Italy’s plans to kick its Russian gas habit run into local resistance

Buongiorno, welcome to Europe Express summer edition, coming to you every Wednesday through the month of August.

I’m Amy Kazmin, the Financial Times Rome correspondent, covering Italy’s politics, economy, foreign policy and other topics — from social issues to environmental challenges.

I write now from a city that is eerily quiet, after much of the population has decamped to the sea, the mountains and other favourite holiday destinations. Many shops — and our favourite pizzeria — are closed for long holidays, with handwritten window signs announcing they’ll reopen in a few weeks.

But as Italians enjoy summer breaks, clouds loom on the horizon concerning what autumn and winter will bring — especially for Italy’s energy security, and Italy’s broader foreign policy orientation — after the collapse of prime minister Mario Draghi’s government.

For indications of how the winds are blowing, many are focusing on the Tuscan port of Piombino, site of a planned new floating regasification plant for LNG imports.

Since the invasion of Ukraine, Draghi’s government has made determined efforts to wean Italy off the Russian gas that previously accounted for 40 per cent of its consumption. These have started to pay off: recently, just 25 per cent of Italy’s gas came from Russia, as imports from Algeria rose.

Before resigning last month, Draghi criticised Italy’s previous “unacceptable energy dependence on Russia”, which he called the result of “decades of short-sighted and dangerous choices”. His government has aimed to “eliminate” Russian gas imports within a year and a half.

But plans for the floating regasification plant in Piombino — critical to that strategy — have met fierce local resistance, raising questions over whether it will start working by spring, as Rome hoped.

How this drama plays out could be an early indicator of whether the Italian government formed after the September 25 snap election considers kicking Italy’s Russian gas habit as urgent a priority as does Draghi’s.

 “There is an animated opposition,” Stefano Venier, chief executive of energy company Snam, which runs Italy’s gas transport and storage network, told analysts recently. “I think and I hope that the, let’s say, general interest, national interest will finally prevail.”

Snam, which is 33 per cent government-owned, in early June acquired a $350mn floating regasification plant, with storage capacity of 170,000 cubic metres of LNG and a continuous regasification capacity of 5bn cubic metres a year — equivalent to around 6.5 per cent of Italy’s natural gas needs.

The plant, one of three regasification units Italy has planned, would allow Italy to import LNG from anywhere in the world, without pipelines.

Rome now plans for the giant regasifier to be docked for three years in the deepwater harbour of Piombino, an industrial town located a few kilometres from Italy’s main gas pipeline network. The government has used emergency powers to bypass what would normally be a years-long approval process for such a project.

But the choice of Piombino — the site of a huge steel factory that closed back in 2014 — has triggered outrage from the town’s citizens and politicians. Protests have been joined by the local leaders of Brothers of Italy, and the League — the two rightwing parties whose electoral alliance, with Silvio Berlusconi’s Forza Italia, is expected to emerge as the biggest bloc in the next parliament.

Parliament member Manfredi Potenti, whose party is the League and whose constituency includes Piombino, told the FT that residents, still bitter at the steel plant’s closure, feel the giant facility will disrupt new business activities now developing in the harbour — from fish farming to a marina with ferries to popular tourist islands.

“The citizens of Piombino see this new presence as violence against their territoriality,” Potenti said.

At the national level, Potenti said the League recognises the facility as important for Italy’s energy security and appreciates that Piombino is the most strategic location.

But he said that “our sensibility is to listen to the people of the territories” and that Italy had to find a way to balance the national interest with local concerns, and to reduce the project’s negative impact on the community.

“We do not want to ask more sacrifices of the people of Piombino,” Potenti said.

What that means in real terms, though, for the project’s timeline probably won’t be clear for some time.

Even Snam’s Venier has admitted that he is uncertain, despite the terminal’s importance in preparing Italy’s energy supplies for the winter of 2023. “We are working desperately to respect the deadline . . . unless there is something that stops us, we will go ahead,” he told analysts.

But he said it would be up to the government to take a final call. “Probably it’s a bit early to say whether we will be consistent with the timeline . . . with the timing we have set,” he said. “We hope for the best and will be prepared for the worse.”

Chart du jour: Heady debt

Italy paid its highest rate to borrow last month since the eurozone debt crisis. Read more about how the European Central Bank is stabilising markets.

Notable, Quotable

Visiting Europe is a privilege, not a human right

• European breaks: Finland and Estonia have called on the EU to stop Russian tourists from acquiring short-term visas to the Schengen area. It could be yet another way to place sanctions on the country but debate over its legality (and fairness) for ordinary Russians is heated.

• Watergate in Athens: Greek prime minister Kyriakos Mitsotakis was forced to make an embarrassing television address on Monday to clarify that he knew nothing of the phone tapping of a rival party leader. Clarify he did not, however, with the statement failing to shut down questions on press freedom, corruption and state surveillance.