Italy Pushes for Diesel Price Cuts and Suspension of EU Carbon Trading System

Italy's Deputy Prime Minister Matteo Salvini called on Wednesday for diesel prices to fall below 1.90 euros per liter, framing the demand as a minimum threshold of at least 20 to 25 cents below two euros, with proposals set to be presented at a cabinet meeting later that day. The push came as Italian officials and industry leaders mounted coordinated pressure on the EU Emissions Trading System, arguing that high energy costs are placing an unsustainable burden on European industry. The calls from Rome arrived on the same day that Emanuele Orsini, president of Confindustria, told the German newspaper Frankfurter Allgemeine Zeitung that Europe is in an emergency situation and should suspend the ETS entirely. The convergence of political and industrial voices in Italy signals a deliberate effort to build momentum ahead of EU-level discussions on energy and climate policy.

Orsini warns ETS threatens Italian and German industry alike Emanuele Orsini, who has led Confindustria since May 2024, argued in his interview with the Frankfurter Allgemeine Zeitung that the current energy cost environment constitutes an emergency that should concern both Italy and Germany. He said the ETS suspension was necessary to protect industry from a risk that he described as acute and immediate. Gilberto Pichetto Fratin, Italy's Minister of the Environment and Energy Security, stopped short of calling for a full suspension but said a correction to the ETS mechanism is needed regardless. „We are not calm about high energy prices, global risk” (We are not calm about high energy prices — this is a global risk) — Gilberto Pichetto Fratin via ANSA Pichetto Fratin's position reflects a pragmatic fallback: if a suspension cannot be achieved at the European level, Italy would still push for structural adjustments to the system. The minister's framing suggests the Italian government is preparing for a negotiating process rather than expecting an outright policy reversal in Brussels. „We are in an emergency situation, Europe should suspend the ETS. Industry at risk, should concern Italy and Germany.” — Emanuele Orsini via ANSA

Italy finds itself isolated within the EU on ETS opposition Despite the intensity of the Italian position, Rome finds itself in a minority within the European Union on the question of the ETS, according to reporting by ANSA. Most EU member states have not aligned with Italy's call for suspension or significant correction of the carbon market mechanism. Environmental non-governmental organizations pushed back sharply, warning that targeting the ETS would weaken the European Union's capacity to respond to the energy crisis rather than alleviate it, according to ANSA's coverage of their statements. The NGOs framed the ETS not as a cause of the energy cost problem but as a tool that should be preserved to drive the structural transition away from fossil fuels. Italy's isolation on this issue complicates any effort to build a blocking minority or a reform coalition within EU institutions. The divergence between Rome's industrial-cost framing and the environmental framing dominant elsewhere in Europe reflects a broader tension in EU energy and climate policy that has intensified since global energy prices rose sharply.

The EU Emissions Trading System was launched in 2005 and is the world's largest carbon market. It operates by setting a cap on total greenhouse gas emissions from covered sectors, with companies required to hold allowances for each tonne of CO2 emitted. The system has been subject to repeated reform debates, particularly during periods of high energy prices, with critics arguing it adds to industrial costs and supporters contending it is essential to meeting EU climate targets.

France sees electric vehicle orders surge as oil prices climb In France, the broader energy price environment is producing a different consumer response. According to Sud Ouest, an increase in oil prices has triggered a surge in orders for electric vehicles, suggesting that price signals at the pump are accelerating the shift toward electrification among French consumers. The French development stands in contrast to the Italian government's focus on reducing fuel costs through price caps and ETS reform, illustrating divergent national responses to the same underlying pressure of high energy costs. While Italian officials seek relief through regulatory rollback, French consumers appear to be responding by accelerating their transition away from combustion-engine vehicles. The contrast underlines how the same macroeconomic pressure — rising fossil fuel prices — can produce opposing policy and market reactions depending on national context and existing incentive structures. 1.90 (euros per liter) — Salvini's target ceiling for diesel prices