Energy

What is the European Union Emissions Trading System (ETS) and why Italia is calling for its suspension

"The so-called Ets," Meloni explained in the Senate, "is a system that needs revision

by Rome Editorial Staff

12 March 2026

2' min read

Translated by AI

Versione italiana

Key points

European Union Emissions Trading System
Cap
The pre-war system in Ukraine
Meloni: 'The price of electricity is artificially inflated'
Von der Leyen: "Ets to be modernised"

2' min read

Translated by AI

Versione italiana

"We must suspend the Ets". This is what the ministers say, in particular those of Energy Pichetto Fratin and Enterprise Urso, and now Prime Minister Giorgia Meloni also reiterates it. A request to be considered immediately, according to the premier, given the flare-up in energy prices triggered by the conflict in Iran.

"At the European level," he said during his communications to the Senate, "we are asking, pending the announced review, to urgently suspend the application of Ets to the production of electricity from thermal sources, i.e. from thermoelectricity. But what is meant by Ets?

European Union Emissions Trading System

Ets is an acronym for European Union Emissions Trading System, which consists of a CO2 emissions trading mechanism that aims to reduce emissions by imposing higher costs on industries that produce more.

The ceiling

The system works by setting a cap on the amount of CO2 allowed that is reduced each year, forcing companies to pollute less or buy permits from those who are more efficient. All EU countries participate in the system along with Iceland, Liechtenstein and Norway.

The pre-war system in Ukraine

The money collected from the auctions of these allowances, which have exceeded $175 billion since 2013, is used by governments to finance solar panels, energy savings and new clean technologies. But the Ets mechanism was conceived before the energy crisis that erupted with the war in Ukraine and did not consider this kind of situation, which radically changed the overall picture.

Meloni: 'The price of electricity is artificially inflated'

"The so-called Ets - explained Meloni - is a system that needs to be revised to correct a series of mechanisms that today, in a significant number of member states, including Italia, artificially inflate the price of electricity, with peaks that, for our country, reach 30 euros per MwH, a quarter of the entire cost of electricity.

Energia, Meloni contro ETS: "Ue sospenda meccanismo controproducente"

Von der Leyen: 'Ets to be modernised'

At the same time, the President of the European Commission, Ursula von der Leyen, also spoke on the subject. In the European Union 'we need Ets, but we have to modernise them', she told the European Parliament in her speech ahead of next week's EU Council. Von der Leyen hoped that the debate on the topic would also continue at the level of the EU Parliament.