The Italian government wants to reimburse gas-fired power stations for their emission costs

The Italian government, seeking to lower electricity prices, is proposing to reimburse gas-fired power plants for the cost of CO2 emissions. Gas-fired power plants account for around 50% of Italy's electricity production but are marginalised for most of the year. By reimbursing power plants for the cost of their emissions, the government hopes to lower electricity prices by around €28/MWh based on current CO2 prices. The Italian Parliament has been asked to consider the proposal and is expected to make a decision by the end of April. The European Commission will then have to rule on the mechanism's compliance with European rules. The cost of buying back the power plants' emission rights will be financed by a tax on electricity consumption which, given the weight of gas-fired power plants in total consumption, should amount to around €10/MWh, generating a net gain for consumers of around €18/MWh.