Filippo Manuzzi, CEO of Ceramiche Sant'Agostino explains what the ETS, the emissions market, is. And because sustainability is increasingly at risk of uncontrolled and dangerous financial speculation

A beautiful thing, sustainability. Necessary, challenging, capable of inspiring completely new industrial visions. But the political and economic logic underlying international regulations have a very high cost for the industry, particularly for small and medium-sized enterprises, due to the Emission Trading Scheme, a sort of " emissions market.

How and why should the financial model of sustainability be revised? Filippo Manuzzi, CEO of Ceramic Sant'Agostino.

Let's start from the basics: what is the ETS?

Filippo Manuzzi: “The Emission Trading Scheme is an environmental policy instrument that has the objective of reducing greenhouse gas emissions, in particular CO2, in 'atmosphere.

The system is based on the emissions market: companies are assigned a limit of permitted emissions, expressed in credits. The emission credits can then be sold or purchased on the market, with the same mechanism as the stock exchanges.

Their value fluctuates not only depending on the obvious dynamics of supply and demand, but also according to speculative logic.

For the ceramic industry, the ETS has a significant impact. Despite the sector's commitment to adopting low energy impact processes, production will continue to have an impact on the environment for a few more years.

Nevertheless we are equipped with solar panels, water recycling systems and rational automation of logistics.

In addition to the progressive reduction of the thickness of the slabs and tiles and the constant recovery of waste, with savings in materials and a lower impact during transport operations.

The industrial sector in general, and the ceramic sector in particular, are achieving unimaginable and comforting results. But companies must still obtain sufficient emission credits to cover their production activities and comply with the limits established by the ETS".

The problem therefore is that the indices on the ETS list are linked to financial speculation, which could distort their market. How do you fix it?

Filippo Manuzzi: “It is true that the ETS list index is influenced by financial speculation. When financial speculation increases, the prices of emission credits can rise disproportionately compared to actual supply and demand. This can make it more difficult for ceramic companies to purchase the credits needed to continue their production.

This situationcompromises the competitiveness of the industry, in particular for small and medium-sized enterprises that have limited financial resources. It would be important for the relevant authorities to carefully monitor the market and take measures to prevent excessive distortions.

The Italian industrial anatomy is based on SMEs. They are the productive and innovative heart of Europe, not just Italy, with a competence in terms of quality and research that is difficult to observe in large international groups.

Protecting these realities from the speculative emissions market is important not only in economic terms, but to ensure Europe continues to be a globally competitive territory, in particular for its ability to willingly embrace the green transition".

What is the impact on different company sizes?

Filippo Manuzzi: "The ETS can have a significant impact on the competitiveness of large ceramic companies compared to SMEs due to the greater ability to negotiate and purchase emission credits, thanks to their position of the market.

What are the next challenges that the ceramic industry will have to face in relation to ETS?

Filippo Manuzzi: “It is increasingly important to invest in energy-efficient technologies and reduce CO2 emissions. This requires a significant commitment in terms of research and development, as well as investment in production infrastructure.

It is necessary to ensure that the ETS market is fair and transparent, minimizing the effects of financial speculation. This is done by working in concert with the institutions, particularly in the European context."

Great efforts are required from the industrial system to make the transition quickly and effectively, and in general in the sector I see a great effort to reduce the impact of emissions. A commitment that is not only due to the economic impact of emissions, but is the result of greater and shared environmental sensitivity. Having to deal with the issue of financial speculation on ETS in this context makes everything more complicated and confusing.

The commitment is obviously not under discussion, but the solution lies in finding a balance within the credit system, putting pressure on the rules to protect the market more and better, guaranteeing fair opportunities for everyone.

It is also essential to continue to transparently communicate every part of the life cycle assessment and continue to categorize the best, most sustainable products, so that companies see their efforts recognized also in terms of marketing".