Italy's Confindustria hands Brussels a 10-point list to cut industry's carbon bill

Italy's Confindustria hands Brussels a 10-point list to cut industry's carbon bill Italian industry wants the EU to soften free-allowance rules before July's ETS review, a push that could ease compliance costs for energy-intensive sectors if Brussels listens. Confindustria, Italy's main industry lobby, presented 10 proposals to the European Commission on Wednesday (2026-06-10) aimed at curbing carbon costs and protecting industrial competitiveness ahead of the bloc's ETS revision due in July.⁶ The intervention raises the stakes on a fight Rome has been waging for weeks. In late May (2026-05-21), Italy urged the Commission to scrap a planned revision to ETS benchmarks that govern free carbon allowances handed to industry, arguing that pressing ahead now would raise compliance costs for energy-intensive plants and weaken European competitiveness against rivals outside the bloc.¹ For carbon traders, the question is supply. Free allowances offset what industrials must buy on the market, so any change to the benchmarks that set them feeds directly into net demand for EUAs. The benchmark KRBN carbon ETF traded at €76.47 on Thursday (2026-06-11), flat on the session. Tighter free allocation would lift industrial purchasing; a softer revision, of the kind Confindustria wants, would do the opposite.^6,1 The Commission has already set the rules Italy is contesting. On 11 May (2026-05-11) it announced new ETS benchmarks under which European industry will keep free allocations covering around 75% of emissions, a level designed to nudge firms toward electrification while shielding them from the full carbon price.⁵ That 75% figure is the battleground. Italy and Confindustria want the revision delayed or watered down; the Commission has framed the package as targeted housekeeping rather than a retreat. In May (2026-05-05), climate commissioner Wopke Hoekstra said Brussels would propose targeted improvements to the ETS while maintaining stable long-term signals in its July review.^4,6 The phrasing matters because the two sides are not describing the same thing. Hoekstra's targeted improvements preserve the carbon price signal. Confindustria's 10 points are designed to blunt it. Whether July's proposal leans toward stability or toward relief will tell traders which way the free-allocation pool is headed.^4,6 Timing works against a clean outcome. Analysts told Montel in May (2026-05-21) that the EU's plan to agree carbon market reforms in the first quarter of 2027 looked ambitious and extremely challenging, with the US-Israeli war against Iran likely to delay the process. A July proposal is one thing; legislation that actually changes allocation is years out.² So the near-term price effect of Confindustria's list is muted. The fight shapes expectations for post-2027 supply, not the front of the curve. EUAs respond more immediately to gas, power demand and weather than to a lobbying document, however detailed.^2,6 But the lobbying is not happening in a vacuum, and Italy has a domestic case to make. Gas plants set the power price in 89% of hours so far in 2026, Ember calculates, against 15% in Spain. In March (2026), Italy's average power price ran at €142 per MWh versus €59 in Spain. High and gas-dependent power costs give Rome a sharper grievance about anything that adds to the industrial carbon bill.³ The competitiveness argument cuts both ways. Looser free allocation eases costs for Italian industrials now but weakens the price incentive to electrify, the same incentive the May benchmarks were built to sharpen. Confindustria is asking Brussels to relax a mechanism the Commission has just tightened for a reason.^5,6 For now the chain stays theoretical: a tighter EUA market would feed through to German baseload and, at the margin, pressure coal in the power stack. None of that moves on a wish list. It moves on what the Commission actually proposes.⁵ Watch the July proposal for whether it touches the 75% free-allocation level or leaves it intact. If Hoekstra's targeted improvements spare the benchmarks, Italy's campaign has failed and industrial EUA demand holds. If Brussels blinks, the post-2027 allowance pool loosens, and the bullish case for carbon weakens with it.^4,56