To tackle the problem, Rome is seeking to overhaul the country\u2019s electricity market by shifting the burden of paying for EU permits to emit carbon from gas-fired power plants to consumers.<\/p>\n
Rome says this should lower bills, as the most expensive form of electricity generation, usually gas, currently sets the price for all companies, even if they are producing renewable power and do not need to buy permits. These account for up to a quarter of the wholesale price of electricity.<\/p>\n
In a video message explaining the proposals, which require EU approval, Meloni called the current system a \u201cde facto tax imposed by Europe\u201d. <\/p>\n
She said her government wanted to separate the cost of carbon permits \u201cfrom the pricing of renewable electricity such as hydroelectric or solar, to lower costs\u201d.<\/p>\n
But analysts warn the scheme is likely to meet fierce resistance in Brussels as lower wholesale prices will sharply reduce clean revenues at energy companies, at a time when Italy<\/a>\u2019s renewable rollout is lagging behind other EU economies. <\/p>\n The EU Emissions Trading System (ETS), which forces heavy polluters to buy permits, is a centrepiece of the bloc\u2019s push to discourage fossil fuel use and promote more renewables development.<\/p>\n \u201c[The Italian scheme] is tantamount to eliminating carbon pricing from the electricity sector,\u201d said Carlo Stagnaro, an energy economist at the Bruno Leoni Institute, a liberal think-tank. \u201cAt the end of the day, it has the same effect as [a] tax on renewable energy.\u201d<\/p>\n A spokesperson for the Italian renewable energy company ERG Group said the measure was a \u201ccure worse than the disease\u201d and would result in a \u201cpush for gas\u201d.<\/p>\n Massimo Schiavo, lead analyst for Italian utilities at S&P Global Ratings, also questioned the extent to which it would lower bills as it will not affect output from renewable energy generators under fixed-price contracts.<\/p>\n Italy\u2019s proposals come as the cost of electricity and decarbonisation are high on the agenda across Europe. German Chancellor Friedrich Merz recently suggested that the ETS be watered down to give breathing space to the EU\u2019s heavy industries. <\/p>\n Brussels plans to present its own options in March for EU energy market reforms that could ease costs.<\/p>\n A spokesperson for the Commission said it was aware of Rome\u2019s proposals, adding: \u201cAs a general point, it is for member states to decide if they wish to support a specific company or sector. If they decide to do so, it is for them to ensure that any measures are in line with EU law.\u201d<\/p>\n Analysts warned that if Rome succeeded in lowering bills, other countries may follow suit.<\/p>\n \u201cIn the current geopolitical climate, it\u2019s an important move because if it gets approved, then it sets a precedent and this might spread across Europe,\u201d said Jean-Paul Harreman, director at Montel Analytics. In Britain, shadow energy secretary Claire Coutinho said the opposition Conservative Party would remove the carbon tax if it returned to power.\u00a0<\/p>\n Matteo Leonardi, co-founder of Italian climate change think-tank Ecco, said the scheme appeared designed to fuel a confrontation with the EU ahead of Italy\u2019s general elections next year, potentially allowing Meloni to shift the blame to Brussels for Italy\u2019s energy woes at a time of sluggish economic growth.<\/p>\n \u201cWhat Italy wants to do is raise a conflict with the EU on its climate package, and at the national level they want to sell the idea that they have tried to reduce the price of electricity but Europe will not allow us,\u201d Leonardi said. \u201cAt the EU level, they want to criticise and jeopardise the whole mechanism of the emissions trading system.\u201d <\/p>\n Italy\u2019s industry minister, Adolfo Urso, recently called for the ETS system to be suspended on all industries, not just power generation.<\/p>\n Domestic protests are already mounting. More than 150 Italian scientists and economists, led by the Nobel Prize-winning physicist Giorgio Parisi, wrote an open letter to Meloni\u2019s government recently, warning against moves to weaken Europe\u2019s \u201cdecarbonisation tools\u201d.\u00a0<\/p>\n Italy\u2019s industrial association Confindustria has long pleaded for relief from power bills. It estimates that Italy\u2019s electricity prices were 30 per cent higher than the EU average in the first half of 2025, eroding competitiveness. Italian industrial output contracted 0.2 per cent in 2025, following a sharper drop of 4 per cent in 2024, according to statistics agency Istat.<\/p>\n Rome\u2019s new scheme \u2014 which must be approved by parliament before being sent to Brussels for its approval \u2014 would see the government reimburse gas-fired power producers for the cost of carbon permits, using funds raised directly from electricity consumers.<\/p>\n But Stagnaro warned that \u201cthe entire mechanism could backfire\u201d if it leads to such a sharp drop in wholesale prices that other countries start to import more electricity from Italy, increasing gas use. Italians would then pay carbon permit costs for consumers elsewhere. <\/p>\n \u201cIf you want to reform this you have to do it at the European level, not at the member state level or it would just be a mess,\u201d he said.<\/p>\n Climate Capital Where climate change meets business, markets and politics.\u00a0Explore the FT\u2019s coverage here<\/a>.<\/p>\n![\"Bar](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/03\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/6c25da80-15b5-11f1-8e48-4d5f157bf1b3-standard.png\")
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Prime Minister Giorgia Meloni called the current system a \u2018de facto tax imposed by Europe\u2019 \u00a9 Gregorio Borgia\/AP<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/03\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/384cfd92-a50b-4bce-9d00-ffdbff93b8ec.jpg\")
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