Avs’s ‘social bill’ is an incentive for fossil fuels

The Green-Left Alliance began this parliamentary term in opposition, calling for the abolition of environmentally harmful subsidies (SAD), but is now standing for government in the next election whilst proposing to increase them. On Sunday, during an event in Rome, the coalition led by Nicola Fratoianni (Italian Left) and Angelo Bonelli (Green Europe) presented its manifesto, which had been voted on by its supporters online.

The most disruptive initiative, at least from a media perspective, was launched by Bonelli: “We are proposing a ‘social energy bill’,” announced the Greens’ spokesperson with solemn gravitas. What is it? An ‘energy credit’ for households with an ISEE of up to 30,000 euros, equivalent to ‘2,000 kilowatt-hours, to be provided free of charge, to ensure people do not have to go without heating, do not have to forgo their right to fresh air, and have access to a common good such as energy’. Bonelli also clarified that the rationale behind the measure is “not to interfere with price formation”, but to introduce “an energy credit”.

To understand the proposal, one must first identify who the beneficiaries are, then determine the cost, and finally establish who will bear it. According to the latest data available from INPS, there were approximately 9.3 million Single Substitute Declarations (DSU) with an ISEE below 30,000 euros out of a total of around 11 million (84 per cent of the total). According to the AVS proposal, therefore, the state will provide over four in five households that have submitted a DSU with 2,000 kWh of electricity to be deducted from their bill – a quantity slightly higher than the average annual consumption (according to ARERA data, the average annual consumption in 2025 was 1,922 kWh). In practice, the vast majority of consumers will not pay for their electricity.

But how much money is needed? We can take the price for ‘Maggior Tutela’ customers as a reference, which, as of 1 October, stands at 43.43 euro cents per kWh. Using a conservative estimate—and therefore excluding from Bonelli’s proposal the costs of transmission, meter management and taxes (which would remain the user’s responsibility)—the cost of the energy itself is approximately 30 cents per kWh (27.64 cents for energy supply and 2.11 cents for distribution). Multiplying this by the 2,000 kWh of ‘energy credit’ indicated by AVS gives approximately 600 euros per year for each household; multiplying this figure by the 9.3 million households with an ISEE below 30,000 euros gives a total of approximately 5.6 billion. As we mentioned, this is a conservative estimate, not least because it assumes the number of DSUs remains unchanged; in reality, however, this figure has practically doubled between 2016 and 2025, rising from 6 to 11 million, precisely because over the last decade an increasing number of welfare benefits have been indexed to the ISEE value: it is reasonable to assume that, with a bonus of around 600 euros, additional households that had not previously felt the need to do so will submit a DSU. It is unclear who will foot the bill for these 5.5 billion in energy expenditure, as Bonelli has not specified the sources of funding.

In any case, it is Avs’s voters who should be most concerned about such a measure. Not only as taxpayers, but above all as committed environmentalists. Because the ‘social bill’ – perhaps they haven’t realised – is in stark contradiction with one of the fundamental environmental principles of the Fratoianni-Bonelli duo: the abolition of environmentally harmful subsidies (Sad). This was an objective set out in the 2022 election manifesto and which, in 2023, AVS included in its proposal for a ‘Framework Law on Climate in Italy’; Article 14 of this provided precisely that environmentally harmful fiscal expenditure included in the Ministry of the Environment’s Catalogue of Environmentally Harmful Subsidies (MASE) be “progressively reduced by at least 10 per cent annually until such subsidies are abolished by 2030”. The same objective was subsequently reiterated in the programme for the 2024 European elections: “To phase out the SADs gradually, with a view to abolishing them completely by 2030”.

In the Mase Catalogue, ‘Sad’ refers to all direct transfers, subsidised loans and incentives that encourage consumption or production choices which have a negative impact on the environment. A prime example is the reduced VAT rate of 10 per cent (instead of 22 per cent) on electricity for domestic use, which – just like Bonelli’s ‘social bill’ – has the social aim of reducing the proportion of household expenditure spent on electricity. However, as reducing the cost of electricity encourages the consumption of energy produced from fossil fuels, it is a Sad. One of the most costly, moreover, amounting to 1.8 billion. By the same logic, the Catalogue of Fossil Fuel Subsidies also includes the exemption from excise duty on electricity used for domestic purposes with a power rating of 3 kW and monthly consumption of up to 150 kWh (cost: 530 million). Both these subsidies are considered harmful to the environment because, by reducing the price signal, they encourage energy consumption and thus emissions. Moreover, these incentives carry a much lower cost than the ‘social bill’ proposed by Bonelli. Another surreal aspect is that, after the Meloni government abolished the most costly existing environmentally harmful subsidy – namely, the difference in excise duty between petrol and diesel (worth 2.5 billion) – the environmentalists at AVS are now positioning themselves to replace it by proposing the introduction of a new environmentally harmful subsidy worth 5.5 billion.

Bonelli and Fratoianni used to say they wanted to phase out the SADs; now they are calling for votes to gradually double them.