Eco-innovation in Malta

EIO Country Profile

2016-2017

Eco-Innovation Observatory

The Eco-Innovation Observatory functions as a platform for the structured collection and

analysis of an extensive range of eco-innovation and circular economy information, gathered from across the European Union and key economic regions around the globe, providing a much-needed integrated information source on eco-innovation for companies and innovation service providers, as well as providing a solid decision-making basis for policy development. The Observatory approaches eco-innovation as a persuasive phenomenon present in all economic sectors and therefore relevant for all types of innovation, defining eco-innovation as: “Eco-innovation is any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle”. To find out more, visit www.eco-innovation.eu and ec.europa.eu/environment/ecoap

Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Commission.

Eco-Innovation Observatory

Country Profile 2016-2017: Malta

Author: Margaux Le Gallou

Coordinator of the work package: Technopolis Group

A note to Readers

Any views or opinions expressed in this report are solely those of the authors and do not

necessarily reflect the position of the European Union.

A number of companies are presented as illustrative examples of eco-innovation in this report.

The EIO does not endorse these companies.

The report is based on an updated methodology for calculating the Eco-Innovation Index, which

has also been applied retroactively to all previous years, hence the outcome in the Eco-Innovation

Scoreboard (Eco-IS) for 2017 presented in this report can be compared with the analysis in the

previous reports to a limited extent.

Comments and suggestions on this document can be sent to Asel Doranova

asel.doranova@technopolis-group.com

This brief is available for download from https://ec.europa.eu/environment/ecoap/country_profiles_en

Table of contents

Summary ................................................................................................................... 1

Introduction ............................................................................................................... 2

1 | Eco-innovation performance .............................................................................. 3

2 | Selected circular economy and eco-innovation areas and new trends ................. 7

3 | Policy landscape: towards circular economy in Malta ....................................... 12

4 | Barriers and drivers to circular economy and eco-innovation in Malta .............. 10

ANNEX: Policy measures addressing circular economy and eco-innovations in Malta 18

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Summary

Malta ranks 15th in the 2017 Eco-Innovation Index, with an overall index of 86 relative to the EU-average of 100. This year, Malta exceeds the EU-28 average in two categories: resource efficiency outcomes and eco-innovation activities. However, it is still slightly below average for eco-innovation outputs, and lags significantly behind for eco-innovation inputs and socio-economic outcomes.

The country faces a number of challenges that eco-innovation can best address: lack of space and

local resources, energy dependency, water scarcity, waste management are the most urgent

ones. So far, the country has heavily invested in the energy sector, as well as in transportation and

water. However, although waste management is a national priority, uptake of circular processes

and resource efficiency measures has been low.

Malta benefits from a growing economy, especially in the tourism sector, and the progressive

recognition by the general public and businesses of the need to change. Nonetheless, the Islands’

small size, the lack of skills in eco-innovation, the low availability of funding for eco-innovators

impede Malta’s capacity to move faster.

As a consequence, public sector support plays an important role. After the publication of its Green Economy Strategy and Action Plan, the government continues to develop a number of initiatives, from education and research policy to business support, to stimulate the transition towards a circular economy.

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Introduction

Malta combines a number of challenges which could benefit from eco-innovation. The country will face increasing pressure from climate change, impacting water supply, sea levels, biodiversity and soil quality (EC 2017b). But it is already a territory where an efficient and innovative use of resources is much wanted.

Malta is the smallest state of the European Union, but it is also the most densely populated and urbanized. It counted more than 460 000 inhabitants in 2017, but with a density of more than 1,300 inhabitants / km2 when the EU28 average is below 120. Its insularity leads to a scarcity of natural resources, and especially fresh water and space. In 2015, annual renewable freshwater resources amounted to 223.09m3 per inhabitant, well below the threshold for absolute water scarcity, defined by the UN at 500m3 per inhabitant per year (Eurostat 2018). To satisfy water needs, the country relies heavily on desalination, a costly and energy consuming process which provides half of water supply (MSDEC 2017).

Lack of land space means that land use and urban planning decision play a pivotal role in Malta’s sustainable development policy, especially regarding energy production. Currently, Malta imports most of the energy it uses: it is dependent for fossil fuel but also for electricity, which is imported from Italy (the electricity interconnector, which provides a link with mainland Europe, became operational in 2015). The government is currently investing to reduce energy dependency, and in this regard, renewable energy is seen as a way to increase domestic production (EC 2017c). However, natural constraints limit the installation of energy infrastructures such as solar, wind or marine. As a result, Malta needs to significantly increase energy efficiency.

Lack of space and domestic energy sources make transportation a key problematic sector. Malta is second in Europe for number of passenger cars per inhabitant, with 634 cars per thousand inhabitants (Eurostat 2017). This leads to important congestion, air pollution, and inefficient use of space by vehicles. To solve these issues, the government is investing in electrical vehicles and carpooling initiatives to reduce traffic.

Waste management remains a burning issue in Malta, and effort to move towards more circular processes have proved difficult. It was one of the four countries to fail to reach the targets for municipal solid waste and packaging waste recycling (EEA 2016). In 2014 a new Waste management plan covering the period 2014-2020 was published, with resource management at its core (MSDEC 2014). No evaluation of implementation has yet been published, but current efforts have not proved enough. The country is expected to reach full landfill capacity by 2019, and as recycling schemes are not able to absorb the excess of waste, the government announced in 2017 the construction of a new waste incinerator for energy recovery, a setback to its engagement to moving up the waste hierarchy (Bonnici 2017).

