Italy has called on the European Union to temporarily suspend its Emissions Trading System (ETS) while a review is conducted, citing high costs on domestic industries. Industry Minister Adolfo Urso said the current carbon pricing system acts as an “additional tax” on energy-intensive sectors such as steel, cement, and chemicals, reducing Italy’s global competitiveness against the United States and China. The ETS, which requires heavy industries, power plants, and airlines to pay for each tonne of CO₂ emitted, has helped cut covered emissions by about 39% since 2005 and generated over €260 billion for climate projects. Italy wants the scheme frozen until benchmarks and quotas are adjusted to better support exporters and ease cost pressures.
The proposal has broader implications for Europe. Italy is one of the EU’s largest economies, and its call to suspend participation has already pushed carbon prices below €70 per tonne, potentially weakening the market signals designed to drive emission reductions. Other member states, including France and Nordic countries, warn that suspension could slow clean energy investment and undermine EU climate targets. The debate highlights the tension between protecting domestic industrial competitiveness and maintaining a unified approach to achieving the bloc’s 2030 emissions reduction goals. More