Italy: Ecological Transition: Regulatory update

• Italy

• Energy and infrastructure - Clean energy

18-03-2021

It is no secret to any investor or developer operating in the clean energy sector in Italy that the last few months have seen a number of challenges in terms of moving clean energy projects forward. One of the key areas that is hampering Italy in achieving its climate change and EU targets in terms of renewable energy deployment and investment is the complex and heavily bureaucratic public administration. However, recent announcements from the new Ministry of Ecological Transition shed some light on what the future may hold. We take a brief look at the objectives and statements released by the Ministry.

CO2 emissions reduction

Roberto Cingolani, Minister of Ecological Transition, has set out his programme to achieve the targets in CO2 emissions reduction and generation of clean energy. Here are the key highlights:

• Reduce the time to approve permits for clean energy projects: The recent auctions under the FER Decree have been undersubscribed. The most recent saw only a quarter of the available capacity being awarded. One of the main reasons for this is the lengthy permitting procedures for clean energy projects. Minister Cingolani proposes to introduce laws to reduce the time required to obtain a permit making sure that “objective” criteria are followed when public bodies are deciding whether to approve projects.
• Speed up the EIA process: Almost all clean energy projects in Italy are subject to the EIA process which inevitably leads to a lengthening of the time period from when a permit application is made and when the permit approval is obtained. Minister Cingolani has mentioned that the Ministry of Ecological Transition is well aware of the backlog of permit applications stuck in the permitting process (PAUR/AU/PAS). Measures will be introduced to seek to reduce the time periods in order for the EIA committees to provide their opinion on individual projects. Minister Cingolani noted that the new EIA procedure has improved the timeframe for obtaining an opinion.
• Technological dependency: Minister Cingolani touched on the winners and losers of the energy transition and mentioned that Italy will seek to invest in green hydrogen, adding that it is important that such investment is made in the manufacturing of the hardware itself, not just the deployment of said technology.
• Nuclear fusion: A closing remark to nuclear fusion was made with Minister Cingolani stating that green hydrogen will take a number of years to deploy and that the long term energy mix of Italy will most likely include nuclear fusion.

The statements made by Minister Cingolani are a positive message to those in the clean energy sector. Those statements will now need to be turned into laws to effect the changes required to make those intentions a reality. It is expected that the Interministerial Committee for Ecological Transition (Cite) will meet this summer to approve the Ecological Transition Plan.

This is not the first time in recent months that laws have been passed to try and oil the wheels of the creaking Italian permitting regimes. The Decreto Semplificazioni introduced a number of measures aimed at simplifying the permitting regime, including, inter alia, simplifying the EIA procedure, clarifying key elements of the EIA procedure such as the interpretation of non-material variations and making it easier to identify unsuitable areas for project development. Given the limited impact of the Decreto Semplificazioni within the public administration in real terms, it will be interesting to see whether the Ecological Transition Plan can build on the momentum created.

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