Overall, the circular economy and eco-innovation could be instrumental in solving many issues on the Maltese Island. Resource efficiency would significantly reduce internal demand for energy and materials. But circular processes will be essential to reduce waste production and create reuse and recycling options, and provide new opportunities for SMEs. Eco-design for products is also important in a tourist-oriented economy, where single use products are mainstream and lead to environmental deterioration and excessive waste production. The development of the sharing economy will help reduce transportation or housing issues, for example by diminishing unused space occupied by stand-by vehicles.

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1 | Eco-innovation performance

The analysis in this section is based on the EU 28 Eco-innovation Index (EcoI Index) for the year 2017. The Eco-innovation index demonstrates the eco-innovation performance of a country compared with the EU average and with the EU top performers. EcoI Index is a composite index that is based on 16 indicators which are aggregated into five components: eco-innovation inputs, eco-innovation activities and eco-innovation outputs as well as environmental outcomes and socio-economic outcomes.

Figure 2.1 EU28 Eco-Innovation Index 2017, composite index

Source: EIO, 2018

Malta’s composite index is 86 relative to the EU-average of 100. The country’s ranking among the EU-28 has known fluctuation over the past years, although always below the EU-28 average. For 2017, Malta is ranking 15th, an improvement compared to its 23th rank in 2015. The highest scores in 2017 were obtained by Sweden and Finland (144 and 141, respectively).

This year, Malta exceeds the EU-28 average in two categories, with an index of 163 for resource efficiency outcomes, and of 116 for eco-innovation activities. However, it is still slightly below average for eco-innovation outputs (77), and lags significantly behind for eco-innovation inputs (23) and socio-economic outcomes (7).

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Compared to past indices, Malta confirms its good performance in resource efficiency outcomes, having lost only a few index points since 2015. It continued and significantly improved in eco-innovation activities, up from an index of 45 in 2015.

Compared to 2015 indices, Malta has improved in all categories apart from resource efficiency, where it lost a few index points. The biggest increases are in eco-innovation activities, up from an index of 45 in 2015, and in eco-innovation outputs (58 in 2015). Score in eco-innovation inputs can be considered stable, coming back to previous levels after a drop to 15 in 2015. The index for socio-economic outcomes, however, is for the second year at a very low level (it scored an index of 2 in 2015), while it went up to 36 in 2015 and even 79 in 2013.

Figure 2.2 Components of the Eco-innovation index for Malta, 2017

Source: EIO, 2018

Eco-innovation inputs

Malta keeps strong difficulties in this area, falling to the 27th rank with an index of 23, just before

Cyprus (index 4). The best performers in this area were Finland and Denmark.

In 2016, the government environmental and energy R&D appropriations and outlays amounted

to 0% of GDP. It was the only EU country is this case, whereas the EU average is 0.037% of GDP.

However, Malta was not the worst performer in R&D jobs, with total R&D personnel and

researchers representing 0.76% of total employment. Malta rank 22nd. No green early stage

investment were identified for the period 2014-2017, as it was already the case for the period

2013-2016.

Eco-innovation activities

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In spite of low results for innovations with environmental benefits, Malta achieved the best EU

performance in terms of environmental management, which enable the country to rank 9th in

overall eco-innovation activities.

Malta has seen a continuous improvement in eco-innovation activities in the past years. However,

data on environmental innovations in firms have changed compared to previous reports. These

data are based on the EUROSTAT’s Community Innovation Survey of 2014. They represent an

update from the 2008 data used in the previous report, but comparability is limited as the

questions have changed: they used to focus on the resource being saved (material or energy), and

now it focuses on who benefits from the innovation. As of 2014, Enterprises that introduced an

innovation with environmental benefits obtained within the enterprise represented 0.13% of total

firms; while Enterprises that introduced an innovation with environmental benefits obtained by

the end user represented only 0.09% of total firms.

The main improvement in Malta’s eco-innovation activities lays with environmental management:

in 2016, 645 companies were registered under ISO 14001, which equals to 543 organisations per

million of inhabitants. This is by far the highest score in the EU, showing a strong concentration

compared to other countries. It has also grown substantially since 2015, when only 41

organisations were ISO 14001 certified, well below the EU average. This can be seen as an

indication of rising environmental awareness from companies, as well as of improved

management capability.

Eco-innovation outputs

Malta ranks 19th in this category, with an index of 77. Compared to past indexes and ranks, it

seems to demonstrate an improvement in this category. Indices for 2016 and 2015 were,

respectively, 58 and 46. Malta also ranked 21st in the 2016 index. However, the sub-categories

indicate that this improvement is very relative.

Patenting evolution shows worrying trend, as no patent related to eco-innovation was recorded

in 2014, compared to an EU average of 15.34 per million inhabitants. In 2013, patenting was

already low with only 3.56 patents related to eco-innovation per million inhabitants (well below

the EU average at the time, of 17.44 patents).

