Government energy subsidies should be gradually phased out and replaced with stronger incentives for renewable energy, Malta Chamber of Commerce CEO Marthese Portelli has said ahead of the 2026 Budget.

Speaking to The Malta Independent, Portelli said subsidies cannot be sustained indefinitely and warned that Malta must prepare for the eventual end of government support. Instead, the Chamber is advocating for tax breaks, credits, and rolling schemes to encourage renewable energy adoption and long-term sustainability.

“In truth, energy prices are subsidised through taxpayers’ money. While it may look like you’re saving on your bill, you’re still paying for it through reduced investment in other areas,” Portelli explained. “Blanket subsidies instigate waste. We need to empower businesses to invest and reward those who help Malta reach its renewable energy targets.”

The Chamber’s proposals include removing VAT on photovoltaic panel installations, providing reimbursements when households switch to energy-efficient appliances, and offering increased tax credits for businesses investing in renewable systems and electric vehicles.

Citing the EU’s 2024 Country Report and a 2025 Central Bank paper, Portelli said a “well-communicated, gradual suspension” of subsidies would ease the transition and encourage private green investment. Sudden cuts, she warned, must be avoided at all costs.

The Chamber’s 47 proposals for Budget 2026, streamlined from 200 the previous year, also focus on traffic reduction, public sector reform, and infrastructure. Among the transport ideas is an “e-mobility wallet,” allowing people to use subsidies on sustainable transport, including shared mobility. Parking fees in central areas would be reimbursed to users through this wallet, incentivising greener options.

Waste management also features prominently. The Chamber is proposing barcoded waste bags to ensure accountability, as well as AI-driven systems to improve coordination of roadworks and logistics.

On tourism, Portelli emphasised quality over quantity. “Whether a tourist stays in a five-star or a three-star hotel, they should all be given a quality experience,” she said. “We must look not just at the number of tourists, but at their net spend, and ensure our infrastructure can keep up.”

While acknowledging some measures may prove unpopular, Portelli insisted they are necessary for Malta’s long-term well-being. “This year’s budget needs to pave the way for Malta Vision 2050. Some solutions may challenge the status quo, but if they are fair and ensure a level playing field, people will accept them,” she said.