Italy and Czechia urge EU to ease green rules to protect industry

Italy and the Czech Republic have issued a joint warning to Brussels, stating that the European Union's industrial base faces lasting damage unless green regulations are eased. The warning, detailed in a letter, highlights how high energy prices, carbon costs, and fuel prices are weakening European manufacturing and potentially accelerating the relocation of production and investment outside the bloc.

Italian Prime Minister Giorgia Meloni and Czech Prime Minister Andrej Babiš recently met in Prague to coordinate an action plan ahead of the EU leaders' summit in Brussels on October 15. The two nations are seeking to build a broader coalition within the European Council to target the bloc's carbon market and methane rules.

The joint proposal includes several targeted interventions to support struggling factories, such as extending free carbon allowances for heavy industry under the Emissions Trading System (ETS) and freezing the phase-out of free carbon allocations for sectors affected by the EU's carbon border tax. While the measures are framed as temporary interventions to preserve long-term climate objectives, they represent significant proposed changes to how the EU applies climate rules to industry.