Malta decreased its performance in publication: in 2016, there were 9.21 publications related to

eco-innovation per million inhabitants, compared to 16.30 in 2015. At the time, it was close to the

EU average of 18.16, which has since improved to 20.53.

Finally, in eco-innovation related media coverage (measured as the number of hits in all electronic

media covered by "Meltwater News" with key-word "Eco-innovation" translated in all EU-28

languages), Malta still scores above the EU average. There were 76 hits for 65 electronic media

sources in 2017, compared to 36 hits for 60 electronic media sources in 2016. However, the very

small number of media sources being screened means that these numbers should be interpreted

with some caution.

The best performers are still far ahead, with Luxemburg’s index being 220, and Finland’s 202. The

lowest index was attained by Hungary with 13.

Resource efficiency outcomes

Malta scores very well in resource efficiency outcomes, a success likely triggered by the country’s

natural specificities. It ranks 4th in this category, with an index of 167. In comparison, Luxemburg

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came first with 183, and Estonia last with 2. Malta secures the improvement of the past year: its

index was 163 in 2013, while it was “only” 116 in 2015.

Material productivity in 2015, measured as GDP generated per domestic material consumption,

remained stable since 2014, at 2.02 €/Kg. It is slightly below the EU average of 2.25 €/Kg. Water

productivity, last measured in 2011, is well above the EU average, and reflects a situation of water

scarcity: the country generates 236€ per each consumed cube meter of water. In comparison, the

EU average was of 78€/m3. Energy productivity is also high, at 14.61€/toe in 2015 (compared to

13.27€/toe in 2014), for an EU average of 9.66€/toe1. The country performs also well in GHG

emissions intensity. In 2015, it emitted 0.22 Kg CO2e/€, an improvement compared to 2014

figures (0.28 Kg CO2e/€) and to the EU average in 2015 (0.30 Kg CO2e/€).

Socio-economic outcomes

With an index of 7, socio-economic outcomes remain a weakness for Malta: it is still the second

lowest score before Cyprus, while Poland and Slovenia top the index, with indices of respectively

145 and 130.

Overall, the situation has improved in Malta, but not enough to catch up with the rest of Europe.

The share of exports of products from eco-industries has increased from 0.03% of total exports in

2015 to 0.04% in 2016. The share of employment in eco-industries amounted to 0.14% of total

employment across all companies in 2016, compared to 0.12% in 2015. The size of Malta’s eco-

industry reached 0.45% of total revenue in 2016, from 0.38% in 2015, a stronger improvement

compared to other categories. However, all scores remain below the EU average: 0.73% for

exports, 2.40% for employment, and 1.64% for turnover.

1 The value (14.61) is above the 5% quantile used as a higher threshold (14,12) and consequently replaced with the latter in the calculation of the EU average.

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2 | Selected circular economy and eco-innovation areas and new trends

Malta’s green economy remains one of the smallest in the EU. In 2015, the Ministry for

Sustainable Development, the Environment and Climate Change reported about 2,100 green jobs

recorded on the Maltese islands, and expected that the sector would grow by 19% over the next

three years. However, in 2017 it was estimated that, following a trend affecting most of EU

member states, green jobs had receded in Malta compared to 2015 (EC 2017a).

Since the adoption in 2015 of Malta’s Green Economy Strategy and Action Plan, some progress

has been made regarding energy efficiency, the production of renewable energy and the

containment of greenhouse gas (GHG) emissions, but it remains limited and will not enable the

country to reach its targets regarding GHG emissions, R&D expenditures, renewable energy

provision and energy efficiency (EC 2017c). Parallel efforts to solve waste and water issues still

need to deliver.

The energy sector remains the most developed for eco-innovation activities. It is one of the EU

countries were SMEs are the most likely to implement energy efficiency actions, and to plan

additional actions to use predominantly renewable energy. The sector seems to have received a

strong boost since 2015 (EC 2017a), fed by many government’s initiatives, such as old vehicle

scrappages schemes, upgrading of street-lighting and subsidized deployment of solar-PV

installations. The effects can be seen at the country level, and Malta is one of the leading countries

in the EU for reduction of primary energy consumption: it has decreased by 22.5% between 2006

and 2016, mostly as a result of strong investments from the public sector in power generation and

distribution efficiency2.

However, waste reduction and materials saving by SMEs has steeply decreased since 2015. This is

a European trend, but Malta is one of the most affected countries. Maltese SMEs are also very

unlikely to participate in industrial symbiosis, or to design or plan to design products that are

easier to maintain, repair or reuse. Water saving by SMEs has also declined in the past two years,

and few companies declared planning new actions in this domain. Compared to other member

states, Malta is once again among the worst performers (EC 2017a).

In the past years, Malta has known a strong economic growth, which was forecasted to stabilise

around 4% in 2016. The country benefits from a high employment rate, driven by the service

sector. A strong tourism industry means that Malta becomes more export-oriented and less

capital-intensive. Full implementation of transportation and energy reforms should further

decrease the islands dependency on imported fossil fuels, and growing energy efficiency is

expected to leave more money for investment (EC 2017c).

