22 May Interview with Dr. Miriam Dalli, Minister for Environment, Energy and Enterprise, Malta
BF: Malta is among the only four EU countries with projected growth rates of above 1% in 2023, mainly due to its focus on innovation and tech-based sectors. The work that the Ministry for Environment, Energy and Enterprise does is key, not only to continue driving economic growth but also ensuring it gets done sustainably while protecting the. Could you provide us with a general overview of the latest projects, investments and achievements within your portfolio and your priorities for 2023?
Dr. Miriam Dalli: You spoke about a very important aspect: economic growth. That is particularly important given the current challenges that the whole of Europe is facing following the pandemic and now the conflict in Ukraine. I’m also mentioning this from the point of view of the energy portfolio for which I’m responsible.
One of the first decisions we took as government was to ensure stability when it comes to energy prices. We did that consciously because of the particular status of Malta. We’re an island state member of the European Union but being an island state also has its challenges. Our first decision was to make sure that we were there to support our families, to support our enterprises, because, in Malta, these are made up primarily of small and medium-sized enterprises facing challenges that we haven’t seen, at least in recent history, particularly when it comes to the spike in energy prices.
We wanted to replicate what we did during the COVID-19 pandemic. During the pandemic, we made sure that we helped enterprises with a wage supplement, where we made sure to help out with the salary of employees. If we wouldn’t have done that, we would have had several companies that would have closed.
After the pandemic, when everyone was under the impression that the economies would now recover and get back to the speed of economic growth that we had earlier, all of a sudden, we had this conflict in Ukraine; that hit all of Europe hard, including Malta. It hit us very hard particularly because a portion of our energy was dependent on energy coming from mainland Europe, through an interconnector, and we have a big portion of energy that is sourced through LNG; we have contracts on that, but, in all reality, prices are exploding everywhere.
We took the decision to keep prices stable, and not to increase prices for both families and enterprises, more so because we are primarily dependent on SMEs. We took that decision also because we realized that, being an island member state, you have other costs that other countries will not have. These costs will impact directly and negatively our enterprises. I’m referring, for example, to the logistic expenses, because we’re primarily dependent on imports. Being an island member state, imports primarily come through shipping. Logistic expenses there, in certain cases, even went up fourfold. In addition, you have the prices of certain primary materials that have gone up, which impacts Malta as well. That stability literally underpins our economic policy, our economic philosophy, and that is also what is helping us achieve economic growth when compared to what we’re seeing in other countries around us.
Energy there plays a very important part, and this challenge helped us understand that there is an opportunity. I’m the type of person who must address a challenge when it is presented, but we can’t look only at the short term, we need to look at the longer term: if there’s a challenge, how we can turn that into an opportunity.
Being an island member state means that we are reliant on others when it comes to energy imports. Now is the time to make sure that we are more autonomous when it comes to energy production. It is also our opportunity to make bolder steps in the direction of having cleaner energy and decarbonizing our economy.
Our vision is to decarbonize the economy by 2050. We do understand that that comes with certain costs to it. But we are making sure that we’re supporting enterprises, the private sector, also individuals in making that transition, because we want to make sure that it is a transition that leaves no one behind, but it is a transition that pays the country as a whole. So we’re not looking at it only as the environmental thing that needs to be addressed, as there are also financial opportunities for people who invest in this direction. Malta is very limited when it comes to space on land. One of the projects that we’re currently working on is in making sure that we ramp up our percentage of renewable energy; we can’t just limit ourselves to looking at onshore technology; we need to look at offshore technology. We’re doing a lot when it comes to onshore, and now it’s the time to push for bigger projects offshore.
One of the projects that we’re working on is to make sure and bring to fruition the possibility of having investors investing in big offshore renewable projects near the island. It doesn’t come without its challenges. As an island, the bathymetry around our island is quite deep when compared to other countries. Whereas for other countries maybe you can have an offshore wind farm that is stable on the seabed, for us, it has to be floating offshore technology, because the sea is very deep around the islands. We’re looking at the floating offshore technology and how we can bring into fruition offshore renewable projects, which can provide energy to the island, and so, at the same time, help us reduce emissions and ensure a fairer price than what is currently market-based (the prices that are dependent on the market) and give us also a certain degree of autonomy. That is one of the biggest projects we’re looking at, and one of the biggest initiatives we’re looking at when it comes to the energy sector.
We have another big project that we’re working on. We have a €700 million investment over seven years for greening the island. One of the biggest issues that we have is that, again, we’re small, but we’re highly dense as well. Our population density is amongst the highest across the EU. We want to ensure that we protect our natural environment, but we want to also create green pockets and parks where today we do not have those. That is also another project that we’re working hard on, which would entail investment from the government, from the public administration; but we also want to open it to the private sector as well, and make sure that we provide our population, the communities living in Malta, with enough green spaces where they can go, relax and enjoy themselves. It’s one of the major asks of our people, to be honest with you. When it comes to the enterprise front, we’re working hard to make sure that we continue attracting niche sectors that are high quality and are truly adding value to the island. One of the sectors that we’re really focusing on, for example, is the pharma sector, where you have innovative ideas and technology. There are big pharma companies here, and we’re working hard to continue attracting other pharma names as well.
Green economy is another area that we’re focusing on. We’re helping through schemes through Malta Enterprise. For example, one of the areas that we help our companies move toward is in greening the business model and in greening their processes and their operations.
We have launched an ESG (Environment, Social, Governance) platform, where we are asking companies to plug in their data on the different criteria that make up ESG. We have the environment, the social and the governance. We’re doing this because the moment you start calculating and measuring, you can start implementing; you understand where companies are moving, where things are lacking, what needs to be addressed, etc.
