1 Legal framework

1.1 Which legislative and regulatory provisions govern environment and climate regulation in your jurisdiction?

From a general point of view, environmental issues are regulated by Legislative Decree 152/2006, the Consolidated Environmental Law, which implemented Directive 2004/35/EC. The primary objective of the Consolidated Environmental Law is to promote the quality of human life by safeguarding and improving environmental conditions and promoting the cautious and rational use of natural resources.

Aimed at protecting the widest range of matters, the Consolidated Environmental Law regulates the following issues:

  • procedures for:
    • strategic environmental assessments;
    • environmental impact assessments; and
    • integrated environmental authorisations;
  • the protection of soil and the fight against desertification;
  • the protection of water from pollution and the management of water resources;
  • waste management and remediation of contaminated sites;
  • the protection of air and the reduction of emissions into the atmosphere; and
  • compensation for environmental damages.

1.2 Which bilateral and multilateral instruments on environment and climate regulation have effect in your jurisdiction?

Italy encourages and supports the efforts of developing countries to promote environmental protection and sustainable development. This is achieved through:

  • bilateral programmes – mostly with vulnerable countries and those exposed to the risks of climate change;
  • multilateral programmes, through the support of development banks and international funds;
  • bilateral and multilateral agreements with international organisations;
  • partnerships; and
  • multilateral coalitions.

The following multilateral agreements apply to Italy:

  • the Montreal Protocol on Substances that Deplete the Ozone Layer;
  • the Kyoto Protocol on Climate Change;
  • the Cartagena Protocol on Biosafety;
  • the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from Their Utilization to the Convention on Biological Diversity;
  • the Bonn Convention on the Conservation of Migratory Species of Wild Animals;
  • the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora;
  • the UNESCO Conventions for the Environment and Biodiversity;
  • the Ramsar Convention on Wetlands;
  • the United Nations Economic Commission for Europe Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters;
  • the Convention on the Protection of the Alps; and
  • the Convention on the Protection and Use of Transboundary Watercourses and International Lakes

Italy has signed bilateral agreements with the following countries (many others are under negotiation):

  • Africa: Botswana, Egypt, Eswatini (Swaziland), Ethiopia, Djibouti, Kenya, Lesotho, Mali, Morocco, Democratic Republic of Congo, Rwanda, South Africa, Sudan, Tunisia, Zambia.
  • Asia/Middle East: China, United Arab Emirates, Russian Federation, Jordan, India, Iran, Kazakhstan, Kurdistan (Iraq), Lebanon, Palestine, Qatar, Uzbekistan, Turkmenistan, Vietnam.
  • Europe: Albania, Georgia, Montenegro, Serbia.
  • America: Argentina, Costa Rica, Cuba, Mexico, Nevada, Paraguay, Peru, Dominican Republic.
  • Small Islands: Small Pacific Island Developing States (14 Countries: Cook Islands, Fiji, Kiribati, Micronesia, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu); Caricom (11 countries: Antigua and Barbuda, Bahamas, Belize, Dominica, Grenada, Guyana, Haiti, St. Kitts and Nevis, St Vincent and the Grenadines, St Lucia, Suriname); Maldives, Mauritius, São Tomé and Príncipe, Seychelles, Union of the Comoros.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have? To what extent do they cooperate? What are the mechanisms for cooperation?

The applicable law is enforced by supervisory bodies that exercise judicial police functions. They can impose administrative sanctions and, in the case of environmental crime, they are obliged to report the potential crime to the public prosecutor, which is responsible for the enforcement of criminal measures.

1.4 What is the regulators' general approach to environment and climate regulation/action?

The Italian regulator's approach is to comply fully with EU and global legislation, taking particular account of the harmonisation of such legislation with specific local needs.

2 Environmental protection

2.1 What are the key features of the regulatory regimes that protect the following environmental assets in your jurisdiction? (a) Air; (b) Soil; (c) Fresh water; (d) Sea water; (e) Flora and fauna; and (f) Natural habitats and scenic landscapes.

(a) Air

Legislative Decree 155/2010 implemented Directive 2008/50/EC on ambient air quality and cleaner air for Europe. The decree provides definitions of the following:

  • limit values;
  • target values;
  • information and alarm thresholds;
  • critical levels; and
  • long-term objectives.