But for the time being, the economic boost does not seem to be particularly benefiting the eco-

innovation sector. When asked about their need for business development support, only a small

minority of Maltese SMEs primarily demanded support for the development and marketing of

green products or services, or for the adoption of more resource efficient technologies and

2 http://www.energywateragency.gov.mt/blog-vlog/3358/

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processes. Very few saw the development of cross-sectoral reuse of materials and by-products,

or of clearer rules on the use of secondary raw materials, as being most helpful for the

development of their business. The lack of demand for developing core circular processes,

product and services, and the limited intention to develop them in the next couple of years

demonstrate that this is not yet a priority for Maltese SMEs (EC 2017a).

Although the government had planned to align the Maltese economy with circular principles, this

remains an underdeveloped sector. It recently attracted some publicity, with the European

Parliament holding an event on circular economy in Malta in 20173, and with the involvement of

the University of Malta in the R2Pi Horizon 2020 project4.

Gourmet Vinegar from Maltese Tomatoes: An Innovative niche product

Maltese farmers produce an annual average of 13,000 tones of tomatoes, mostly under

processed forms for exports to other EU countries. The need to respect high quality standards

for export and transformation processes led to increasing amount of tomatoes to be discarded

as food waste.

This project brought together farmers and local processing companies to find a use for

discarded tomatoes that would provide additional revenues and increase resource efficiency,

therefore securing jobs in the agro sector.

Partners conducted market and feasibility studies, field trials to identify the right tomato

varieties, laboratory testing, equipment purchase and packaging development.

The result of the project was the development of a tomato vinegar that can be sold as a niche

gourmet quality product both locally and for export. It also enabled cooperation along the

supply chain to develop by-product reuse. The way farmers and processors increased their

mutual trust and learnt to cooperate can serve as an example for other businesses willing to

develop circular models.

The project took place in 2015 and received funds from the

European Agricultural Fund for Rural Development.

Further information:

http://ec.europa.eu/budget/euprojects/added-value-create-

niche-product-malta_en

Contact: Mr. Manuel Bartolo, manbon@onvol.net, Ghaqda

Ghawdxija tal-Produtturi tat-Tadam, Malta

Keywords: Supply chain, niche product, circular economy,

research, innovation, product development

3 https://www.maltachamber.org.mt/en/from-waste-to-value-the-transition-to-a-circular-economy

4 https://www.um.edu.mt/think/the-circular-economy-and-malta/

Author: Manuel Bartolo

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Bumalift: carpooling network

Launched in 2015, Bumalift offers a car-pooling application for drivers who want to share their

car for daily commute. The app matches drivers and passengers, alongside three micro-

communities: students who go to the university, parents who drop children at schools, and staff

going to their workplace. The app is based on a reward system that encourages people to use

the service as often as possible. The overarching goal of the app is to reduce car jamming in

Malta and CO2 emissions linked to road traffic.

The company has been working with public services to

offer services at the lowest cost. Transport Malta funds

the school lift service, providing free access to parents.

In parallel, the Students’ Council of the University of

Malta partnered with Bumalift, and set up a dedicated

carpooling car park. Students can also access the

university lift service for free.

Further information: https://www.bumalift.com/

Keywords: Carpooling, resource efficient driving,

transport, congestion

Author: James Moffett

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3 | Barriers and drivers to circular economy and eco-innovation in Malta

As explained in introduction, Malta faces a number of natural barriers that strongly influence the direction it is taking towards eco-innovation and the circular economy. Energy dependency, few natural resources (and especially lack of water), lack of space limiting economies of scales and complicating land use, create a need for eco-innovation. But at the same time, the lack of resources makes the transition harder.

Access to finance represent a strong barrier to eco-innovation in businesses. Maltese SMEs have invested in resource efficiency, but for at least a quarter of them, it led to higher production costs in the short term, creating a need for external funds (EC 2017a). However, Maltese SMEs are having trouble accessing to finance, as banks reduced lending to businesses (EC 2017c). In 2007, SMEs invested less than before, and were among the most likely in Europe to rely on their own financial resources to implement resource efficiency measures. Demand for funding opportunities and financial advice has grown in the past years (EC 2017a). To compensate the lack of private source of funds, public authorities have supported the Maltese economy for many years, through European and national funds. For example, two third of all R&D expenses came from public funds in 2016 (Times of Malta, 2017). A diversification of financing instruments, including access to venture capital, is now a new focus of the Malta Development Bank, to support innovation in services and new business models, that will be necessary to shift to a circular economy (EC 2017c).

The regulatory environment also hampers access to second chance financing for entrepreneurs that have faced bankruptcy, as these situations are little addressed in the current system. However, the government has launched a judicial reform to tackle current inefficiencies, which could improve procedures for businesses in economic difficulties, in addition to financial support initiatives (EC 2017c).

Innovation is hindered by the size of the research and innovation system, but even more so by a mismatch between skills needed and current labour force. The low-skilled workforce is still partly excluded from the labour market, while companies rely on immigration to offset emerging skill gaps and shortage of applicants for the high number of job opening. Digital skills and soft skills (communication, problem-solving, etc.) are especially lacking, hampering the capacity for many workers to take part in innovative professional activities (EC 2017c). The Eurobarometer survey conducted with Maltese SMEs reveals that few of them identified a need for specific environmental expertise, but they were also the least likely in Europe to mention the need for demonstration of new technologies and processes to improve resource efficiency, pointing to a lack of interest for eco-innovation (EC 2017a). In response, the government has been strongly investing in education over the past five years. In higher education, growth in teaching staff represented most of expenses increase. The government has also invested in basic skills programmes and life-long learning to address early school leave that has led to low qualification of adults. These investments remain nonetheless limited. Although R&D investments have grown over the past decade, it did not compare with overall economic growth, and expenses have started decreasing in 2016 (Times of Malta, 2017).

