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

Enemalta Pursues €60 Million in Carbon Credit Recovery

Malta's state-owned energy utility, Enemalta, has confirmed it is pursuing legal action to recover €60 million worth of European Union Emissions Trading System (ETS) allowances, also known as European Union Allowances (EUAs) or carbon credits. The legal proceedings are directed against a Swiss intermediary company after a series of carbon trading deals failed to materialize.

The utility became aware of the issue on August 29, 2025, when three out of eleven EUA transactions conducted with the unnamed Swiss firm did not meet their stipulated deadlines. Enemalta's Chairman, Ryan Fava, addressed the matter in a press briefing on Monday, November 10, 2025, clarifying that the company is seeking remedial action.

Details of the Failed Transactions

The transactions in question involve EUAs, which are tradable permits allowing companies to emit a certain amount of carbon dioxide under the EU's cap-and-trade system. Enemalta utilizes these allowances as part of its 'energy hedging' strategy, purchasing them to later surrender to the EU. The current legal action aims to secure the return of these specific EUAs that were effectively 'lent' to the trader.

Enemalta stated that these trades were conducted under a Master Agreement established by the International Emissions Trading Association (IETA), adhering to international standards. While such transactions are common and have historically proceeded without incident for Enemalta, the recent failures prompted the current legal recourse.

Legal Strategy and Company Stance

To safeguard its interests, Enemalta has engaged a multi-jurisdictional legal team, including experts in Malta, the United Kingdom, and Switzerland. A London-based law firm is managing the overall process, with a Swiss firm providing assistance due to the intermediary's location.

Despite earlier media reports suggesting the Swiss company's bankruptcy, Enemalta has denied these claims, with Chairman Ryan Fava stating that the company 'is not insolvent and is operating normally.' Due to the ongoing nature of the commercial transaction and legal discussions, Enemalta has indicated it cannot disclose further details to protect its legal and civil standing.

Context and Broader Implications

The problematic transactions reportedly originated from a 2021 board decision, predating Ryan Fava's chairmanship. The incident has also drawn attention to Energy Minister Miriam Dalli, who has faced pressure to provide explanations regarding the financial exposure.

Enemalta has reassured the public that it is actively considering all potential remedial avenues to recover the funds. The utility also emphasized its continued commitment to significant investment projects aimed at strengthening Malta's energy infrastructure, including reinforcing and developing distribution centers, and maintaining stable utility tariffs for consumers.