The price of petrol and diesel will go up slightly and the government will be pumping the money gained into a new fund for alternative energy projects.
This fund, which should rake up to €8 million, will come from an excise tax of €0.055 on every litre of petrol and €0.02 on every litre of diesel.
Being green pays with this budget, as the government announced incentives to push families and businesses into making better use of energy and to invest in alternative sources.
The energy-saving bulbs promised on the eve of the March general election are finally here. Families will get vouchers to redeem them from the shops of their choice to get these bulbs, in an initiative that will cost the government €4 million. With electricity tariffs going up, this move should help each family to save between €100 and €200 a year on their bills.
Meanwhile, non-energy-saving bulbs will carry an eco-tax of €0.25 while that on neon tubes would be of €0.50, as the EU embarks on a mission to switch off traditional bulbs by 2010.
Installing solar water heaters is also being pushed through a scheme that should benefit 4,500 families and help each one to recoup 66 per cent of the costs; up to a maximum of €460. Another scheme, totalling €500,000, provides a 50 per cent refund on the investment of photo-voltaic cells; up to a maximum of €3,000.
Some 1,000 families will get their bills to insulate roofs and double-glaze their windows slashed by 33 per cent; up to a maximum of €300.
As families ponder what incentives to adopt, the government has earmarked €200,000 towards an information campaign that will see Enemalta providing families with personalised advice on energy saving and tips on curbing consumption.
Industry will also benefit through a refund of 60 per cent on the investment of renewable energy - €10 million has been dedicated to this scheme.
Companies that choose to invest in photo-voltaic panels will receive a tax credit of 243 per cent on their investment. The government will subsidise 40 per cent of the cost of energy for companies up to a maximum of €300 for small companies and €1,000 for larger ones.
Steps will be taken to start the offshore wind farm at Is-Sikka l-Bajda off Mellieħa at a cost of €130 million, which is expected to supply energy to 21,000 households; equivalent to 80 per cent of electricity consumption in Gozo alone and four per cent of energy consumption in Malta.
The government felt the country required another plant at Delimara to replace the Marsa power station. Substantial investment is envisaged to connect Malta with the European grid.
Measures to protect the environment include the conclusion of the gas treatment project, the thermal treatment facility, which incinerates waste, and the drainage purification plant at Ta' Barkat.
The polluter-pays-principle will be applied through a levy of €0.15 on every plastic bag handed out by retail outlets - 40 million plastic bags are used annually in Malta.
The government will also introduce a charge of €0.01 on every 80 gms of printed material and magazines, which devoted more than half their content to advertising.
The luxury of owning a swimming pool will come at a cost, with higher licence fees for private and commercial swimming pools, in a bid to curb water and electricity consumption.
Addressing the emissions challenge, the budget seeks to overhaul the public transport system. This includes a new fleet of buses of different sizes and the introduction of new routes. The services of taxis, coaches and vans will be liberalised and law enforcement will be reformed.