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The development of circular processes and uptake of eco-innovations also depend on the capacity of businesses to cooperate and build capability. There is still a lack of interest on the part of SMEs in this domain, and especially regarding cooperation to develop processes for the reuse of waste and by-products (EC 2017a). However, as the government develops new cluster initiatives, this may change in the future. For example, Malta Marittima, a governmental agency created in 2016 to bring together stakeholders to strengthen the marine and maritime industry, has set up three networking priorities, two of them being research and education, and environmental and spatial planning. The agency also provides financial support for researchers and entrepreneurs through dedicated funds and awards (Times of Malta 2016). Businesses may also find solutions in international cooperation: in 2016, the Eco-French Malta platform was launched, to promote partnerships between French and Maltese businesses to achieve sustainable development projects and train green entrepreneurs in Malta5. Finally, the main waste management facility, Wasteserv Malta Ltd, organises every year a Malta Waste Reduction Awards to promote business best practices.

In addition to public incentives, changes in the population’s attitude towards the environment and waste in particular may provide a push for the circular economy in coming years. There is already a strong support for the protection of the Islands heritage, including their natural riches, out of consideration for future generations, but also because of the economic weigh of the tourism sector (EC 2017b). Habits are starting to change too: latest figures for collection of recyclable wastes show a continuous increase in collected amounts over 2015-2017 (Vella, 2018).

5 https://www.linkedin.com/company/eco-french-malta/

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4 | Policy landscape in Malta

The Maltese government has been very active in recent years to tackle environmental issues and support the development of the green economy. The period 2016-2017 has seen a continuation of this trend, with new announcements and the implementation of ongoing policies.

Prior to 2016, a number of initiatives had been launched, including the National Electromobility Action Plan in 2013; the Waste Management plan 2014-2020, the National Research and Innovation Strategy 2020 and the funding programme for R&D FUSION in 2014; and in 2015, the Green Economy Strategy and Action Plan and the Second Water Catchment Management Plan.

In 2017, Malta held the presidency of the Council of the EU, and chose the negotiations for the Circular Economy legislative Package as one of its priorities. Although it managed to secure a Council position on these new waste legislations, its situation as one of the worst waste managers in the EU made negotiations on recycling targets complicated (Politico, 2017). The Council amended text included an option to postpone the deadline for achieving new targets for several member states that had been lagging behind, including Malta. Although better waste management is a national priority, this is another illustration of the country’s difficulties to tackle this issue. The installation of an incinerator for waste to energy announced the same year might help the country respect the 2050 targets, but reduces prospects for large scale circular processes.

In the energy sector, several measures to improve energy efficiency and the intake of renewable energy source were implemented, including door-to-door energy audits and photovoltaic panel schemes.

In 2015, the government presented its Green Economy Strategy and Action Plan, which proposed a number of initiatives to support green growth and the circular economy. Some of them were planned for 2016-2017. One of them was the development of the National Education for Sustainable Development Strategy, which was published for public consultation in Spring 2016, but not yet finalised. This strategy aims at mainstreaming sustainable development and green skills in educational programmes by 2017, completed by the creation of dedicated programmes by 2018 (NSESD Board of Governors, 2016).

Sustainable product policy in Malta has found a fertile ground in the tourism sector. Since 2002, the Malta Tourism Authority operates the ECO certification for hotels and farmhouses, which aims at improving tourism accommodations’ sustainable performance, especially regarding on energy efficiency, reducing water consumption, waste management and green procurement. It also aims at raising awareness among employees and guests. The latest figures show that 16% of hotel accommodation in Malta are now covered by the scheme, with successful results in terms of resource efficiency and awareness, while providing a competitive advantage for its participants (MTA 2010). Further policy will focus on getting smaller accommodations on board, as larger establishments have so far made the most of it (MSDEC 2017). Another initiative in the tourism sector, the Environmental contribution, was launched in 2016. Paid by tourists for each night spent in a Maltese accommodation, it aims at generating revenue to upgrade and embellish the

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local infrastructure in touristic areas6. Regarding EMAS, Malta hosted the 2017 EMAS award ceremony, alongside with the high-level conference on sustainable tourism7.

In December 2016, the recently established Authority for Transport in Malta published its first National Transport Strategy (with time horizon of 2050) and the National Transport Master plan 2025. One of the intentions of the strategy is to encourage the use of sustainable modes of transportation and work towards reduced car ownership levels (Transport Malta 2016). With high road traffic and private car ownership, the government has already supported initiatives to reduce congestion and inefficient use of private transportation, such as car-sharing platforms.

