Failed European policies: a change of course is needed

Of the electricity price of 250 euros/MWh, 40 euros/MWh – the same for everyone – is attributable to the price of CO₂, which is derived from the prices on the emissions trading market, the Emissions Trading Scheme (ETS), which, as of mid-September 2026, was trading consistently above 85 euros per allowance. The price of electricity tends to be set by gas-fired combined-cycle power stations, which emit around half a tonne of CO2 per MWh produced.

As each allowance covers one tonne of CO₂, the CO₂ component of the electricity price is equivalent to roughly half the price of the allowance: 80 divided by 2, which equals 40 euros. ETS prices of 85 euros contrast with 12 euros in China and 30 in some US states, where the schemes are, moreover, applied far more leniently. The price difference gives an idea of how far ahead Europe is in its decarbonisation policies, because CO₂, which is not a poison, is not a local pollutant, but a climate-changing gas that has effects on a global scale, not just in the immediate vicinity of the plant that emitted it.

The EU’s 6 per cent share of global emissions – totalling 53 billion tonnes – is too small to fully justify Europe’s ambitions. Despite the rhetoric, EU emissions are not falling at the hoped-for rate; on the contrary, they are rising, having increased by 1 per cent to 3.3 billion tonnes in 2025, and preliminary figures for the first few months of 2026 confirm this upward trend.

Admittedly, the success achieved in the past has been remarkable, as emissions were cut by 38 per cent between 1990 and 2024; however, the scope for improvement in the early years has now been exhausted, as it was linked to the ailing industry in Eastern Europe. What matters is that the 55 per cent target for 2030 – hence the ‘Fit for 55’ slogan – remains a long way off, with just three years to go until the deadline.

Paradoxically, on 12 February 2026, the European Parliament approved the Commission’s proposal to increase the reduction to 90 per cent, with a few token concessions passed off as significant concessions.

The Parliament’s latest proposals of 15 September change nothing; in fact, CO₂ prices have risen.Politicians are avoiding tackling the crises and are even reinforcing targets which, to be met, would require ETS prices not of 85 euros, but of 200 euros. It is clear that there is a disconnect from reality, but it has reached levels that are alarming for the stability of our democracies.

Certain concessions are being made, starting with the Carbon Border Adjustment Mechanism (CBAM), a complex system designed to ensure that goods entering Europe bear the cost of CO₂ that they do not pay for in their own countries. How can this not be called a tariff?

And like all tariffs, it goes against the rules of free trade that Europe so loudly champions and ends up driving up prices. Another bit of a helping hand comes from the possibility of increasing debt, such as the recent granting to Italia of a 14 billion budget deviation to be used over two years. However, this spending must be directed exclusively towards reducing fossil fuel consumption, and certainly not towards supporting domestic gas production or keeping coal-fired power stations open. This is in line with the energy policy of recent decades, as confirmed in the RepowerEU plan of May 2022 and the 2020 Recovery and Resilience Plan (PNRR) of 2020, both of which are generous funding instruments, but ones that oppose fossil fuels – the very ones that are in short supply today and are driving up energy bills.

The result is clear: the EU’s energy dependence has risen over the last 10 years from 55 per cent to 57 per cent, leaving us vulnerable to international crises. European policy is focused on renewables, electrification and decarbonisation – a dangerous rush forward, precisely because of the stability of the world’s most prestigious democracy.