future,” he said, before adding that BOV looks forward to supporting its clients in the maritime sector with “innovative financing products to support the reduction of emissions”.
Earlier this month, MMF CEO Kevin J. Borg remarked that should the EU decide to proceed with the planned implementation of the ETS on shipping, the expected impact on businesses will be “irreversible”.
The Directive has been heavily opposed by a number of Mediterranean countries, including Malta, particularly since it would have an impact on the countries’ attractiveness in terms of shipping. Maritime industry insiders have publicly warned that the Directive is leading a number of shipping lines to make alternative arrangements, potentially bypassing countries like Malta to avoid costs related to the ETS. This could essentially remove Malta’s status as a transhipment hub, while also hindering local businesses’ competitiveness in the long run.
BOV CEO Kenneth Farrugia (left) and MMF Chairperson Godwin Xerri (right) during the progress meeting / BOV
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