Green public procurement was first introduced through a national action plan in 2011, which is set to be renewed in 2018. The Directorate for the Environment and Climate Change, MSDEC, started experts’ analysis and consultations in 2016. The 2nd National action plan is set to be more stringent, with renewed targets, more mandatory status and the inclusion of additional sectors, with the aim to adopt a more comprehensive approach to public procurement procedures. Nine new initiatives have been defined: greening other procurement instruments, greening award criteria, pooling of advisory experts, training and constant refresher courses, incentivising local councils through award schemes, greening EU funding, introducing Green finance, post procurement auditing and enhancing the role of the GPP coordinator. Circular public procurement is not mentioned, but the 2nd National Action Plan is meant to contribute “towards moving in a greener and more circular economy” (Ministry for Finance 2017).

Following Malta’s ratification of the Paris agreement in 2016, the government announced its Low Carbon Development 2050 Strategy in 2017. A more detailed document with implementation action plan and targets is set to be published n 2018. The strategy builds on recent initiatives, notably efforts towards renewable energy and energy efficiency. It also integrates other planning requirements such as the National Renewable Energy Action Plan, which was launched for public consultation in 2016. The strategy outlines how specific sectors such as waste policy will drive the society toward circular economy, with a strong emphasis on enterprise policy and industrial symbiosis. The government will support circular processes through fiscal policy, green public procurement, extended producer responsibility schemes, inter alia (MSDEC 2017).

For water policy, the government will build on the New Water initiative, which aims to secure water resource from treated sewage effluent, to reduce non-potable uses of groundwater, notably in industry and agriculture. Facilities for the recycling of used water have been built between 2007-2013, and polished water is now available for users, although the distribution network is still under construction (WSC 2018).

Further water efficiency measures will be delivered through building policy. Rainwater catchment, greywater reuse and water efficiency appliances will be supported through public schemes to diminish their costs and enable uptake by the tourism and commercial sectors (MSDEC 2017). Such investments are particularly important as Malta has now a building boom in recent years, which was not particularly accompanied by the development of green infrastructures (Vella 2017). However, some initiatives took place: an international Sustainable Built Environment conference was organised in 2016 to highlight current opportunities, Ecological corridors were set up using historical stone walls to better associate landscape and urban planning, and the use of 2014-2020 ESI Funds supports the development of clean urban infrastructures (EC 2017b).

6 http://www.mta.com.mt/environmentalcontribution

7 https://europa.eu/newsroom/events/high-level-conference-sustainable-tourism-and-emas-awards-2017_en

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New water

The New Water (or Second-Class Water) initiative has been launched to reduce reliance on

aquifer water for agriculture and other uses. Water is recovered from sewage affluent and then

treated in a three-phase process (ultra-filtration, reverse osmosis, and advanced oxidification).

Three polishing plants were built by the Water Service Corporation (WSC) during the 2007-2013

programming period. These plants can reach a total production volume of 7,000,000m3 per

year, which is distributed through hydrants. Seven were installed by January 2018 in the North

region of Malta. Three more networks are currently under development in North, South and

Gozo, and are partly financed through EAFRD funds.

Users can access the hydrants by electronic cards. To support the uptake of re-cycled water,

especially by farmers, the initiative is subsidised, and user can receive re-cycled water for free

for up to 2,500,000 litres per half-hectare. As of April 2018, 170 farmers in Mellieħa area were

using the New Water for cultivation.

Compared to aquifer water, the recycled water has low salinity level, as it does not suffer from

seawater infiltration which growingly affects the Islands natural reserves. The direct benefit for

farmers is higher crops production. As recycled water is monitored, the authority can get better

information on water use. In the meantime, lesser exploitation of the aquifer enables it to

replenish, especially after low rainfall years as in 2017.

Further information: http://www.wsc.com.mt/information/new-water/

Contact: customercare@wsc.com.mt

Keywords: water, water reuse, agriculture, greywater

Don’t Waste Waste Campaign

In April 2016, the Ministry for the Environment, Sustainable Development and Climate Change

launched the “Don’t Waste Waste” campaign, in collaboration with Wasteserv (the main waste

management company in Malta) and supported by the Environment and Resources Authority.

The campaign was launched in the context of the Waste management plan 2014-2020, which

goal is to reach the 2020 targets for waste reduction and recycling. The campaign aims at

informing the population about the waste hierarchy, raise awareness of the importance of

waste management, and promote a cultural shift towards the circular economy where waste is

considered a resource.

Actions include:

- A website centralizing all necessary information on waste sorting

- Ongoing media campaign to inform the general public

- Showcase of good practices and green initiatives by businesses and retailers

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- Educational activities and seminars, in shops, with companies, in social areas, etc.

Further information:

http://dontwastewaste.gov.mt/

Contact: info.dontwastewaste@gov.mt

Keywords: waste, awareness raising, campaign, zero waste, waste hierarchy, recycling

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References Bonnici, J. September 2017, ‘Government to implement €150m waste to energy project; opposition declines to take part’, The Malta Independent, Available at http://www.independent.com.mt/articles/2017-09-15/local-news/Government-to-implement-150m-waste-to-energy-project-opposition-declines-to-take-part-6736179054

European Commission, 2017a, SMEs, resource efficiency and green markets, Flash Eurobarometer 456, European Union.

