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Energy transition comes with huge price tag -Italy business leader

Economic Indicators2 hours ago (Sep 23, 2021 01:40PM ET)

(C) Reuters. FILE PHOTO: Wind turbines are seen along a street near Lamezia Terme, Italy, January 13, 2021. REUTERS/Yara Nardi/File Photo

By Giuseppe Fonte

ROME (Reuters) -Energy transition in Italy could cost more than 650 billion euros ($760 billion) over the next decade and the government must do more to help businesses bear the cost, the head of the employers’ federation said on Thursday.

“The national recovery plan provides only 6% of the investment needed for the transition. Almost 94% has to be covered by companies,” Confindustria President Carlo Bonomi told the group’s annual assembly.

Bonomi said he expected Italy’s economy to grow by 6% this year after the deep recession caused by the coronavirus pandemic, but warned the increase in prices of gas and commodities — especially metals — could slow the global economic recovery.

“We have to be serious in facing the problems that have fallen on international markets,” he said.

Bonomi said the real challenge for Italy would be to maintain strong growth in the coming years, taking full advantage of around 200 billion euros coming from a European Union recovery fund.

“The real point is not the rebound of this year, but the growth rate from 2022 onwards, which must be solid and durable,” he added.

AUTOMOTIVE INDUSTRY UNDER PRESSURE

Speaking about different sectors, Bonomi highlighted the risks for the Italian automotive industry that could arise from the EU’s “Fit-For-55” climate plan, which aims to reach a collective goal of reducing net greenhouse gas emissions by 55% from 1990 levels by 2030.

“Thousands of small and very small companies supplying mechanical components, frame and chassis parts, are facing the transition without adequate support for investments,” Bonomi said, adding this could cause both closures and the transfer of parts of the manufacturing sector to countries with lower production costs and more advanced technologies.

Auto sector experts believe Italy could be hit harder than auto sectors in other countries due to the magnitude of investments and the speed of change needed to comply with EU “Fit-For-55” rules on electric cars and C02 emissions.

The EU energy transition plan “has imposed an unnatural acceleration on the Italian car sector soon after the pandemic,” said Dario Duse, auto expert for consultancy firm AlixPartners, at a conference in Milan.

($1 = 0.8530 euros)

Energy transition comes with huge price tag -Italy business leader

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