Italy

Soon after Kyoto ratification, the Inter-Ministerial Committee on Economic Planning (CIPE) established guidelines for national policies and measures to reduce GHG emissions. These provisions were later confirmed by several pieces of legislation. Industry organisations, environmental NGOs and other groups concluded the Voluntary Climate Pact with the government (1999), under which they agreed to curb CO₂ emissions. A fund for the reduction of atmospheric emissions and the promotion of energy efficiency and sustainable energy sources was established in 2000, financed from 3% of the receipts accruing from the carbon tax until 2002, when the carbon tax law ended.

In 2002, the Environment Ministry released the government’s strategy to cut GHG emissions. The plan relies on the Kyoto Protocol’s three flexible mechanisms of emissions trading and joint projects with other countries to deliver over half of the required emissions cuts. Several plans, including a reforestation plan, are the basis of this strategy. For the most part, they have yet to be implemented. The Inter-Ministerial Technical Committee for GHG emissions (CTE) was also established in 2002. In 2007 the CIPE adopted a further deliberation providing guidance to update the national strategy (Climate Change Action Plan). The latest CIPE deliberation was adopted in 2013 in order to enable Italy to contribute to achieving the Kyoto Protocol target and commitments set by the EU.

Energy Supply

The key energy policy document is the National Energy Strategy, adopted in 2013. It has a double time horizon (2020 and 2050) and aims to improve the competitiveness of the energy system and environmental sustainability. It aims to achieve four main targets by 2020: reducing energy costs by aligning prices with EU levels (national savings on electricity and gas estimated at approximately EUR9bn (USD11.3bn) per year); exceeding the European targets set out in the 2020 European Climate-Energy package (reducing GHG emissions by 21% compared with 2005, reducing primary energy consumption by 24% compared with the business as usual scenario, and achieving a 19-20% share of renewable energy in gross final consumption); improving security of supply, reducing dependency on energy imports by about EUR14bn (USD17.6bn) per year; boosting growth and employment by mobilising investments of EUR170bn – EUR180bn (USD213bn – USD225.9bn) by 2020, both in traditional sectors and in the green economy. A National Renewable Energy Action Plan was elaborated in 2009 in line with EU targets.

Since 2007, a feed-in tariff (FiT) has been offered to solar PV plants. The FiT is paid on the basis of the amount of energy produced and dispatched, and it is granted for a 20-year period. Rules governing the FiT are set out in the Conto Energia legislation, which is updated periodically by the legislature.

Since 2002, energy plants fuelled by other types of RES (wind, biomass, etc.) qualify for an incentive regime based on green certificates (GCs), which are issued by the GSE, traded between operators on a dedicated market, and surrendered to GSE at a fixed price. The GC scheme aims to increase the share of renewable energy in energy supply and reduce energy dependence. From 2016 the GC regime will be replaced by a dedicated FiT, calculated on the basis of the average price for the sale of electricity during the relevant year. To keep supporting plants already benefiting from incentives while ensuring long-term sustainability of the support system, further changes were introduced early in 2014 by the ‘Destinazione Italia Decree’, including lower guaranteed minimum prices and higher taxation for industrial renewable producers.

Energy demand

Energy demand policy was updated by the National Energy Strategy (NES, 2013), which lays down the key targets for energy demand management and aims to exceed targets in the 2020 European Climate-Energy package). The targets include: reducing primary energy consumption by 24% by 2020 compared with the business as usual scenario and reducing primary consumption by 17-26% by 2050 compared to 2010, by decoupling economic growth from energy consumption. Efforts in building and transport are identified as critical.

In accordance with EU rules, Italy has been elaborating National Energy Efficiency Action Plans since 2007. The latest version of the Plan was published in July 2014. The proposed measures in the residential, services, industry and transport sectors aim to achieve a primary energy saving target of 20.05% by 2020. Minimum energy efficiency standards have been introduced, principally following the requirements of the Ecodesign and the Energy Performance of Buildings Directives. Tax deductions for upgrading buildings were introduced by the Budget Law 2007 and have helped to generate savings in excess of 0.86 Mtoe/year, corresponding to more than 2 million tonnes/year of avoided CO2 emissions. A White Certificate energy efficiency obligation scheme was established in 2005 and has been expanded, most recently in 2014 to include telecommunications, water distribution, and transport. ‘Thermal account’, has been operational since 2013. This is the first nationwide direct incentive scheme for renewable thermal energy generation and the first direct scheme encouraging public authorities to implement energy efficiency actions in buildings and technical installations.

The Reorganisation of Energy Sector Regulation (2004) devolved power to regions to promote energy efficiency and renewable energy sources while maintaining the national scale of such promotion. The Budget Laws of 2007, 2008 and 2010 provide for fiscal incentives and financial measures to improve energy efficiency and abate emissions. These include the opportunity for municipalities to reduce real estate tax to buildings equipped with renewable energy installations (2008) and creation of a special fund to support the implementation of energy efficiency targets (2010).

Carbon pricing

Italy implemented the EU ETS in 2006. It has committed, with 12 other EU members, to return 50% of ETS revenues allocated to climate and energy efficiency programmes. Thus, the Budget Law 2007 established the “Revolving fund for Kyoto”. It provides EUR200m (USD251m) annually to finance measures to promote GHG emission reduc­tions through loans for energy efficiency (incl. buildings), distributed generation and small scale renewable generation.

Transportation

A number of national and regional incentives promote cleaner transportation and vehicles. In 2000, an Environment Ministry decree created incentives to encourage car-sharing. In 2004, the Ministry of Environment set up a programme that will reimburse city govern­ments up to 65% of the cost of adding environmentally friendly vehicles to each city’s fleet.

Policies on biofuels build on various regional incentives as well as the Biomass Fuels National Plan (2000, PROBIO), which aims to promote the deployment of biomass to replace fossil fuels through incentive systems. In 2005, a national indicative target was established of 2.5% of substitution of traditional fuels with biofuels by the end of 2010, increased to 5.75% in 2007. Today, Italy is Europe’s fourth-biggest producer of biodiesel, with a capacity of approximately 2.2mt per year.  It is set to mandate the use of advanced biofuels in cars and trucks. A Decree issued in October 2014 introduced an obligation for fuel suppliers to have at least 0.6% advanced biofuels (derived from substances such as algae, waste, or agricultural residues) in petrol and diesel from 1 January 2018, 0.8% from 1 January 2020 and 1% from 1 January 2022.

REDD+ and LULUCF

Italy participates in REDD+ by funding international projects directly or through the GEF, in countries such as Bolivia, Ecuador, China, Albania and Indonesia. The projects focus mainly on creating protected areas, managing forests to reduce wildfires or promoting sustainable agriculture.

Adaptation

The Ministry for the Environment, Land and Sea’s National Strategy for Adaptation to Climate Change is being finalised. The focus is on the integration of adaptation into different sectoral policies (so far the National plan for water use, 2005; National Strategic Plan for Rural Development 2007-2013; White Paper of the Ministry for Agriculture on “Challenges and opportunities of the rural development in adapting and mitigating climate change”, 2011). Regional governments are responsible for the implementation of local adaptation action plans.