Italy keeps foot on gas as it calls for early end to coal

ROME/MILAN (Reuters) — Italy is looking to phase out all coal power plant production by 2025 and boost the role of renewable energy as it seeks to reduce its carbon footprint, the government said on Friday.

Laying out its roadmap for energy policy, Rome said the aim was for green energy sources to account for 28% of overall energy consumption by 2030 from 17.5% in 2015.

In particular it said it wanted renewable sources to make up 21% of energy consumption in the transport sector, from 6.4% in 2015.

Italy is also aiming to introduce more electric and hybrid vehicles. Industry minister Carlo Calenda, presenting the government's framework document, said one idea being considered was to use power bills to help fund electric car incentives.

But Rome said gas would continue to have a key role in the country's energy future. It said it would promote new gas import pipelines to diversify supply, including the TAP pipeline to Azerbaijan and the EastMed pipeline that will import gas from the Mediterranean.

The document made no mention of encouraging new LNG facilities but said current capacity would be awarded by auction and not on a fixed tariff basis.

Italy imports about 90% of its gas needs, much of it from Russia.

On Thursday, the head of Italy's biggest utility Enel said the strategy needed to give a greater role to green energy to wean the country off its reliance on gas.

Last week Enel and other top utilities called the European Union's green energy targets unambitious, urging the bar to be raised in the fight against climate change.

Calenda said the early retirement of around 8,000 megawatts of coal power capacity would cost some 3.8–4.0 B euros while the overall energy plan could generate investments of 175 B euros ($204 B) to 2030.

Besides exiting coal, Rome also intends to cut its use of petrol products by 13 MMt of oil equivalent by 2030 and boost energy efficiency by 30%.

Italy, which imported 76% of its overall energy needs in 2015, aims to cut that level to 64% by 2030.

Reporting by Stephen Jewkes and Massimiliano Di Giorgio; Editing by Isla Binnie and Elaine Hardcastle

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