It also identifies the list of pollutants for which monitoring is mandatory and specifies the methods of transmission and the information on the state of air quality that must be sent to the Ministry of the Environment on a regular basis.

Legislative Decree 152/2006, Part V – which applies to all plants (including civil plants) and to activities that produce emissions – contains provisions on:

  • emission values;
  • prescriptions;
  • sampling methods;
  • analysis of emissions; and
  • the criteria for assessing the conformity of the values measured within the limits of the law.

With regard to the containment of emissions and greenhouse gases, Directive 2284/2016 was implemented by the Italian government through Legislative Decree 81/2018, which established the new national commitments to reduce emissions of sulphur dioxide, nitrogen oxides, non-methane volatile organic compounds, ammonia and fine particulate matter. Directive 2009/29/EC was implemented by Legislative Decree 30/2013, further amended by Legislative Decree 111/2015, concerning the assignment and release of greenhouse gas emission quotas for air transport activities.

(b) Soil

The Italian legislation focuses on reducing the risk of floods and landslides. It includes provisions on the assessment of hydrogeological risk and the grant of financial aid or funding for hydrogeological risk mitigation interventions or demolition or removal of illegal properties in areas at risk.

(c) Fresh water

The Italian legislation dealing with water is extremely broad and covers many issues, such as:

  • groundwater;
  • surface water;
  • transitional water (surface water bodies near the mouth of a river, which are partially saline in nature due to their proximity to coastal waters, but substantially affected by freshwater streams);
  • bathing water; and
  • waste water.

(d) Sea water

Legislative Decree 190/2010 implemented EU Directive 2008/56. Pursuant to this decree, the Ministry of the Environment is in charge of assessing the environmental status of marine waters and the impact of anthropogenic activities on the marine environment through:

  • the definition of environmental goals;
  • the development of coordinated monitoring programmes, aimed at continuously assessing the state of the marine environment; and
  • the development of programmes of measures to achieve and maintain good environmental status.

This step-by-step process is repeated every six years for each marine region or sub-region identified by the directive. Italy falls within the Mediterranean Sea region, which is divided into the following sub-regions:

  • the Western Mediterranean Sea;
  • the Adriatic Sea;
  • the Ionian Sea; and
  • the Central Mediterranean Sea.

(e) Flora and fauna

In 2010, Italy issued a National Biodiversity Strategy based on cooperation between the various institutional, social and economic actors involved, which are committed to working together to stop the decline of biodiversity.

The strategy is divided into three key themes:

  • biodiversity and ecosystem services;
  • biodiversity and climate change; and
  • biodiversity and economic policies.

The strategy also provides for three supervisory bodies:

  • the Joint Committee for Biodiversity;
  • the National Observatory for Biodiversity; and
  • the Consultation Table.

According to the National Strategy for Biodiversity, every two years a report on the implementation and effectiveness of the strategy itself must be drafted. To this end, a set of indicators is listed, consisting of:

  • 10 status indicators, which aim to represent and evaluate the state of biodiversity in Italy; and
  • 30 evaluation indicators, which are designed to assess the effectiveness of the actions carried out to meet the objectives of the strategy.

(f) Natural habitats and scenic landscapes

Protected areas are an important instrument for the protection of habitats. About 10% of the national territory is protected through the creation of the following protected areas, each with different natural characteristics:

  • national parks;
  • regional natural parks;
  • nature reserves;
  • marine protected areas;
  • wetlands; and
  • other types of areas.

These are listed in an Official List of Protected Areas, which is periodically updated by the Ministry of the Environment and includes all protected natural areas – marine and terrestrial – that have been officially recognised.

The extent of the area to be protected and the specific protection regime will determine how a specific protected area should be classified. National and regional parks are the largest protected areas.

Each area is subject to levels of protection and prohibitions that correspond to its qualitative and quantitative importance. The protection regime thus depends on the scientific value of the area to be protected: the greater the environmental merits, the greater the protection.

2.2 What are the key features of the regulatory regime that protects against environmental nuisances (eg, noise, odour and light pollution) in your jurisdiction?

The Italian legislation sets maximum limits for noise exposure in living spaces and in the external environment. For the purpose of setting noise exposure limits, municipalities must adopt zone classifications in relation to the intended use of the territory (eg, industrial, residential, commercial).

Remediation plans are envisaged both by companies and by the municipalities, to comply with the applicable standards. Based on the data collected and the proposals received, the regions must prepare an annual regional intervention plan for the remediation of noise pollution.