European Commission, 2017b, The EU Environmental Implementation Review Country Report – MALTA, Accompanying the document The EU Environmental Implementation Review: Common Challenges and how to combine efforts to deliver better results, SWD(2017) 51 final, European Union.

European Commission, 2017c, Country Report Malta 2017, Accompanying the document 2017 European Semester: Assessment of progress on structural reforms, prevention and correction of macroeconomic imbalances, and results of in-depth reviews under Regulation (EU) No 1176/2011, SWD(2017) 83 final, European Union.

European Environmental Agency, 2016, Waste Recycling. Available at https://www.eea.europa.eu/data-and-maps/indicators/waste-recycling-1/assessment

Eurostat, 2017, Energy, transport and environment indicators, European Union

Eurostat, Accessed on March 2018, Datasets: Population on 1st January; Population density; Renewable freshwater resources. European Union.

Malta Tourism Authority, 2010, Hoteliers’ Views on ECO certification. Available at http://www.mta.com.mt/loadfile.ashx?id=37a9d6d6-a136-4512-99ac-a9753f0ebe66

Ministry for Finance, 2017, Malta National Reform Programme, Valetta.

Ministry for Sustainable Development, the Environment and Climate Change, 2014, Waste Management Plan for the Maltese Islands: A Resource Management Approach.

Ministry for Sustainable Development, the Environment and Climate Change, 2017, Malta’s Low Carbon Development Strategy: Our Vision.

National Strategy for Education for Sustainable Development Board of Governors, 2016, Nurturing a Sustainable Society: A National Strategy for Education for Sustainable Development for Malta, Public consultation document.

Politico, June 2017, ‘Malta’s EU presidency: How it went’, Politico, Available at https://www.politico.eu/article/maltas-eu-presidency-how-did-it-go/

Times of Malta, April 2016, ‘New Malta Marittima agency to bring government and private industry stakeholders together’, Times of Malta, Available at http://www.independent.com.mt/articles/2016-04-13/local-news/New-Malta-Marittima-agency-to-bring-government-and-private-industry-stakeholders-together-6736156296

Times of Malta, December 2017, ‘Malta's R&D spending is falling in relative terms’, Times of Malta, Available at https://www.timesofmalta.com/articles/view/20171201/local/maltas-rd-spending-is-falling-in-relative-terms.664560

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Transport Malta, 2016, National Transport Strategy 2050.

Vella, M., October 2017, ‘Take cover! Malta’s sustainability guardian is championing ‘marvelous building boom’, Malta Today, Available at https://www.maltatoday.com.mt/environment/environment/81127/take_cover_maltas_sustainability_guardian_is_championing_marvellous_building_boom#.WsyB98i-nOQ

Vella, M., February 2018, ‘Co-op says more than 16% increase in recycling indicates change in Maltese habits’, Malta Today, Available at https://www.maltatoday.com.mt/environment/environment/84394/coop_says_more_16_increase_in_recycling_indicates_change_in_maltese_habits#.WssR-si-nOQ

Water Service Corporation, April 2018, ‘Revolutionary ‘New Water’ to become more accessible’, Available at http://www.wsc.com.mt/revolutionary-new-water-to-become-more-accessible/

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ANNEX: Policy measures addressing circular economy and eco-innovations in Malta

Group of policy

measures Type of policy measure

Specific measure Please provide reference to or brief summary of specific measures

(national, regional) add cells if necessary

Focus of policy measure (tick if relevant)

Circular economy

Generic focus on

eco-innovation

Resource efficiency

improvement

Energy efficiency improve

ment

Reduction of emissions incl. CO2

Other relevant

areas (e.g. renewable

energy, etc)

SUP

PLY

SID

E FO

CU

S

Equity/business support

Publicly co-funded venture capita funds

Public guarantee funds

Loan Guarantees facilitate access to finance to assist enterprises in the acquisition of capital assets that will lead to a more effective and efficient production and supply of services. http://www.maltaenterprise.com/en/support/loan-guarantees

x

Support for R&D in public sector

and industry

R&D funding

The FUSION Programme managed by Malta’s Council for Science and Technology provides two types of support: Commercialisation Vouchers assisting inventors and researchers to assess the commercial and market potential of their ideas; and a Technology Development Programme which funds the actual development of research and innovation proposals with the possibility of developing a prototype.

x

Collaborative grants

Research and Development 2014 – 2020: This measure supports industrial research or experimental development carried out for the acquisition of knowledge leading to the development of innovative products and solutions. Eureka and Eurostars projects are supported through this measure.

https://www.maltaenterprise.com/support/research-and-development-2014-2020

Maritime Seed Award (MarSA): Organised by Malta Marittima Agency and University of Malta. A total of €100,000 will be allocated through a competitive call to innovators and entrepreneurs interested in bringing their ideas closer to commercialization

X

x

19

- MarSA ‘Proof-of-concept’ fund for researchers - MarSA ‘Seed’ fund for entrepreneurs

