Overview
- Prime Minister Giorgia Meloni has formally asked the EU to suspend application of the ETS to electricity from fossil-fired plants, arguing it inflates power prices.
- Denmark, the Netherlands, Sweden, Finland, Spain, Portugal, Slovenia and Luxembourg oppose a freeze, calling it a worrying step back that would weaken carbon price signals and deter investment.
- The European Commission and several leaders favor keeping the system, with Ursula von der Leyen urging modernization rather than suspension and Teresa Ribera warning that scrapping it would be a serious mistake.
- A group of 102 companies urged EU leaders not to scapegoat the ETS, while analysts estimate it contributes about 10–20% of Italian power bills and point to gas dependence as the larger cost driver.
- Italy’s plan has scant backing beyond the Czech Republic, Slovenia and Poland, with attention shifting to the scheduled ETS review by July and the planned ETS2 for buildings and transport in 2028.