Energy to rise 35% without government help: Federacciai

The Italian government may end the tax credit for energy-intensive sectors such as steel and scrap the exemption from electricity transport and distribution charges. This move risks increasing electricity costs in the country by 35% for steelmakers, Federacciai president Antonio Gozzi tells Kallanish.

“While the French and German governments adopted specific measures to support energy-intensive industry and are wading the countries through this energy crisis, in Italy the opposite is happening,” Gozzi earlier told local broadsheet IlSole24Ore.

The French industry pays about €42 ($45) per megawatt-hour electricity, while German steelmakers pay approximately €60/MW-h. Including the tax credit and exemption from electricity distribution charges, Italian steelmakers pay about €100/MW-h. Without the government’s help, energy-intensive industries will pay some €120/MW-h, unlike their French and German competitors.

Gozzi says he is in talks with the Italian authorities in Rome. Together with Confindustria, the national industrialists’ association, he is proposing a project be implemented by the end of the year that allows Italian companies to align their electricity costs with France and Germany.

The Italian electricity operator in Italy has 25 terawatts available from renewable sources. Instead of trading the surplus energy on the stock exchange, it may sell it to energy-intensive companies at a discounted price of €50/MW-h. The industry would then return the value of the discounted energy within a certain timeframe with investments in renewable plants, Gozzi proposes amongst other possible solutions.

The risk of high energy costs is that Italian steelmakers and other sectors will lose competitiveness. “We have sold steel to our clients based on a certain cost of energy that represents between 33-35% of the total cost of steel,” Gozzi continues. In the coming weeks, Federacciai and Confindustria will suggest that the exemption from electricity distribution charges stops on 1 January 2024 as the rules should not change abruptly in the course of this year.

The two associations will also ask to the government to reduce the tax credit, instead of stopping it, from the current 25% to 20%. Federacciai’s warning has been backed by steelmakers such as Gruppo Arvedi and the country’s metallurgy unions.

“The issue of energy competitiveness in our country, despite the efforts made, continues to be a factor of international difference that penalises our country, an Achilles heel that we can no longer accept in this way … It is necessary to avoid negative repercussions, especially on production and production continuity and, therefore, consequently on employment,” says FIM CISL unions secretary general Roberto Benaglia in a note. He has also asked for an urgent meeting with Minister of Enterprises and Made in Italy Adolfo Urso.

Natalia Capra France