Italy and the Czech Republic will ask EU leaders at the Oct. 15-16 summit to delay the bloc's next emissions trading system, suspend new methane-monitoring obligations on fuel importers and reshape how the EU's carbon market absorbs surplus permits, according to the joint paper now being circulated in Rome and Prague.

Prime Ministers Giorgia Meloni and Andrej Babiš are spearheading the initiative, which frames its three-pronged ask as a response to higher energy costs and supply-security concerns across the bloc. The text targets the Market Stability Reserve, the 2028 launch of ETS2 and the Jan. 1, 2027 methane reporting regime covering imported oil, gas and coal.

What do Rome and Prague want from the carbon market?

The two governments want the European Commission to release more allowances into the Market Stability Reserve, the mechanism built to absorb surplus EU ETS permits and stabilize carbon prices. About 190.5 million allowances are scheduled to enter the reserve between September 2026 and August 2027, according to Commission figures cited in the proposal.

Italy and the Czech Republic are also calling for greater flexibility in how the allowances are distributed and for measures that would cut the cost of carbon in electricity generation. A separate, broader Commission proposal earlier this year has already moved to revise the EU carbon market to defend industrial competitiveness while keeping the bloc's climate targets intact.

How would an ETS2 delay change the timetable?

ETS2 extends carbon pricing to road transport, buildings and other sectors not covered by the existing EU ETS. EU institutions have already pushed back operations to 2028, with allowance auctions due to start in 2027. A further postponement would defer the first auction and the revenue streams earmarked for the €86.7 billion ($98 billion) Social Climate Fund, which runs from 2026 through 2032 to cushion vulnerable households against higher fuel and heating costs.

Supporters of the system argue carbon pricing can accelerate investment in cleaner transport and heating. The Italian and Czech governments counter that residential and transport users have not had the time to absorb the price signal while businesses absorb elevated energy bills.

Why target methane rules now?

Under the EU Methane Regulation, importers of oil, gas and coal must meet additional monitoring, reporting and verification requirements from Jan. 1, 2027. Italy and the Czech Republic want a temporary suspension, citing gas-supply reliability concerns and the administrative load on smaller importers.

The Commission has framed the methane framework as a tool to cut leaks across global fuel chains while preserving import security. Several member states have already asked for more time to implement the rules. The Italian-Czech paper argues the Jan. 1, 2027 effective date is incompatible with current market conditions, a position that pits the Rome-Prague axis against the Commission's stated supply-security rationale.

What changes if the paper lands?

For transport operators and building owners that would fall under ETS2, a delay would postpone compliance costs and reporting obligations now less than 18 months from activation. For importers of oil, gas and coal, a methane-rules freeze would remove monitoring and verification duties scheduled to take effect at the start of 2027.

The Commission's wider carbon-market revision this year already moved to support industrial competitiveness while preserving climate targets. Member states are now weighing how far to compress that timetable in light of the Italian-Czech intervention.

What happens next?

The Oct. 15-16 European Council meeting is the next fixed milestone. Leaders can endorse the joint text, request a Commission impact assessment or set a narrower negotiating remit. A Commission response on methane implementation is expected before year-end, while any ETS2 delay would require a co-legislative change to the timetable — a process measured in months rather than weeks.