Italy: Energy & Sustainability Newsletter – April 2021

The Italian Ministry of Ecological Transition has been established

On 1 March 2021, Law Decree No. 22 was published in the Italian Gazzetta Ufficiale. The Law Decree establishes the Ministry of Ecological Transition (MITE). The new ministry replaces the former Ministry of the Environment and absorbs competences of other Ministries.

In particular, the main tasks of the newly established MITE shall include the following:

• the definition of targets and policies concerning the energy and mining sectors;
• the authorization procedures of the plants (both offshore and onshore) for the production of energies from renewable sources under the competence of the central government;
• the implementation of the energy market liberalization processes and the promotion of the competition in the energy markets and the protection of the system’s cost-effectiveness and security;
• the promotion of agro-energies;
• the implementation of policies aimed at counteracting the climate changes and at promoting the sustainable finance and environmental savings, including through technologies for reducing greenhouse gas emissions.

The changes in the energy sector introduced by the law converting the Milleproroghe Law Decree

Italian Law No. 21 of 26 February 2021 converted into law, with amendments, the Law Decree No. 183/2020 (so-called “Milleproroghe”), by introducing new provisions relating to the energy sector.

In particular, this law provided for:

• the extension of the deadline for the termination of the price protection regime for small end customers in the gas market from 1 January 2022 to 1 January 2023;
• the extension of the deadline for the termination of the same regime in the electricity market for micro enterprises and domestic customers from 1 July 2022 to 1 January 2023;
• with regard to the rules governing the prospection, exploration and production of hydrocarbons, the extension of the deadline for the adoption of the Plan for the Sustainable Energy Transition of Eligible Areas (PiTESAI) to 30 September 2021.

The text of the Milleproroghe Law Decree as converted into law is available through this link.

Cooperation between the Italian Energy Services Manager (GSE) and the Lombardy region for energy transition

On 4 March 2021, the Lombardia Region and the GSE entered into a cooperation agreement in order to contribute to the sustainable energy transition in Lombardia Region. The cooperation agreement provides for the enhancement of public investments and direct assistance to local authorities for energy requalification of the public building stock in the fields of health, schools, public offices, public housing services, sports facilities and infrastructures and cultural venues.

The GSE statement is available through this link.

2019 annual Retail Monitoring Report published on ARERA’s website

The Italian Regulatory Authority for Energy, Networks and the Environment (ARERA) has published on its website the 2019 annual Retail Monitoring Report containing data on the performance of the gas and electricity markets, classified by Italian provinces. The report shows, among other things, the number of sellers actually active in the market, their presence on the market, the companies with the largest share of customers and the places where the free market has developed the most.

The 2019 Retail Monitoring Report is available through this link.

Biogas and biomethane from organic waste: Piemonte Region approves new guidelines

Piemonte Region has approved guidelines for the planning and assessment of environmental and territorial sustainability — as part of the preliminary investigation of the procedure relating to biogas and biomethane plants powered by organic waste — through regional resolution No. 15-2970 of 12 March 2021. The new resolution establishes that the existing provisions relating to unsuitable sites and areas of attention for biogas and biomass plants, set forth by regional resolution No. 6-3315 of 30 January 2012, should be applied to the plants for the production of biogas and biomethane powered by organic waste (FORSU), with regard to aspects not expressly mentioned in Chapter 8 of the Regional Plan for the management of special waste (Regional resolution No. 253-2215 of 16 January 2018).

Regional resolution No. 15-2970 of 12 March 2021 is available through this link.

Energy Account (Conto Energia): GSE’s controls cannot concern the legitimacy of the title and are limited to the verification of its existence

Lazio Regional Administrative Court, in judgment No. 2888/2021, published on 9 March 2021, clarified that the controls carried out by the GSE on the requirements to access the incentives cannot be aimed at verifying and/or contesting the legitimacy of the title, and must be limited to ascertaining its existence.

In this judgment, the administrative judges declared as illegitimate GSE’s decision ordering the revocation of the incentives under the Fourth Energy Account (Quarto Conto Energia) (established by Ministerial Decree of 5 May 2011) for a photovoltaic plant built on land owned by a municipality.

Judgment No. 2888/2001 is available through this link.

Restrictions on the applicability of the simplified authorization procedure for cogeneration plants

The fifth section of the Italian Council of State, with its judgment No. 2145/2021 published on 12 March 2021, clarified the principle according to which the use of the simplified authorization procedure under Article 27, paragraph 20, of Italian Law No. 99 of 2009 is limited to cogeneration plants that jointly comply with the following power limits: (i) installed generation capacity of less than 1 megawatt electric; and (ii) nominal thermal capacity of less than 3 megawatt.

