Italy's draft energy law axes carbon tax

Government to freeze duties on fossil fuels; fund "cost-effective" renewables

Government proposals to freeze Italy's carbon tax on fossil fuels and offer conditional support to renewable energy sources arrived in the lower house of parliament this week. Part of a draft energy law whose main objective is to liberalise the national energy market, the proposals reflect suggestions made by a parliamentary committee this spring (EED 25/04/02).

Introduced in 1999, Italy's carbon tax is subject to in-built annual increases. Under the new legislative proposals, it will be frozen and then gradually replaced with what the government calls "an advanced taxation system" that will "encourage virtuous behaviour on the part of generators". No details of how the new taxation will work have yet been released, but the government has indicated that lowering greenhouse gas emissions remains a priority (EED 09/10/02).

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