Commentary Czechia and Italy are leading the charge against EU carbon pricing, derailing last week’s EU leaders’ summit. But their resistance runs deeper than politics: Czech lignite dependence and Italian gas interests shape each position. Yet both countries also host thriving clean-tech industries, such as heat pumps, that remain underrepresented in national debates. Ahead of the European Commission’s post-2030 climate proposal, amplifying these voices could offer a path to compromise. A commentary by Emil Sondaj Hansen and Emmanuel Molding Nielsen (Think Tank Europa), Davide Panzeri (ECCO Climate) and Tomáš Jungwirth Brezovsky (Association for International Affairs).

During the EU leaders’ summit last week, planned EU budget discussions were derailed by gruelling debates over EU carbon-pricing. This follows a joint letter by Czechia’s Andrej Babiš and Italy’s Giorgia Meloni in late September who proposed further changes and delays to the EU’s carbon pricing instruments, ETS1 and ETS2.

This is not the first time a Czech-Italian alliance has contested the EU’s green agenda. Think Tank Europa’s Fit for 55 Tracker shows that Czechia and Italy have contested six files and jointly challenged four of them. Rome and Prague often move first, paving the way for others to join: for example, in December 2025, when Babiš said he would seek allies to scrap ETS2 altogether.

Before the end of this year, the European Commission is expected to present its post-2030 framework for meeting the EU’s 2040 target, a process already begun with its ETS revision proposal. Several Member States, including Italy and Czechia, see this as an opportunity to scale back ambition. As the debate becomes more polarised, understanding what drives each side is crucial.

ETS scepticism pre-dates current Czech and Italian governments

In both countries, opposition predates Meloni and Babiš. Under Mario Draghi, Italy’s minister of ecological transition warned of the social cost of the green shift, while former Czech Prime Minister Petr Fiala pushed to soften ETS2.

While governing Czech politicians have in the past warned that “green blood will run”, Czech resistance rests on more than rhetoric. Although the Czech Council Presidency helped conclude the Fit for 55 negotiations in 2022, Fiala and Babiš have since traded blame over who endorsed the European Green Deal. The first flashpoint to shape the Czech debate was as cultural as it was economic: the 2035 ICE sales ban, which was viewed as a threat to a cherished way of life and a pillar of the Czech economy. Czechia joined Germany, Italy and other Central European states to successfully challenge it. ETS2 followed: with lignite supplying around a third of both power and heat, the spectre of ETS-induced energy price hikes looms large, while Czechia’s small share of the Social Climate Fund offers little compensation.

In Italy, it is all about gas

Italy’s resistance is largely explained by gas, which is more entwined with its economy than elsewhere in Europe. Italy’s fiscal framework, budget, and industrial competitiveness all rely on it. Successive Italian governments have argued that the transition must happen, but slowly, with gas playing a role for years to come.

Indeed, Italy also never fully unbundled former state-owned energy companies such as ENI and Enel, where the state holds shares and helps choose the CEO. Italy’s positions are thus hard to separate from these companies’ strategies, which, as the Made in Italy 2030 industrial strategy confirms, give gas and oil a significant long-term role.

As a result, parts of Italian industry that develop clean technologies, such as heat pumps, or have decarbonised their production, like steel, are peripheral to the government’s planning. The government instead focuses on preserving gas dominance rather than helping firms move away from it.

At times, incumbent energy interests even prevail to the detriment of other parts of Italian industry. For example, Italy and Czechia’s joint bid to lower the ETS prices is likely to favour Czechia’s coal-reliant power system over Italy’s gas-powered system, widening the energy price gap and putting Italian enterprises at a competitive disadvantage.

Ahead of new climate architecture proposal, Member States must look for common ground

While political point scoring certainly shaped Italy and Czechia’s push to soften the impact of EU carbon pricing at the EU leaders’ summit, important economic interests are also at play.

Understanding the nuances of these interests is key to charting a way forward. For example, both Czechia and Italy have strong heat pump industries, which stand to gain from the green transition. Indeed, almost a quarter of Czech exports are in clean tech. Giving more room to these economic players that are currently underrepresented in the Czech and Italian national debate is one way forward if the EU is to find a viable compromise on the EU’s post-2030 climate architecture.

The views and opinions in this article do not necessarily reflect those of the Heinrich-Böll-Stiftung European Union | Global Dialogue.

 

 

The Authors
Emil Sondaj Hansen has a BA and MPhil in International Relations at the University of Cambridge and was a Crown Prince Frederik Fellow at the Harvard Kennedy School. He was previously responsible for climate and energy policy at the Royal Danish Embassy in Berlin and has worked for the French think tank, Institute for Climate Economics He speaks English, Danish and German.

Emmanuel Molding Nielsen has an MA in European Political and Governance Studies from the College of Europe in Bruges and a BSc in Social Anthropology from the London School of Economics and Political Science (LSE). He previously worked at RAND Europe, a not-for-profit think tank working to improve policymaking through evidence-based research.

Davide Panzeri leads ECCO’s European programme and is the liaison with ECCO’s European networks. A journalism graduate, before joining ECCO Davide was a UK Government Civil Servant working on European decarbonisation policies with a particular focus on energy security, coal policy, carbon pricing as well as climate change diplomacy, during a secondment to the European External Action Service in Brussels.

Tomáš Jungwirth Březovský graduated from law at Charles University in Prague, and then went on to study Human Rights and Democratization in Sarajevo and Bologna. He was later awarded a fellowship at the European University Institute in Florence where he dealt with climate mitigation and adaptation in a transnational context. In the past, Tomáš worked as a policy officer in a network of CSOs, as a political analyst, manager of election campaigns or as a high-school teacher. In the course of the Czech EU Council Presidency he collaborated in expert capacity with the Czech Environment Ministry. He is a member of the Czech Pirate Party and a member of the scientific council of the Czech environment minister.