Italy’s government has postponed the approval of a decree that would boost the country’s energy security and green transition, amid internal disagreements within the ruling coalition. The decree, which was expected to be discussed by the cabinet on Monday, contains measures to promote renewable energy, offshore drilling, LNG terminals, carbon capture and storage, and hydroelectric plants.
However, two government officials, who asked not to be named, said the package was complex and required further investigation. They did not specify when the decree would be resubmitted for approval. One of the contentious issues concerns plans to extend concessions held by companies managing hydroelectric plants in exchange for more investments, one of the sources said. This would benefit utilities such as Enel, A2A and Edison, but could face opposition from environmental groups.
Another controversial provision would allow more offshore drilling in the Adriatic sea, provided that the fields have potential gas reserves exceeding 500 million cubic meters. This would go against the wishes of some regions and municipalities that have voted to ban drilling near their coasts.
The decree also aims to revive an existing program run by state-controlled group GSE to buy domestically produced natural gas and sell it to energy-intensive firms at affordable prices. This would help reduce Italy’s dependence on gas imports, especially from Russia.
Moreover, the decree envisages setting aside 420 million euros ($445 million) through 2026 to build a strategic hub for floating wind power in southern Italy. This would be a pioneering project in the Mediterranean and could attract foreign investors.
To increase supplies of natural gas, which is seen as a transition fuel to lower carbon emissions, the decree states that onshore LNG terminal projects are of public utility and urgency. This would speed up work on two LNG terminals promoted by Enel in Porto Empedocle and by Iren and Sorgenia in Gioia Tauro.
The decree also outlines a framework for the development of carbon capture and storage facilities (CCS), which are deemed by experts as crucial for meeting emission reduction targets agreed with European Union authorities. Energy group Eni and power grid operator Snam announced in September a project to set up a carbon capture hub offshore Ravenna.
The delay in approving the decree comes as Italy faces pressure from the EU to present its recovery plan by April 2021. The plan, which will be funded by 209 billion euros ($222 billion) of EU grants and loans, is expected to include several green initiatives to modernize the country’s economy and infrastructure.
Italy’s coalition government, led by Prime Minister Giuseppe Conte, is composed of several parties with different views on energy and environmental issues. The main partners are the anti-establishment 5-Star Movement, which has a strong green agenda, and the center-left Democratic Party, which is more pragmatic and pro-business.
The government has also faced criticism from opposition parties and industry associations for its handling of the coronavirus pandemic, which has caused more than 37,000 deaths and plunged the country into a deep recession.
Despite the challenges and divisions, Conte has expressed confidence that his government will be able to deliver on its promises and lead Italy towards a more sustainable and resilient future.
Source: [Reuters]
