Meloni and Gualtieri reach an agreement on the waste-to-energy plant

Rome. Under the ETS reform proposed by the European Commission, waste-to-energy plants will be required to purchase emission allowances. However, numerous limits, phased implementation and exemptions are provided for, which largely neutralise the unsustainable rigidity of Brussels’ original initiative. The underestimated aspect of this turning point is that it is an Italian success. What is more: a cross-party success – a rarity in times of political polarisation – stemming from the convergence between the government and a section of the centre-left. In particular, local councillors. More specifically, the Mayor of Rome, Roberto Gualtieri.

The Commission would have liked to bring waste-to-energy plants under the ETS. This would have entailed a total cost for Italy of around 350 million euros (Utilitalia estimate), corresponding to an increase in the waste disposal tariff of 45 euros per tonne, compared with the current level of 80–120 euros. There are two risks: placing a financial burden on existing plants and derailing the business plans of those under construction. There are three such plants in Italy: the one in Rome, which is the most advanced, and two in Sicily, in Palermo and Catania.

For the government, which has been locked in a long-running dispute with Brussels over the ETS, this was an unacceptable proposal. It would have been too detrimental to our country, as waste-to-energy is the natural destination for unsorted waste in a context that is generally commendable in terms of recycling. Furthermore, forcing waste-to-energy plants to pay the ETS, without imposing the same obligation on landfill sites, would effectively have incentivised the latter, whilst also conflicting with the other European objective of reducing landfill disposal to below 10 per cent. According to ISPRA, landfill sites are responsible for around three-quarters of emissions from the waste sector (mainly methane), compared with 1 per cent from waste-to-energy plants. For this reason, the Ministry of the Environment – responsible for the dossier – fought to exclude them from the reform, alongside Greece, Portugal and other Eastern European countries. On the other side were the Nordic countries, in favour of extending the ETS not only for general political reasons, but also for an unspoken interest: given their vast waste-to-energy capacity, blocking new plants in southern Europe means preserving the substantial flows of waste (and money) from south to north.

And this is where Gualtieri comes in. The Mayor of Rome has taken steps to encourage European mayors to take a stand, sending a letter to the Commission alongside his counterparts in Barcelona, Dublin, Lisbon, Paris, Vienna and Warsaw. As well as emphasising the implicit benefit that would have been recognised for the landfill site, the mayors complained about the impact on local authority budgets. “Unlike other sectors,” the letter states, “the revenue generated by the ETS cannot be used to support zero-emission alternatives, as a portion of the dry residue is, in any case, non-compressible. Conversely, the construction of waste-to-energy plants in countries heavily reliant on landfill sites would enable the production of electricity and heat, thereby reducing costs for businesses and households.” Among the commissioners to whom the letter was addressed were, alongside Ribera and Hoekstra, Raffaele Fitto.

The requests have not fallen on deaf ears. The Commission has reached a difficult compromise, which accommodates the Italian position by postponing the final showdown. Meanwhile, the implementation of the new mechanism has been postponed from 2028 to 2031. Furthermore, a phased approach is envisaged: allowances will initially have to cover 25 per cent of emissions generated, rising to 100 per cent only in 2034. However, free allowances will be granted for district heating: according to Antonio Massarutto, this could be worth around 4–5 euros per tonne, approximately 10 per cent of the gross cost of the ETS. Similarly, concessions are provided for the capture, storage or utilisation of CO₂. Finally, there is the option to postpone the deadline until 2036 for countries that meet at least two out of three conditions: an equivalent national carbon tax (already in place in many Nordic countries), the achievement of EU recycling targets (65 per cent; Italy is just over 52 per cent) and a reduction in landfill disposal (maximum 10 per cent; Italy stands at around 15 per cent). These last two targets are considered within Italy’s reach, and in both cases they would receive a decisive boost precisely from the new waste-to-energy plants. Moreover, the exemption overcomes one of the strongest criticisms levelled at the construction of the Rome waste-to-energy plant, which was precisely its financial unsustainability due to the ETS. This risk has been averted.

Our country would certainly have preferred – and with very good reason – to avoid the introduction of this obligation. But it is a success that we have nevertheless secured far-reaching changes and a postponement until 2036. This would not have been possible without a convergence of views between Giorgia Meloni’s team, the mayors’ party led by the Democrat Gualtieri, and Commissioner Fitto in Brussels. The institutional process has worked.