Enemalta Initiates Legal Action to Recover €60 Million in Failed Carbon Credit Deal

Enemalta Pursues €60 Million in EU Carbon Credits

Malta's state-owned energy utility, Enemalta, has confirmed it is pursuing international legal action to recover €60 million in European Union Allowances (EUAs) from a Swiss-based intermediary. The legal proceedings stem from the collapse of several carbon credit transactions, which Enemalta announced during a press briefing on Monday, November 10, 2025.

The utility's Executive Chairman, Ryan Fava, stated that the dispute involves 11 separate trades of EUAs, which are carbon credits under the EU's Emissions Trading System (ETS). While eight of these transactions were honored, three failed to meet their stipulated deadlines, leading to the current financial exposure.

Details of the Failed Transactions

According to Enemalta, the issue became apparent on August 29, 2025, when the payment for the outstanding EUAs was not received. The company clarified that the €60 million represents EUAs that Enemalta had effectively 'lent' to the trader as part of its energy hedging process. These allowances are crucial for Enemalta to surrender to the EU to offset its carbon emissions.

The transactions were conducted under a Master Agreement developed by the International Emissions Trading Association (IETA), a recognized international framework for carbon trading. Enemalta has denied media reports suggesting the Swiss firm involved has gone bankrupt, confirming that the intermediary 'is still operating and has not gone bankrupt.'

Multi-Jurisdictional Legal Strategy

To safeguard its interests and recover the owed funds, Enemalta has engaged a multi-jurisdictional legal team. This includes legal firms in Malta, London (UK), and Switzerland. Chairman Ryan Fava emphasized that these steps were taken after the Swiss company appointed its own lawyers in London and Switzerland.

The situation has also drawn attention to Energy Minister Miriam Dalli, who is reportedly facing pressure to explain the financial exposure. Furthermore, Shanghai Electric Power, Enemalta's Chinese minority shareholder, has sought clarification regarding the incident. Enemalta has stated that due to the ongoing nature of the commercial transaction and legal discussions, further details cannot be disclosed at this time to protect its legal and civil standing.

Broader Implications and Company Stance

The failed carbon credit deal highlights the complexities and risks associated with the EU Emissions Trading System for utilities like Enemalta, which rely on these allowances to manage their environmental obligations. Despite the current legal challenge, Enemalta has reassured stakeholders that it is actively considering all potential remedial avenues and remains committed to its investment program to strengthen Malta's electricity distribution network and maintain stable utility tariffs.