Italy expects EU carbon price of 80 euros per tonne this year

[ROME] Italy expects the price of permits on the European Union's carbon market to average around 80 euros (S$123) per tonne this year compared to 69 euros in the fourth quarter of 2021, a document presented to parliament and seen by Reuters showed.

The price, if confirmed, would allow Rome to raise almost 600 million euros of additional resources to curb rising energy bills and offer relief to households and businesses.

The government has so far budgeted around 2.8 billion euros of proceeds from carbon permit auctions, part of which will go to cut system-cost levies weighing on firms.

But in the document the Treasury now estimates it can raise 3.36 billion euros this year based on a "reliable and conservative estimate" of 80 euros per tonne for EU CO2 prices.

The document said an average price of 89 euros per tonne, based on the "historical peak observed last December", would raise 3.73 billion euros while 69 euros per tonne would yield 2.9 billion euros.

In all three scenarios, Rome assumes an estimate of 42 million CO2 allowances.

The government has allocated some 10 billion euros since July to cushion sharp rises in energy bills, but ruling parties are urging Prime Minister Mario Draghi to introduce a new extra borrowing package to help families and firms.

The ruling right-wing League party has called for a deficit-hike worth at least 30 billion euros while the Treasury, keen to reduce the budget deficit this year to 5.6 per cent of national output from 9.4 per cent in 2021, is resisting pressure. REUTERS