Italy Raises Tax on Energy Firms, Threatening EDF’s Edison Capital Plans

Rome – Italy has increased its regional tax on productive activities (IRAP) levied on energy companies by two percentage points, a move expected to generate approximately €1 billion ($1.18 billion) in additional revenue through 2028. This decision, announced by Prime Minister Giorgia Meloni on February 18, 2026, aims to fund measures designed to reduce energy bills for both households and energy-intensive businesses [1].

IRAP Hike Details

The IRAP tax rate will increase from 3.90% to 5.90% for companies involved in the production, distribution, and supply of energy products [1]. The government anticipates this increase will provide over €5 billion in benefits to consumers and businesses, though the specific timeframe for these benefits remains unspecified [1].

Impact on EDF and Edison

The regulatory changes have prompted French energy giant EDF to potentially reconsider its plans to open up the capital of its Italian subsidiary, Edison. Edison’s CEO, Nicola Monti, stated on Wednesday, February 17, 2026, that the outcome of the decree could significantly alter the company’s business plan and even halt the capital opening [2].

This development comes as Edison reported rising revenues, reaching €17.7 billion, but also a slight decline in profit margins [3]. The increased tax burden adds another layer of complexity to EDF’s strategic considerations regarding Edison.

Italy’s Energy Market Context

Italy’s energy costs are notably higher than those in France and Spain due to its heavy reliance on imported gas for electricity generation, making the country vulnerable to fluctuations in international prices and geopolitical instability [1]. This situation underscores the government’s motivation for seeking ways to mitigate energy costs for its citizens and businesses.

Strategic Implications

EDF’s potential relisting of Edison on the Milan stock exchange was previously seen as a way to attract international investors and align with Italy’s renewable energy goals [4]. However, the new tax regime introduces significant uncertainty, potentially impacting the attractiveness of the IPO and EDF’s overall capital strategy.

The situation highlights the broader challenges facing the energy sector as companies navigate the energy transition, balancing asset divestitures, regulatory risks, and the shift towards low-carbon energy sources [4].