Failure to comply with one of the above limits excludes the application of the simplified authorization procedure (in such cases the single authorization procedure will apply).

Judgment No. 2145/2021 of the Italian Council of State is available through this link.

Foreign operators must adhere to the Italian national certification scheme for the sustainability of biofuels and bioliquids

With judgment No. 359 of 10 March 2021, the Italian Council of State clarified that the national legislation providing the obligation for economic operators (including foreign ones) to adhere to the Italian national certification system of the sustainability of biofuels and bioliquids, established by the Ministerial Decree of 14 November 2019, is perfectly legitimate.

Judgment No. 359/2021 of the Italian Council of State is available through this link.

The first European regulation adopted as part of the EU Action Plan for Sustainable Finance came into force on 10 March

Some relevant provisions related to substantive framework requirements and general principles of the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (SFDR) came into force on 10 March 2021. Such provisions are applicable both to financial products (e.g., alternative investment funds (AIFs)) and financial market participants (e.g., AIF managers), which are now required to make mandatory environmental, social and governance (ESG) disclosures. These include:

1. Provisions applicable to financial products
   • Providing a description in the precontractual documents on: (i) how sustainability risks are integrated when making investment decisions; and (ii) the results of the assessment of the likely impacts of sustainability risks on the returns of the financial product.

2. Provisions applicable to financial market participants
   • Developing a sustainability risk policy or reviewing the risk management process to integrate sustainability risks.
   • Providing information on how principal adverse impacts of investment decisions on sustainable factors are considered in investment decisions.
   • Updating remuneration policies to include information on how remuneration policies are consistent with the integration of sustainability risks.

The SFDR text is available through this link.

Circular economy: Italy is first in Europe

Italy is once again first in Europe, for the third consecutive year, in the circular economy. This is what the third “National Report on Circular Economy in Italy 2021” states. The report is produced by the Circular Economy Network (CEN), the network promoted by the Italian National Agency for New Technologies, Energy and Sustainable Economic Development (ENEA) and the fondazione per lo sviluppo sostenibile along with a group of companies and business associations. The document also shows that by doubling the current rate of circularity of the world economy from 8.6% to 17%, the consumption of materials can be reduced by 21 gigatons (i.e., bringing the actual 100 to 79), thus managing to cut greenhouse gas emissions by 39% per year globally. Taking points in each area of the circular economy report, Italy places first with 79 points, followed by France with 68 points, Germany and Spain with 65 and Poland with 54. The circularity rate is the share of material resources deriving from recycling on the total of resources used.

The National Report on the Circular Economy in Italy 2021 is available through this link.

Dealing with climate change: a joint ambition under the UK/EU agreement on trade and cooperation

The Trade and Cooperation Agreement (TCA) between the European Union and the United Kingdom was finalized on 24 December 2020. The agreement confirms the parties’ joint ambition to achieve climate neutrality by 2050. The parties committed each other not to reduce the level of environmental or climate protection by seeking to increase their levels of protection over the time. In particular, the UK committed to implement a carbon pricing system from 1 January 2021. Both the EU and the UK will ensure that their carbon pricing systems cover greenhouse gas emissions from electricity generation, heat production, industry and aviation and, in addition, have agreed to cooperate on carbon pricing in the future.

The TCA draft is available through this link.

Horizon Europe strategic plan focuses on climate sustainability

On 15 March 2021, the European Commission adopted the Horizon Europe strategic plan (2021-2024), the new European program containing strategic guidelines for investment in research and innovation with a budget of EUR 95.5 billion.
The plan sets out four strategic guidelines for EU research and innovation under Horizon Europe for the next four years:

• promoting an open strategic autonomy by leading the development of key technologies, digital, enabling and emerging sectors and value chains;
• restoring Europe’s ecosystems and biodiversity and sustainably managing natural resources to ensure food security and a clean and healthy environment;
• making Europe the first climate-neutral, sustainable, digital and circular economy, through the transformation of its mobility, energy, construction and production systems;
• creating a more resilient, inclusive and democratic European society.

The text of the Horizon Europe strategic plan (2021-2024) is available through this link.

COVID-19: The common approach adopted by the European Commission to monitor the presence of SARS-CoV-2 in wastewater

The European Commission through Recommendation No. 2021/472/EU of 17 March 2021 called on Member States to establish a surveillance system to monitor the presence of SARS-CoV-2 and its variants in wastewater. For this purpose, the European Commission encourages Member States to put in place a national wastewater surveillance system no later than 1 October 2021.
The European Commission’s recommendation sets out some guidance on: (i) the design and management of SARS-CoV-2 wastewater surveillance systems; and (ii) the rapid transmission of data and information collected by the relevant health authorities.

The text of the recommendation is available through this link.