Italy Labels EU Carbon Market "Industrial Suicide" After Eni Calls for CO2 Cost Freeze
Rome's escalating assault on the EU ETS, backed by Eni's call to freeze carbon costs, is now directly targeting Germany's political support for the current system.
Italy's government labelled the EU Emissions Trading System "industrial suicide" after Eni, the state-backed energy major, called for a freeze on carbon compliance costs — the most pointed language yet in Rome's sustained campaign to rewrite European climate market rules.6
The framing carries direct implications for EUA prices. ICE EUA Dec-rolling stood at €86.27 per tonne of CO2 as of Tuesday (2026-09-22). Analysts had already cut near-term EUA forecasts significantly; Reuters reported on April 30 (2026-04-30) that uncertainty over proposed policy changes and future supply levels had driven material reductions across the analyst community.5
Italy's deputy energy minister made the diplomatic push explicit on Wednesday (2026-09-09), urging Germany to join in demanding a major ETS overhaul, Montel reported. He said Italy wanted Germany to acknowledge that the ETS was harmful to European industrial competitiveness. Berlin has not publicly responded.6
Germany's position matters more than any other member state's. Meaningful ETS reform requires buy-in from Europe's largest industrial economy, and Italy alone cannot shift Commission policy on benchmarks, free allocation rules, or supply curves.6
Rome's proposals are specific. Italian industry group Confindustria has presented 10 reform proposals ahead of the European Commission's ETS revision consultations, all aimed at curbing carbon costs and shielding energy-intensive producers from competitive disadvantage relative to non-EU rivals, Montel reported.4 Italy has simultaneously called on the EU to abandon a planned revision to ETS benchmarks governing free allowance distribution to industry, warning that proceeding would raise compliance costs for energy-intensive sectors.1
Talks between Rome and Brussels have been running hard. A government source told Montel that negotiations were continuing with almost daily exchanges, and that no negative feedback from the Commission had been received. The source said the Cisaf framework appeared to allow for case-by-case assessment and faster procedures — language suggesting Italy sees a path through existing state aid rules.2
Analysts are less confident. Italy's approach may clash with the EU's updated state aid framework, Montel reported, with observers warning that Rome's proposals could run into the Commission's own revised rules even if no explicit objection has been raised yet.2
Eni's intervention adds industrial weight to what had been primarily a political dispute. The company's call for a carbon cost freeze aligns with Confindustria's competitive-harm argument but puts a major European energy producer on the record against a market mechanism Brussels has positioned as central to its climate architecture.4,6
On the supply side, EEX confirmed it will stop auctioning REPowerEU carbon allowances once the scheme reaches its €20 billion target, the exchange's CEO said in an interview, removing one source of incremental EUA supply at that point. Any structural supply changes flowing from ETS reform would layer on top of that eventual cutoff.3
For EUA traders, the most consequential near-term signal is Germany. If Berlin endorses Italy's overhaul push ahead of the Commission's revision consultations, expectations on supply trajectory and benchmark reform would shift materially from where the current €86 price implies.6,2