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

Malta's Enemalta Pursues €60 Million in Carbon Credit Lawsuit

Malta's state-owned energy utility, Enemalta, has commenced legal action to recover €60 million worth of EU Emissions Trading System (ETS) allowances, commonly known as carbon credits. The lawsuit targets a Swiss intermediary after a significant carbon trading deal failed to materialize. Enemalta confirmed its engagement of legal teams in Malta, the United Kingdom, and Switzerland to protect its financial interests in the ongoing dispute.

Details of the Failed Carbon Trading Deal

The issue stems from a series of European Union Allowances (EUAs) transactions, which are tradable permits allowing companies to emit a certain amount of carbon dioxide. Enemalta reported that out of eleven agreed trades with the Swiss company, three failed to be honored. The utility became aware of the problem on August 29, 2025, when the intermediary did not fulfill its obligations. These transactions were conducted under a Master Agreement drafted by the International Emissions Trading Association (IETA), a framework representing international practice in carbon trading. Enemalta clarified that the €60 million represents payment made for 'energy hedging,' and the company is seeking the return of specific EUAs it had effectively lent to the trader.

Legal Strategy and Official Statements

In response to the failed transactions, Enemalta has assembled a multi-jurisdictional legal team. A reputable London-based law firm is managing the situation, with a Swiss legal firm assisting due to the intermediary's location. Enemalta has refrained from disclosing the name of the Swiss company, citing the need to 'safeguard legal and civil standing' in what it describes as an 'ongoing commercial transaction.' Contrary to some media reports, Enemalta Chairman Ryan Fava stated that the Swiss company 'is not insolvent and is operating normally.' Mr. Fava, alongside Executive Director Stefan Calamatta, addressed the media in a press briefing where these details were confirmed.

Broader Context and Implications

The problematic transaction reportedly originated from a 2021 board decision, predating Mr. Fava's chairmanship. The incident has drawn attention to ministerial oversight, particularly concerning Energy Minister Miriam Dalli, who was notably absent from Enemalta's press briefing and has faced pressure to provide explanations. Furthermore, Shanghai Electric Power, a minority shareholder in Enemalta, has reportedly sought clarification regarding the financial exposure and accountability. Despite the legal challenge, Enemalta has reiterated its commitment to its substantial investment program aimed at strengthening Malta's energy infrastructure and maintaining stable utility tariffs.