|March 29, 2009|
Environment Sector Profile Rome, Italy
|1. Sector Overview |
While environmental awareness has greatly increased in recent years, the main drivers in the Italian environmental technologies market still remain Italy’s obligation, as a EU member State, to comply with EU directives and regulations. 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. Landfills have continued to represent the primary means of disposal of solid waste. A chronic shortage of landfill sites combined with EU 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.
As for other issues, the wastewater system is still clearly inadequate as well as the water collection and distribution system.
On air pollution control objectives, during the period 2003-2005, hazardous gas levels in the air have raised due to increased circulation of vehicles. In summer 2007, 93% of air quality monitoring plants demonstrated that the quantity of PM 10 surpassed accepted levels, particularly in cities of Northern Italy. However, during that same period, dangerous gases complex value decreased due to higher quality in vehicle manufacturing and increased measures for air quality recovery.
T he Italian renewable energy market offers the greatest potential in the wind, solar, and bioenergy sectors. Expectations of growth in this market are considerable, as Italy lags behind other European countries in the production of energy from renewables, especially in wind and solar power. Italy’s target is to produce 22% of national electricity from renewable by 2010 and to install 20 TWh per year by 2010 to meet EU Directive 2001/77/CE.
Expo 2015 ("Feeding the Planet, Energy for Life") in Milan is an additional up-coming opportunity in the Italian market as it will be dedicated to the theme of sustainable development with the aim of leaving a positive legacy to the city of Milan, based on social responsibility, economic and environmental sustainability values. The Expo’s energy demand (electric and thermal) will thus be covered by the most technological advanced systems, integrating different energy sources. Electric energy requirements will be totally powered by renewable sources; almost 10% will be obtained by photovoltaic panels (20.000 m² of panels is estimated) and the rest by stipulation of "green" electric energy supply contracts. Solar thermal panels will be used to set heating and sanitary hot water production. With the aim to reduce CO 2 emissions, many electrical means of transportation will be exploited, while underground systems and train lines will be improved to reduce private transportation (a railway station is planned inside the Expo area). Thermal insulation in new buildings will be improved by using insulating materials and other solutions, ventilated wall, roof systems and other greenbuilding technologies.
2. Market Sector And Challenges
Italy’s strategic location in the Mediterranean basin makes it an ideal gateway to emerging markets in South-eastern Europe, North Africa, the Balcans, and the Middle East. Several Italian companies specialized in turn-key operations have strengthened their position in these foreign markets. Competition is large and fragmented in Italy with only a handful of large companies and many small enterprises; the latter specialize in niche products and technology. Nevertheless, demand from abroad is strong for innovative products and services. Major foreign competitors are from the U.S., Germany, France and the UK.
Companies interested in the market should seek the cooperation of local agents and distributors or, alternatively, cooperate with Italian producers who wish to complete their line of products. Equally, in public tenders, interested Canadian companies are recommended to engage the services or enter into representation agreements with local partners (such as consulting and engineering companies), since they will be abreast of current legislation governing sector and public bidding procedures, and are thus in the position to easily comply with EU requirements and specifications. The language gap might constitute a barrier when dealing with small to medium sized companies or with the public sector. Assistance in this field is required in many cases.
End-users of environmental technologies and services are both private and public. Among private sector potential users, we can include industrial companies in the petroleum, chemical, cement, glass, and food processing sectors. As for public end-users, regional governments, municipalities, public utility companies, and hospitals account for approximately 40%.
As far as import duties and tariffs, third countries are subject to customs duty ranging from 1.7% to 5% plus an additional 20% VAT (value added tax) mandatory for imports originating from any country. There are no non-tariff barriers applied to environmental technologies and equipment. Business climate in Italy requires time and patience, as there is no one-stop shopping.
Waste from electrical and electronic equipment (WEEE)
As of August 2006, Italy has introduced into national legislation EU Directives on waste management of electrical and electronic equipment (WEEE) and the reduction of hazardous substances in electrical and electronic equipment (ROHS). When referring to the proper management of "end-of-life" of hi-tech waste, the WEEE directive obliges producers (including Italian importers of appliances from abroad) to take the responsibility for the collection and disposal of end-of-life products availing themselves of qualified operators. According to Italian Decree nr. 151 of 2005, producers have the obligation of financing disposal systems, register with the national Register of Producers, label products placed on the market after August 13th, 2005, and communicate sales information to the Surveillance and Control Committee in order to determine respective market quotas. Finally, when selling a product, producers are also responsible for withdrawing the old one. The Directive on ROHS refers to the restriction of certain hazardous substances, in particular mercury, cadmium, lead, exavalent chromium, Pbb and Pbde present in some electrical and electronic appliances.
3. Subsector Identification
Waste Management, Recycling and Land Reclamation
According to the last Italian Environmental Protection Agency (Rapporto Rifiuti APAT 2007), Italy produced 32.5 million metric tonnes of urban solid waste. L andfills continue to represent the primary method for the disposal of urban solid waste (51.7% with 522 active garbage dumps in the whole territory in 2006, 37 units less in comparison to the previous year). T he GOI has introduced a landfill tax, which is designed to make it more cost effective to choose other waste management options. The Northern region of Lombardy, one of the most vibrant economies in Europe, has confirmed its primate as the region that sends to landfills the lesser quantity of urban waste (17% of the total). The gap between northern and southern Italy still remains with Sicily, Apulia and Molise with the highest percentage of landfill disposal.
