Berlusconi lobbies to loosen Italy's carbon cap

The European Commission has suffered a further attempt to undermine its authority as regulator of the EU emissions trading system (ETS), after Italian Prime Minister Silvio Berlusconi asked president José Manuel Barroso in a letter to renegotiate Italy's CO2 emission caps.

Under the ETS, governments must set national limits on the amount of carbon they can emit for the period from 2008 to 2012, which the Commission then approves.

To date the Commission has only approved the limits proposed by Denmark, France, Slovenia and the UK, and issued tougher caps for the 23 other EU countries. But earlier this week, a European court upheld an appeal from Poland and Estonia that the Commission did not have the authority to impose tougher caps on the countries.

Six other countries – Bulgaria, Romania, Hungary, Czech Republic, Lithuania and Latvia - have appealed in a similar fashion and are expected to win their cases now a precedent has been set, although the Commission is currently considering whether to appeal the decision.

Italy originally accepted its revised cap from the Commission, but has now attempted to join those nations looking for their emissions caps to be loosened.

An Italian official was quoted on Reuters as saying: "The cap assigned to Italy was excessively low and we have difficulty meeting it as our industry is already very efficient, especially our power generation system."

He also argued that the decision to allow Poland and Estonia to renegotiate set a precedent for other countries. "[Berlusconi's] letter was meant to raise a problem that has also become evident in the European court... decision on Poland and Estonia's caps," he said.

A commission spokeswoman played down the chances of a compromise deal with Italy, arguing that without an official appeal "caps are not negotiable".

The Italian government has subsequently sought to play down the issue. Paolo Bonaiuti, undersecretary of the Italian Cabinet Office, told news agency AGI that the prime minister was not actively lobbying for a relaxation of Italy's caps.

The government "never asked the president of the European Commission, Mr Barroso, to renegotiate the reduction quotas for CO2 emissions," he said. "We simply presented Mr Barroso with the problem, asking for his personal involvement, to reach a shared solution."