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Italy and the Czech Republic have warned Brussels that the European Union’s industrial base risks lasting damage unless the bloc eases the burden of its green rules, according to a letter seen by Euronews.
The joint warning, issued amid an unprecedented energy shock, reflects mounting pressure from EU capitals to protect domestic manufacturing as high energy and carbon costs collide with the bloc’s decarbonisation targets.
“While security of supply remains the immediate priority, the combination of some of the world’s highest energy prices, high carbon costs and exceptional fuel prices risks further weakening European manufacturing and accelerating the relocation of production and investment,” reads the letter.
Italian Prime Minister Giorgia Meloni visited her Czech counterpart Andrej Babiš in Prague last week to coordinate the plan of action between Rome and Prague ahead of next week’s summit of EU leaders in Brussels.
Rome and Prague are targeting the bloc’s carbon market, currently under political scrutiny, as well as its recently weakened methane rules, as they seek a broader coalition within the European Council.
The joint proposal outlines several targeted interventions designed to provide immediate economic oxygen to struggling European factories. Chief among them are the extension of free carbon allowances for heavy industry under the bloc’s carbon market, the Emissions Trading System (ETS), and freezing the phasing out of free carbon allocations for sectors affected by the bloc’s carbon border tax.
The push comes amid growing concern over European competitiveness, which is set to feature prominently on the agenda when EU leaders meet on October 15.
Italy and Czechia framed these measures as “temporary” interventions that “preserve long-term climate objectives”. But several of their demands would amount to significant changes to the way the EU applies its climate rules to industry.
“A temporary suspension of the EU ETS would provide immediate relief to European industry from carbon costs. However, in the absence of sufficient support for such an option, it is worth considering a number of targeted and immediately actionable alternatives that the European Council could promote to alleviate the impact of the current shock and complement measures already announced at European level,” reads the letter.
Italian Defence Minister Guido Crosetto recently went further, arguing that the ETS should be suspended until economic conditions improve.
“There would be better times” to reintroduce the carbon market in order to protect the environment, he said.
“A tax like the ETS today is unjust, absurd, unsustainable in international competition, and creates inequalities because it falls indiscriminately and equally on all European end consumers,” Crosetto wrote on X.
The Meloni-Babiš initiative is the latest sign of a broader push among EU capitals to give greater weight to industrial competitiveness when implementing the bloc’s climate policies.
Austria’s Energy Minister Wolfgang Hattmannsdorfer made a similar case on the sidelines of a competitiveness ministers’ meeting in Brussels on 24 September.
Hattmannsdorfer called for “economic patriotism” to keep industries and jobs in Europe, arguing that maintaining European production is crucial for regional wealth, welfare and environmental standards.