|August 02, 2007|
Italy: Waste Recycling & Recovery
|The Italian government is gradually strengthening environmental laws not only in response to public opinion, but also as a result of the country's obligations as a member of the European Union. Italy faces many problems in terms of pollution, but waste management represents one of the most serious. The implementation of EU directives on waste management will open potential market opportunities for foreign firms, especially those engaged in waste recycling and waste recovery technologies, new product development and technological innovation. |
Italy is not an easy market to penetrate and much patience is required. Project approval or bidding on a government tender is usually a lengthy process although funding for a specific project may have been approved, bureaucratic problems may delay the selection of the candidate. Because of the high quality level of firms operating in this sector, the products and/or services should represent real innovation.
Waste management and recycling is one of the most serious challenges facing Italy and it has been recognized as a top priority by the Government of Italy (GOI). At present, Italy has the capacity to properly manage and dispose of only 30 percent of the waste it generates, and has not yet been able to develop adequate waste treatment and disposal programs. Waste recovery and recycling practices, despite their growing importance, still have a minimal impact on the waste management. Landfills have continued to represent the primary means of disposal of solid waste.
The GOI has introduced a landfill tax, which is reducing the amount of waste material that is dumped in landfills. The tax is designed to make it more cost effective to choose other waste management options. A chronic shortage of landfill sites combined with EC legislation that sets targets for the reduction of biodegradable waste sent to landfills, will encourage recycling technologies and force Italian authorities to consider different approaches in dealing with waste.
Over the past years, the processing of industrial and urban waste has become a serious environmental and political issue for Italy. Recycling and disposal of waste in a safe, cost-effective way has become very difficult. The constant increase in the amount of waste both organic and toxic, places a great burden on aging waste-processing plants. Many landfills are working at full potential and cannot process the waste they receive according to environmental laws.
Italian industrial firms have slowly decreased the quantity of waste produced, mainly due to the waste minimization policies and waste recovery practices implemented by most manufacturers in their product processes. Most manufacturing companies directly treat, recover, and recycle their waste. In the medium term, the market potential is particularly promising for waste recycling and hazardous waste management equipment, technologies and services.
With the decree of July 2005 n°151, the Italian Government has converted into law the WEEE Directive of 2002/96/CE and the EU Directive RoHs 2002/95CE. The Directive on Waste Electrical and Electronic Equipment (WEEE) requires producers to recycle waste and electronic equipment from August 2005; the Directive on the Restriction of Hazardous Substances (RoHs) bans certain hazardous substances in electrical and electronic products from July 2006. The Italian decree came into force on July 13th of August 2005.
The WEEE directive was issued with the desired end of preventing the production of waste from electrical and electronic equipment and to promote the reuse, recycling and other methods of recovery in such a way to reduce the quantity meant for disposal at waste management facilities, and also to foresee the restriction and limitation of the use of lead, mercury, cadmium, hexavalent chromium and other fire retardants in electrical and electronic equipment. The Italian Ministry of Environment has the responsibility for implementing the Decree and is currently still drafting required decrees to fully implement the EU Directive.
As Italian industry is dependent on foreign expertise and know-how, good opportunities exist for companies wishing to penetrate this market with advanced waste treatment technologies or sophisticated waste management services.
Best sales prospects for equipment and technologies:
Italy is constantly adapting its legislation to EU environmental directives, which are establishing higher standards. Companies interested in the Italian market should strongly consider having a competent local agent, distributor or representative unless they plan to open their own branch office or subsidiary. A potential agent or distributor should be able to provide technical assistance and local servicing and should be well acquainted with local political dynamics, key decision makers and business customs. Distributors could also be Italian manufacturers interested in complementing their product line. Companies offering new technologies should look for cooperative arrangements or joint venture/licensing agreements with Italian partners.
Selling to the public sector (i.e. municipalities and regional governments) normally requires participation in public bids. Italian engineering and contracting firms operating in this sector are generally well aware of public bidding procedures as they often undertake the responsibility of supplying "turn-key" plants to the private and public sector.
There are approximately thirty major Italian companies operating in this area. Several of these companies are large engineering firms with waste divisions offering turnkey plant operations. These companies in the waste services sector are mostly active locally and offer services in the industrial urban waste management sub sectors.
Medium/large companies in the private sector represent the major end users of waste management disposal equipment and services. The most important users are the chemical and petrochemical industries, the food processing industry, the mechanical industry, the steel industry, the paper industry, and the tanning industry. Large service companies, which collect, transport, manage and dispose of waste produced by the above industries are also becoming an increasingly important end-user sector.
Germany, France and U.K. are the key sources of foreign competition. The Italian industry is largely dependent on foreign expertise for know-how. Competition in the market place is fierce, but demand is strong for truly innovative products and services, and recycling of waste opens a financially attractive market for advanced technologies.
There are no regulations in Italy binding foreign suppliers to a specific distribution channel. Overall, the Italian import market is quite favorable towards U.S. products and services. While imports from EU member countries are exempt from import duties, goods from other countries are subject to import duties ranging from 3 percent to 10 percent, according to the products offered. All products are subject to a Value Added Tax (VAT) of 20 percent.
Technical specifications are essentially those established by the EU, which have been incorporated into law. Official technical norms are issued by UNI, the Italian Standards Institute, and electrical norms are from CEI -- Comitato Elettrotecnico Italiano, the Italian Electrotecnical standards Institute.
Financing practices for this business sector complies with normal business standards. Most of the financing is done through private banking institutions. In the private sector, the turnaround time for paying invoices is never less than 90 days, but sometimes it may go up to 120 - 180 days. Companies should be aware that public customers are often much slower in paying. A certain degree of flexibility is considered normal, and is often expected, in the establishment of terms and conditions, particularly with private purchasers.
Excerpts from "Italy: Overview of the Waste Recycling Market:, U.S. Commercial Service, July 2007.