However, differentiated collection of the organic fraction has improved, reaching 2.4 million tonnes in 2006, 11.4% more compared to 2005. The resulting composting plants are mainly concentrated in northern Italy, especially in the regions of Lombardy, Veneto, and Emilia-Romagna. The expected development of said initiatives in the centre and south of Italy will lead to a considerable increase in the number of these plants.
In light of integrated solutions, thermal destruction with energy recovery will have an ever increasing role and will certainly represent an excellent market. Currently, only 9.8% of waste is managed by waste-to-energy in Italy compared to other European countries. The shortage of landfills and the new legislation on landfill management requires an increase from the actual 50 waste-to-energy units (31 units in the north, 13 in the centre and 6 in the south) to over 100 within the next 10 years. Potential end-users of waste management plants are municipalities, chemical industries, machinery, pulp and paper industries, mining and energy companies.
In 2006, decree nr. 152/06 reformulated land reclamation discipline, introducing risk analysis and contamination threshold concentrations, and devolved land reclamation interventions in polluted sites to be implemented through proper planning of Regional Environment Protection Authorities. A national priority list of 54 national interest sites has been identified, while the total number of potentially contaminated sites under regional competency is estimated to be 15,000.
Presently, the national average of differentiated waste collection is approximately 25.8%, but many cities reach higher percentages, especially in northern Italy (39.9%). These numbers are quite low with respect to the ambitious objectives established by law n. 296 of December 2006 which fixed the aim of 50% recycling by December 2009 and 60% by the end of 2011.
The recovery of paper and paperboard in Italy continues to grow. The rate of recovered and recycled paper in Italy is close to 50%. If we take only packaging into consideration, the share of recovered paper jumps to 69.7%. For the Italian paper industry, recovered paper constitutes the major raw material. In 2007, the paper industry consumed 5.6 million tonnes of recovered paper making up for 48.8% of its total consumption. While domestic consumption still accounts for 90% of the total collection, exports are constantly growing (from 41,800 to 1.1 million tonnes in 10 years). The recycling of paper and paperboard in Italy is guaranteed by a consolidated network of operators in the whole territory, which is made up of 326 transformation platforms, 67 paper mills and 149 platforms for the delivery of material managed by the COMIECO consortium.
Waste from packaging is a priority for European legislation. Given the percentages already achieved for certain materials in Italy, Italian Decree nr.152 of 2006 sets higher objectives for some categories of packaging waste. In 2006, the total introduction of packaging waste in Italy was equal to 12.1 million tonnes. The quantity of the total recovered waste was 8 million tonnes, equal to 66% of the total market and much above the objective of 60% set up by law, while recycle reached 55%.
As for the recovery of the individual product categories, plastic registered a major increase with +6.5%, followed by wood (+5.9%), and aluminium (+5.3%). Plastic is however mainly sent to energy recovery, while recovered aluminium constitutes a major supplier of material to industry. During the last decade, the Italian production of recycled aluminium grew by 65% reaching the amount of 619,000 tonnes in 2004: this corresponds to 76% of the aluminium produced in Italy. Italy imports aluminium wreckage for a quota of approximately 40% of the production potential and has therefore the capacity of absorbing any increase in the quantities of collected aluminium waste.
Water and Wastewater Treatment
With approximately 12,000 depurating plants, wastewater sewage in Italy covers 84% of the population although only 48% has a total sewage treatment, 39% has a partial sewage treatment and 13% discharge not treated wastewater straight into water sources. The highest number of active sewage treatment plants is in north-western Italy (4,329 units), while in the south over 10% (234) is not in use and 7% (152) is under construction. Of 12,065 units of sewage treatment plants, 9,210 are small size and of these 5,699 are only for primary treatment. The aqueducts cover 96% of the population (297 lt. a day per-capita) while the drinking water purification system covers 73% of the total population.
Notwithstanding the amount of investments in the last ten years, the wastewater, the water collection and distribution systems are still clearly inadequate. The investment needed to bring Italy’s water and sewage system up to international standards is probably far beyond the limits of public resources, so private investment is a necessity. It will be necessary to invest about €51 billion Euros to conform the water system to the targets set by law.
The public sector is still the most important end-user of water and wastewater equipment and technologies. The domestic scene is dominated by engineering and contracting companies supplying turn-key systems based on technologies which they have developed themselves or adapted from foreign companies. Potential end-users of water and wastewater equipment are chemical industry, municipalities, agriculture, and mining industries.
Air Pollution Control and Renewable Energy Sources
In Italy, legislation concerning air pollution control is based on law n. 351 of August 1999. During 2003-2005, hazardous gas levels in the air have risen due to the increased traffic of vehicles. In Summer 2007, 93% of air quality monitoring plants demonstrated that the quantity of PM 10 surpassed accepted levels, particularly in cities of Northern Italy. However, during that same period, dangerous gases complex value decreased due to higher quality in vehicle manufacturing and increased measures for air quality recovery.
As for the Italian renewable energy market, it offers the greatest potential in the wind, solar, and bioenergy sectors. Growth expectations are considerable, as Italy lags behind other European countries in the production of energy from renewables, especially in wind and solar power. Italy’s target is to produce 22% of national electricity from renewables by 2010 and to install 20 TWh per year by 2010 to meet EU Directive 2001/77/CE. In 2006, about 16% of the total Italian electric energy was produced by renewable sources of which 57% was from hydroelectric, 30% from biomass and waste, 9% from geothermic, 3% from wind power and 1% from photovoltaic.
Canadian Government Contacts
Embassy of Canada in Rome