Why Italy voted for the EU emissions reform
The Italian government's favorable vote on the reform of the ETS system for emissions trading caused some surprises. Sergio Giraldo's article
The reform of the ETS system , relating to the trading of CO2 emissions, already approved by the European Parliament last week, was definitively ratified in Brussels. The European Council dedicated to Agriculture and Fisheries in fact voted in favor of the five directives that are part of the revision package, which broadens their scope of application and raises the decarbonisation objectives. The new target is now a 62% reduction in emissions by 2030 compared to 2005 levels. The maritime and road transport sectors are also added to the ETS, as well as emissions related to the heating of homes. A social fund is set up which will give financial support to those who cannot afford the costs of this reform and finally the new system of duties on imported CO2, the CBAM mechanism (Carbon Border Adjustment Mechanism), is inaugurated.
THE VOTE FOR ITALY
Italy, at the hands of the government's deputy permanent representative to the European Union, has voted in favor of the whole package. In the specific vote on the modification of the ETS directive (2003/87/EC) out of a total of 27 countries, only Poland and Hungary voted against, while Belgium and Bulgaria abstained.
The favorable vote of the Italian government on this provision, which represents the heart of the package, has aroused some surprises, even within the parliamentary components of Brussels that support the majority. In the vote of 18 April in the European Parliament on the amendment of the ETS directive, in fact, two important parties that support the government, the Brothers of Italy and the League, had cast a negative vote. It is true that an Italian vote against in the Council would not have changed anything in terms of substance, however this inconsistency catches the eye.
Sources close to the majority let it be known that the ETS reform has been supported by the Government, which has positively judged the possibility of a one-year postponement of the entry into force of the new rules concerning houses and road transport in the event of high prices of energy. Furthermore, the Government appreciated the fact that the revenues from the new ETS are now being allocated to the Member States and to the new Social Fund for the climate (65 billion euros over seven years). With the new directive, Italy would be the recipient of around 7 billion euros, which would make our country the third beneficiary of the funds. In summary, the postponement clause in the event of high energy prices and a new allocation of contributions would have been judged by the Government to be such favorable elements as to lead to a favorable vote in the Council.
However, the improvements made to the text had not been judged sufficient by the Brothers of Italy and the League during the parliamentary vote last week in the plenary session in Strasbourg, so much so that the two political forces had voted against, while Forza Italia had abstained. Therefore, a certain discontent is leaking from the majority political forces present in Brussels for what appears to be a sort of automatic pilot inserted, when in certain fora the Government is called to cast a vote which does not seem to take into account the political positions already expressed at the European level by the forces that sustain it.
PLUS TAXES ON GAS AND PETROL
In fact, the new legislation will result in higher taxes on gas and petrol, weighing even more on the wallet of Italian families. The Commission plans to introduce a new excise duty on petrol and diesel of 10-15 cents per litre, corresponding to a price of CO2 emission allowances of €45 per tonne, half the current price. The increase on the heating gas bill could be up to 260 euros per year. But businesses will also suffer the consequences. Assocarta, for example, did the math and estimated the additional costs between 2026 and 2030 for the sector at 680 million euros. Costs that companies in the sector will have to bear, without however this affecting in any way the real reduction of emissions.
WHAT CHANGES FOR THE EMISSIONS QUOTAS
In fact, the reform envisages the cancellation of the free allocations of emission quotas and a more rapid decline in the number of quotas put up for auction, with a clear effect of increasing the prices of the quotas themselves. The directive does not take into account the already high efficiency achieved by the paper sector, where cogeneration is widespread but uses methane gas, a hydrocarbon which in Brussels is seen as the devil. The paper mills claim that they have no real alternatives to the use of cogeneration and therefore methane, given the large amount of energy required. With hydrogen still representing a mirage and still having prohibitive costs, energy-intensive companies will simply be forced to pay more taxes, losing competitiveness above all with respect to competition from non-EU countries, not subject to this tax.
In short, the invasive regulatory mass linked to the Green Deal continues its inexorable march, destined to increase inflation and forcing citizens and businesses to bear the costs of an increasingly less sustainable transition.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/riforma-ets-emissioni/ on Sun, 30 Apr 2023 05:07:14 +0000.