The Iran war is going to impact chemical production through an increase of energy costs, up to 23% of the value of production, said the President of Italian chemical association Federchimica, Francesco Buzzella. Italy is the third largest chemical producer in Europe.
The chemical sector has suffered competition from the USA and Asian producers already in the past years, due to energy costs and climate tax. The ETS (Emission Trading System) of the EU costs 600 million Euro per year to Italian producers. Similar figures are given for Germany (480 million) and France (600 million)—whereas lower German figures—despite a larger chemical sector—are explained by state compensations allowed by EU complex benchmark calculations.
The ETS is a real tax. Revenue from the EU ETS is supposed to be invested in so-called decarbonization, but a study by ECCO think-tank found that only 9% of the approximately 18 billion euros in revenue in Italy is actually being used for that purpose . This means that 91% of the revenue goes into the government budget, possibly debt service.