The European energy crisis of 2021–2023, exacerbated by geopolitical tensions and supply-chain disruptions, has created unprecedented pressure on industrial competitiveness across the EU. For Italy, the impact has been particularly acute: electricity and gas prices have risen to levels 60–80% above the pre-pandemic five-year average, significantly eroding profit margins in chemicals, metals, ceramics, and paper production.
Context & Methodology
Our methodology combines administrative microdata on firm-level energy costs, sectoral input-output analysis, and comparative econometric modelling of policy instruments deployed by peer economies. We assess three policy pathways through 2030 using a computable general equilibrium framework calibrated to post-pandemic Italian input-output tables.
Energy Prices in Europe
Wholesale electricity and gas markets across Europe have exhibited divergent price trajectories since 2022, reflecting variation in generation capacity, storage infrastructure, and regional policy responses.
Impact on Italian Industry
Italy's energy-intensive sectors employ approximately 280,000 workers and generated €68 billion in annual value-added pre-crisis. Elevated energy costs have triggered a visible shift in competitive positioning, with output declining 7–13% in chemicals, 5–9% in non-metallic minerals, and 4–7% in base metals relative to 2019 baselines.
"Without decisive policy intervention coupled to sectoral transition investment, Italy faces a permanent shrinkage of its energy-intensive industrial base."
Policy Benchmarking
Comparative analysis of measures adopted by France, Germany, Spain, and Poland reveals a spectrum of approaches ranging from short-term demand-side relief to supply-side investment and sectoral transition support. Germany's mixed model — combining time-limited price support with accelerated renewable capacity deployment — appears most aligned with medium-term competitiveness objectives.
Scenarios 2026–2030
Three scenarios are modelled through 2030: continued price support only (−4% sectoral output by 2030), combined subsidies and investment incentives (+2%), and an aggressive transition pathway (+8%).
Recommendations
- Adopt a sectoral transition framework combining immediate relief with accelerated green capex support
- Double renewable generation capacity by 2030 through accelerated permitting and grid investment
- Strengthen EU-level coordination on harmonised energy cost relief
- Establish inter-ministerial foresight and monitoring mechanisms