Italy will halt new concessions for oil and condensate exploration and production, according to a draft of a new government decree reviewed by Reuters. This decree specifies that the ban will only affect new concessions, not those already approved by the government.
This decision aligns with Italy’s environmental goals, which include phasing out coal-fired electricity by the end of 2025 and replacing it with gas-fired power plants. Recently, Italy approved four new gas-fired plants, which will generate a total of 3,400 MW. Upgrades to existing plants are expected to add another 700 MW by 2026 as Italy aims to eliminate its reliance on Russian natural gas.
Oil exploration and production in Italy are regulated by state legislation, with the government receiving a 10% royalty for onshore production and 7% for offshore. Operators do not hold titles to exploration or production areas.
In parallel, Italy’s Central Bank is advocating for developed economies with high per-capita emissions to support developing nations in transitioning away from fossil fuels. This initiative, proposed by Bank Governor Fabio Panetta at the G7 – IEA Ensuring an Orderly Energy Transition conference in Rome, aims to lower the global cost of energy transition.
However, last week, Italy’s power utility Enel decided to withdraw from Vietnam’s wind and solar markets. The company cited challenges related to Vietnam’s complex grid connection mechanisms as a key factor in its decision to exit the country’s energy transition efforts.