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

Legal Battle Underway for €60 Million in Carbon Credits

Malta's state-owned energy utility, Enemalta, has confirmed it is pursuing legal action to recover €60 million worth of European Union Allowances (EUAs), commonly known as carbon credits, from a Swiss-based intermediary company. The utility announced the legal proceedings following the collapse of a carbon trading deal, which saw three out of eleven agreed transactions fail to materialize.

Enemalta chairman Ryan Fava addressed the issue in a press briefing held on Monday, November 10, 2025, stating that the company became aware of the problem on August 29, 2025. The missing EUAs, which are tradable permits allowing companies to emit a certain amount of carbon dioxide, were part of Enemalta's routine energy hedging operations.

Details of the Failed Transactions

The dispute centers on three unfulfilled trades out of a total of eleven transactions conducted with the unnamed Swiss firm. These transactions were carried out under a Master Agreement drafted by the International Emissions Trading Association (IETA), a framework recognized for international practice in carbon trading. Enemalta clarified that the €60 million represents the value of EUAs that the utility had effectively 'lent' to the trader.

Contrary to some initial media reports, Enemalta has stated that the Swiss company involved 'is not insolvent and is operating normally'. The utility has engaged a multi-jurisdictional legal team, including firms based in London and Switzerland, alongside local Maltese counsel, to safeguard its interests and recover the owed funds.

Context and Implications

The problematic transaction reportedly originated from a 2021 board decision, predating Ryan Fava's chairmanship. The incident has drawn scrutiny, with Energy Minister Miriam Dalli facing pressure to provide explanations, though she has not yet commented publicly on the matter. The development has also raised concerns for Shanghai Electric Power, Enemalta's Chinese minority shareholder, which has reportedly sought clarification regarding the financial exposure.

Enemalta emphasized its commitment to taking all necessary legal steps and reassured stakeholders that it is actively exploring all potential avenues for recovery. The company noted that due to the ongoing nature of the legal discussions, further specific details cannot be disclosed at this time to protect its legal and civil standing.