Initially, we started with the listed companies on the stock exchange. Now we opened it up to all the other companies. We’ve had a 44% increase in companies that are putting up their data. At this point, it is voluntary. It is there at the EU level via the CSR directive, which will be providing a mandatory obligation for companies to do this ESG reporting, but we want companies to start doing it voluntarily, and we want to help them in the process.
The findings are quite interesting. We found that those companies that tick a number of boxes when it comes to ESG criteria have managed to reduce their C02 consumption by more than 7%, for example, and they have managed to reduce water consumption by more than 33%. The moment you start measuring these different data, then we start also analyzing and coming up with the schemes that can help people go in that direction. Through Malta Enterprise, for example, we have what we call the smart and sustainability scheme, where we help companies develop projects that can make their processes more efficient from the energy perspective, for example. It’s the twin transition: the digital and the environmental. We help them go in that direction because it makes it more efficient for them workwise, but it is also more sustainable from an environment perspective.
BF: What could be the potential to further tap renewable energy, including strategic projects, perhaps in new areas like offshore wind or tidal?
Dr. Miriam Dalli: What we are prioritizing at the moment is primarily solar and wind offshore technologies. But we’re not closed to other kinds of technology; technology is moving so fast. What until a few years ago might have been a pie in the sky, and people have told you that it will never happen, we’re today seeing that it is happening. Until a few years ago, floating offshore technology was said to be so expensive. But prices have increased, the technology has matured, and we believe that that is something that can work for our country. What we’re prioritizing at the moment are these offshore renewable technologies and projects, primarily looking at solar, but also wind. It depends on what is more financially feasible and what makes more sense from the technological aspect.
But there are a lot of other technologies that are going on and are being floated. Our primary principle is decarbonizing the sector. We will not consider technologies that are fossil fuel based. Currently, we’re primarily based on LNG, still a fossil fuel, but it is considered the cleanest of fossil fuels. I don’t want to regress from that position; I want my country to move forward.
You mentioned tidal: that’s another technology, another option. But there have been a number of studies going on from the Malta side on that, and when compared, for example, to solar and wind, the findings show that, for our island, solar and wind can give us more capacity when it comes to these kinds of projects.
In September, the government issued a pre-market consultation, asking investors to come up with ideas on projects that we can do offshore. There was a lot of interest from companies that work in the energy sector. We’re quite positive and hopeful that we will have good projects that can provide us with the capacity that would require and help us in this transition toward decarbonizing the energy sector.
BF: One of our aims is to position Malta as an attractive destination for FDI and highlight the opportunities for U.S. investors in net-zero projects, advanced manufacturing and digital transformation. What is being done to put Malta on the map for U.S. business leaders and investors, and what kind of opportunities are there to be found in Malta’s emerging industries?
Dr. Miriam Dalli: I believe that Malta is the ideal environment to actually kick off a business or establish foreign direct investment.
Let me start with kicking off a business. Through Malta Enterprise, we’re really offering good packages for startups. We believe that Malta is the ideal place for startups to start their business and continue growing. We’ve had a number of successes when it comes to startups. The primary area of startups that came to Malta is on the digital side, but there were also some from the technical side and the manufacturing side. The assistance that we provide does not match any other country; here the fact that we’re small is an advantage in itself.
Malta Enterprise handholds startups: it assists them along the way; if there are obstacles, Malta Enterprise tries to go into those obstacles to help out. Just to give you an idea, we had one of these startups listed on the NASDAQ: Trust Stamp. For us, that is a really good example of how a company can start here and continue growing.
The same thing applies to bigger companies. For us, apart from attracting startups, we’re also interested in attracting good FDI. Investors say that they find in Malta the place where they can discuss, where they can make sure that the issues that they’re facing are being addressed, where they are being supported, and where they are being helped throughout the whole process.
We’re interested in companies that can help the economy grow. But not only the economy; companies that can create quality jobs and add value to the island, particularly when it comes to digital and the environmental pillar.
Other positive things that I’m sure investors in the U.S. would be interested in is the fact that people here speak English, and there is no language barrier. And cultures are similar. People would find themselves in a democracy where they can make sure that they’re given a fair chance and that they can proceed with their business.
BF: I would like to ask you for your three top priorities and the long-term vision that you have for Malta sustainable industrial developments.
Dr. Miriam Dalli: 2020 was a challenging year. But it’s been an interesting two years since then. In these two years, we managed to make sure that we started rolling out our vision for the country as a whole.
If you ask me what the three main priorities are, I want to make sure that we continue working fast on this transition toward a cleaner economy. That is where endeavors such as the offshore renewable project and the urban greening project fit in, because we definitely need a country with less pollution and a higher quality of life for our people. We can achieve that by making sure that we have good companies that can provide a good career path, and we as government make sure that we can provide enough spaces for people to recreate themselves.
I want us to make sure that we work hard and start achieving what we have planned out on the sustainability strategy. We have launched the Sustainable Development Strategy by 2050. It goes through all the 17 SDGs. It is something that is cutting across the whole of government and the whole of country. It really and truly can put us on the path of achieving our vision and making sure that we give people the balance that, ultimately, we all want and require.
BF: If you could give the USA Today audience your final message, what would it be?
Dr. Miriam Dalli: Keep Malta on your map! Maybe a number of people would never realize the potential that a very small island might have. But this island is different. This island has the mentality of an independent, free country, where we have managed to build a lot of things that helped us be autonomous, that helped us be independent, and we want to make sure that we continue on that track.