TAKEOFF Seed Fund Awards: Organised by the University of Malta TAKEOFF Business Incubator. €100,000 awarded to researchers and entrepreneurs to take innovation closer to market

x

R&D infrastructure

Centre for Environmental Education and Research of the University of Malta https://www.um.edu.mt/ceer

x

Start-up funding

Start-Up Finance 2017 – 2020: The aim of this measure is to finance innovative undertakings in their early stages of development by supporting Small Start-up Undertakings that demonstrate a viable business concept in the setting-up and initial growth phases. Malta Enterprise provides support linked to private equity, crowd funding and the procurement of machinery and equipment. Depending on the type of support provided, assistance may be up to Euro 100,000 if linked to crowd funding campaigns and up to Euro 200,000 when the support is linked to private equity or required to fund the procurement of machinery and equipment. This support is provided in the form of repayable assistance.

https://www.maltaenterprise.com/support/start-finance-2017-2020

x

Fiscal measures

Tax incentives for R&D and start-ups

Aid for R&D projects allows companies to claim tax credits on costs incurred directly or indirectly in carrying out an R&D project or projects relevant to the company's trade. Eligible projects should seek to achieve an advance in a field of science or technology through the resolution of scientific or technological uncertainty.

https://www.maltaenterprise.com/support/aid-research-and-development-projects-tax-credits

x

Tax incentives for R&D personnel

Innovation Aid for SMEs allows qualified SMEs to recover in the form of tax credits, part of the costs incurred for the loan of highly qualified

x

20

personnel from large undertakings and Research and Knowledge-dissemination Organisation. Active until 31st December 2020.

https://www.maltaenterprise.com/support/innovation-aid-smes

Qualifying Employment in Innovation and Creativity (Personal Tax): The development and expansion of knowledge based industries requires the availability of human resources. Such resources may be developed through education and training, however such resources would need to be substantiated through knowledge and experience. This measure facilitates employment of non residents in roles which are currently not addressed by the local labour market by temporarily easing the tax expenses incurred by such persons through a fiscal incentive.

https://www.maltaenterprise.com/support/qualifying-employment-innovation-and-creativity-personal-tax

Tax Credits for R&D and Innovation: This measure is open to all undertakings that employ for a period of at least twelve months a person holding or reading for a doctoral degree in science, information technology or engineering.

https://www.maltaenterprise.com/support/tax-credits-rd-and-innovation

x x

Tax incentives for skills acquisition

The Knowledge Transfer Incentive provides a framework for addressing skill shortages by supporting training and re-skilling of existing and new employees, in the form of tax credits. The aim is to support knowledge transfer, and the acquisition of new competences in line with the knowledge and skill requirements of industry. This incentive will support undertakings to upgrade their skill capabilities, in order to address any mismatches between the skills available, and knowledge requirements.

https://www.maltaenterprise.com/support/knowledge-transfer

x

Tax incentives for business

development

Investment Aid Tax Credits 2014 – 2020 are intended to sustain the regional industrial and economic development of Malta. This measure facilitates initial investments by encouraging the setting up of new establishments and the expansion and development of existing businesses.

https://www.maltaenterprise.com/support/investment-aid-tax-credits-2014-2020

x

Education, training and

mobility

Tailored training courses for companies, entrepreneurs

21

Advise/consulting for start ups, companies, entrepreneurs

Malta Chamber Business to Business directory offers list of experts in selected domains, including environmental monitoring, renewable energy and waste management

X x

Placement schemes for students

Support for R&D workers recruitments

Networks and partnerships

Competence centres, clusters, science-technology

parks

Malta Marittima Agency http://www.maltamarittima.org.mt/ University of Malta TAKEOFF Business Incubator

x

Technology platforms and innovation networks

Eco-French Malta platform x

Foresight and common vision building

Market intelligence and other forms of information

sharing

DEM

AN

D S

IDE

FOC

US

Regulations and standards

Regulations, targets, cap & trade schemes

Performance standards, labeling, certification

ECO certification for hotels and farmhouse X x

Public procurement

“Green“ public procurement of goods and services

National Action Plan for Green Public Procurement x x

R&D procurement

Pre-commercial procurement

Technology Transfer

Advisory support for technology adopters

Financial or fiscal support for technology adopters

Investment Aid for High-Efficiency Cogeneration: In collaboration with the Energy and Water Agency, Malta Enterprise is assisting undertakings to

x

22

(e.g. grants for purchasing new technology)

invest in cogeneration equipment (ie energy efficient solutions that simultaneously generate thermal energy and electrical and/or mechanical energy). The assistance shall be provided in the form of a tax credit.

https://www.maltaenterprise.com/support/investment-aid-high-efficiency-cogeneration

Support of private demand

Tax incentives for consumers (e.g. for purchasing

environmentally efficient products)

Environmental contribution for tourists x

Tax reductions for products and services (e.g. VAT

reductions)

Demand subsidies (e.g. eco-vouchers, consumer

subsidies)

New Water initiative x x

Awareness raising and information provision

Don’t waste waste campaign Malta Waste reduction award

X x

About the

Eco-Innovation

Observatory (EIO)

The Eco-Innovation Observatory (EIO) is the initiative financed by the European Commission’s Directorate-

General for the Environment. The Observatory is developing an integrated information source and a series

of analyses on eco-innovation trends and markets, targeting business, innovation service providers, policy

makers as well as researchers and analysts.

Visit EIO and DG ENV EcoAP website and register to get access to more information

and to access all EIO resources.

www.eco-innovation.eu

ec.europa.eu/environment/ecoap