Malta loses out on EU cash for gas pipeline

Malta will not be getting any EU cash to finance its gas pipeline to Sicily, after the European Commission ignored the island’s final bid in the last round of Connecting Europe Facility funds. 

In 2019, Malta’s attempt to get finance for the €400 million pipeline was punished by the EC’s de-prioritisation of gas projects to move fast on climate change targets. 

Malta wants to procure natural gas from the European mainland directly because its supply of gas to the Delimara power station is procured by a floating liquefied natural gas (LNG) vessel. 

Now that it has lost out on the last disbursement of the €23 billion CEF founds, Malta will have to change tack on its energy plans because the next PCI list in 2021 – the fifth – will be more stringent on gas projects. 

This means it will have to go for a hydrogen-ready system, so the proposed pipeline will have to be able to transport hydrogen. 

Additionally, Malta’s bid was overshadowed by a European Ombudsman’s inquiry on the gas projects that were included in the 2019 list of PCIs (projects of common interest) – Malta’s included. 

According to civil society group Food & Water Europe, the EC did not adequately assess the sustainability of the 32 gas projects, and as such broke EU law.  

Indeed, the Commission had admitted that its sustainability assessment of candidate gas projects had been “suboptimal due to a lack of data” and that it is now updating the criterion for the next PCI list of 2021. 

The Ombudsman last month agreed, saying it had been “regrettable” that the EC did not attempt to improve the available data. Now under a proposed reform, the EC has ruled out unabated gas projects from applying for funding completely. 

“A key question is whether to keep natural gas infrastructure as an eligible infrastructure category or not,” the EC said, opting to exclude methane gas infrastructure “as the most effective and coherent approach”. 

The EC also said Europe no longer had such pressing gas supply security issues, meaning gas projects were not deemed as strategic as in the past. 

“By the early 2020s, when the gas projects of common interest currently under construction will be in operation, Europe should achieve a well-interconnected and shock-resilient gas grid and all member states will have access to at least three gas sources,” the EC said. 

“Considering that the future natural gas demand is estimated to significantly decrease in line with the Green Deal objectives, natural gas infrastructure no longer needs support through the TEN-E policy.” 

This means the CEF billions will only be spent on renewable and low carbon gases, such as smart gas grids, and green gases, typically biogas and biomethane, but also hydrogen. 

Those could include hydrogen transmission pipelines and related equipment such as compressors, storage facilities, and facilities for liquefied hydrogen. “There is currently very limited dedicated infrastructure in place to transport and trade hydrogen across borders,” it said, adding that new projects could consist of a “significant extent” of assets converted from natural gas. 

Europe aims at becoming the first climate-neutral continent by 2050, but this requires moving towards cleaner energy infrastructure. 

Malta gas pipeline 

Malta’s natural gas pipeline between Italy and Malta was expected to be operational by 2024. It has been a high priority in the ongoing effort to link Malta to Europe’s energy network, and will end Malta’s “gas isolation”. 

Malta’s electrical network was linked to Europe’s via Sicily in 2015, but remaining on the periphery from the EU’s natural gas networks affected the security of Malta’s energy supply. 

This pipeline would help Malta cut emissions from shipping, as the aim is to slash emissions by at least 50% by 2050.