Confindustria, the powerful Italian employers' federation, is calling for a unified European industrial strategy as escalating energy costs and geopolitical instability threaten to push manufacturers out of the continent. The organization warns that Italy's Emilia-Romagna region alone could lose 40,000 jobs by 2030 under current conditions.
Emanuele Orsini, who leads the organization representing Italy's industrial backbone, has positioned energy pricing as the single most urgent threat to Italian competitiveness. With Italian manufacturers paying €160-170 per megawatt-hour compared to Spain's €40, the federation argues that survival depends on immediate action from both Rome and Brussels. The country's industrial sector—which underpins 83% of Italy's welfare system—faces what Orsini describes as an "economic emergency" requiring urgent policy response.
Why This Matters for Italian Residents
• Energy cost burden: According to Confindustria, Italian businesses could face up to €21 billion in additional energy expenses through the end of 2026 if Middle East conflicts persist, potentially raising prices for consumer goods.
• Jobs at risk: The federation warns that 40,000 jobs in Emilia-Romagna specifically face pressure, with manufacturing employment challenges emerging across industrial districts.
• Supply chain vulnerabilities: One million industrial jobs have already been lost across Europe due to competitive pressures and rising input costs, according to federation estimates.
• Regional vulnerability: Manufacturing represents a critical economic pillar for central and northern Italy, particularly in regions like Emilia-Romagna, Veneto, and Lombardy.
The Energy Crisis and Global Supply Concerns
Confindustria's alarm centers on the Strait of Hormuz, through which 20% of global oil flows. The federation warns that reduced maritime traffic and persistent Middle East instability have kept Brent crude above $105 per barrel as of April 2025, intensifying pressure on manufacturing supply chains. The organization estimates that geopolitical tensions could restrict access to affordable energy for months or longer.
For Italy, this represents a structural vulnerability that persists as long as global energy markets remain volatile. The federation argues that prolonged conflicts would raise costs and restrict access to credit precisely when manufacturers need liquidity to navigate the transition.
The Italian government has urged diplomatic solutions while preparing contingency plans. The geopolitical stakes are real: Italy's manufacturing competitiveness depends significantly on energy-intensive production processes that rely on relatively stable fuel pricing.
What Confindustria Demands from Europe
Orsini's message to Brussels is direct: the European Union must implement structural reforms to prevent deindustrialization. Following meetings with Italian cabinet ministers and European Commission representatives, the federation outlined key priorities.
First, a unified European energy market: Confindustria demands eliminating competitive distortions that currently penalize Italian manufacturers. The organization argues that Spanish factories operating with energy costs less than one-quarter of those facing Italian competitors creates an unsustainable imbalance within the single market.
Second, EU climate policy reform: The federation is requesting that the EU Emissions Trading System (ETS)—Europe's main carbon pricing mechanism, which charges companies for greenhouse gas emissions—be either suspended or reformed for manufacturing and energy-intensive sectors. According to Confindustria, the current system has become less effective at reducing emissions while imposing costs that disadvantage European producers. (The ETS charges polluters per ton of CO2 emitted, with prices rising annually.)
Third, raw material security: Confindustria wants to retain critical materials—particularly ferrous scrap (recycled iron and steel)—within European borders to maintain industrial competitiveness. With Chinese exports to Europe surging and European employment falling in manufacturing, the federation argues this is essential for survival.
However, environmental groups have argued that suspending or reforming the ETS would undermine Europe's climate commitments and could shift emissions rather than reduce them. The European Commission has not publicly endorsed suspending carbon pricing for industrial sectors. Government responses to Confindustria's demands remain cautious, with officials balancing industrial concerns against climate obligations.
Immediate Government Measures and Support Programs
For residents in Italy, the industrial federation's warnings translate into tangible economic concerns. Manufacturing supports not only direct employment but also the tax base that funds pensions, healthcare, and public services. Confindustria has identified specific measures for immediate government action:
• Budget adjustments providing proportional aid to energy-intensive businesses through December 2025
• Extension of fuel excise tax cuts to reduce transportation and heating costs
• Targeted support for energy-intensive sectors like chemicals, steel, paper, and glass
• Streamlined permitting for renewable energy installations—currently a bottleneck for investment
• A national "decreto bollette" (energy bill decree) to mitigate electricity and gas prices for industrial users
The Italian government has also introduced fiscal incentives for reshoring production, including a 50% reduction in corporate income tax (IRES/IRPEF—Italy's corporate and individual income taxes) and regional production tax (IRAP) for six tax periods beginning in 2024. However, these measures await European Commission authorization and depend on broader market conditions improving.
Recent surveys show 15-20% of Italian manufacturers have increased domestic sourcing, reflecting both risk management and efforts to reduce supply chain vulnerabilities. Companies are adopting force majeure clauses in contracts and integrated risk frameworks to navigate volatility.
Which Sectors Face the Steepest Challenges?
Manufacturing overall is expected to close 2026 in "substantial stability" at constant prices—essentially maintaining current output. However, specific industries face acute pressure:
• Energy-intensive manufacturers (chemicals, steel, paper, glass): Confront an existential cost squeeze given Italy's dependence on gas-fired electricity generation
• Export-oriented sectors (luxury goods, industrial machinery): Particularly exposed to Middle East market disruptions and reduced customer purchasing power
• Automotive supply chain and logistics: Struggle with fuel costs that undermine competitiveness
• Traditional sectors (textiles, fashion): Face pressure on the quality premium that justifies "Made in Italy" labeling
Economists remain divided on whether the energy differential truly threatens long-term viability, with some arguing that investments in renewable energy and efficiency could offset cost gaps over time.
Practical Implications for Italian Job-Seekers and Consumers
For those considering employment in manufacturing or worried about consumer prices:
Job market impact: Emilia-Romagna faces the most acute pressure, with Confindustria warning of potential job losses concentrated in energy-intensive sectors. However, government support programs and potential reshoring initiatives may offset some losses. Sectors like renewable energy installation and energy efficiency retrofitting may see job growth.
Consumer price effects: The €21 billion energy cost projection could incrementally raise prices for construction materials, consumer goods, and transportation. However, government subsidies on fuel and electricity may moderate retail price increases in 2025-2026.
Support mechanisms: The Italian government is developing targeted assistance for affected workers and businesses. Residents should monitor announcements from their regional labor offices regarding retraining programs and unemployment support.
The Strategic Choice Ahead
Confindustria's message is unambiguous: manufacturers want to remain in Italy and Europe, but they argue survival requires immediate structural reforms to energy markets, climate policy, and trade frameworks. The federation warns that without these changes, manufacturing will continue relocating to lower-cost regions.
The Italian government is navigating competing pressures: supporting industry while maintaining climate commitments, pursuing EU coordination while managing national concerns, and protecting jobs while respecting fiscal constraints.
For residents, the outcome of these negotiations will shape employment opportunities, consumer prices, and the tax base supporting public services for years to come. The decisions made in Rome and Brussels over the next 12-18 months will likely determine whether Italy's industrial heartland adapts or contracts.