There is no national legislation dedicated to odour pollution: the regions are entitled to legislate on this matter. Regions may provide for measures for the prevention and limitation of odour emissions from plants or factories, and define different thresholds.

‘Olfactory nuisance' is generally defined as the direct or indirect release of odorous substances that harm the environment by having a negative olfactory impact on people determined by a concentration at the receptor higher than a certain quantity in a determined area, with duration mainly greater than one hour and which occurs in total for more than 2% of the hours in a year.

2.3 What are the consequences of breach of these regulatory regimes?

The possible consequences of the infringement of an environmental rule are manifold and very much depend on the nature of the violated provision.

They include:

  • administrative fines;
  • an order to restore the situation as it was prior to the infringement (where possible);
  • suspension or prohibition of the activity; and
  • criminal sanctions.

3 Climate change/action

3.1 What are the key features of the regulatory regime governing greenhouse gas emissions in your jurisdiction?

The Consolidated Environmental Law establishes:

  • emissions values;
  • prescriptions;
  • sampling and analysis methods for emissions; and
  • the criteria for assessing the conformity of the values measured with the limit values.

In case of emissions, a plant must require and obtain a specific permit, which has a duration of 15 years. Legislative Decree 102/2020 has simplified the procedure for requesting and obtaining authorisations for atmospheric emissions.

3.2 What emissions trading regimes are operational in your jurisdiction and what are their key features?

As Italy is an EU member state, the EU Emissions Trading System is the main tool adopted to achieve carbon reduction targets in the main industrial sectors and in the aviation sector.

3.3 How prominently does renewable energy feature in the energy mix in your jurisdiction? What regulations and other measures have been put in place to promote the use of renewable energy?

The Renewables Decree (28/2011) implemented Directive 2009/28/EC and provides for tools and incentives aimed at achieving the 2030 objectives in the field of renewable energy (see question 3.5). ‘Renewable energy' is all energy that comes from non-fossil sources.

The decree provides that, as from 2018, new buildings or buildings undergoing major renovation must provide energy production plants that are capable of drawing a certain percentage of the energy consumed from renewable sources. The mandatory quotas vary depending on whether the building is publicly or privately owned; some exceptions are also provided (eg, for certain buildings in historic city centres).

Public incentives for renewable energy sources in Italy are provided through various mechanisms, such as the following:

  • green certificates;
  • all-inclusive charging;
  • energy accounts;
  • thermal accounts; and
  • community, national and regional contributions.

3.4 What regulations and other measures have been put in place to promote greater energy efficiency in your jurisdiction?

To promote greater energy efficiency, various incentives are available, including tax deductions, thermal accounts and the white certificate system.

  • Tax deductions: Parties that carry out energy requalification of buildings can benefit from tax deductions of up to 75%.
  • Thermal Account 2.0: The Thermal Account 2.0 aims to promote greater energy efficiency and the production of renewable energy. It is available for public administrations, companies and individuals.
  • White certificates: These are securities relating to the achievement of energy savings. The system is linked to the achievement of annual objectives by distributors of electricity and natural gas.
  • National Energy Efficiency Fund: The fund supports energy efficiency interventions carried out by companies and by the public administration on buildings, plants and production processes.
  • Ecobonus and Superbonus 110%: These support energy efficiency interventions of some buildings, under certain conditions.

3.5 What other initiatives have been rolled out in your jurisdiction to combat climate change and its effects? How are those effects typically manifesting in your jurisdiction at the present time?

In 2020, the Ministry of Economic Development, together with the Ministry of the Environment and the Ministry of Infrastructure and Transport, issued the National Integrated Plan for Energy and Climate.

The National Integrated Plan for Energy and Climate establishes the national objectives for 2030 regarding energy efficiency, renewable sources and carbon emissions reductions, as well as the objectives in terms of energy security, interconnection, the single market for energy and competitiveness, development and sustainable mobility. It further outlines the measures that will be implemented to ensure the achievement of these objectives.

3.6 What impact is Covid-19 likely to have on climate action in your jurisdiction?

According to the International Energy Agency, carbon emissions from energy use in 2020 dropped to the same levels as 10 years ago. However, this was a short-term effect: indeed, in December 2020, emissions exceeded 2019 levels by 2% on a monthly basis.

The political agenda for 2021 – during which numerous negotiations and events regarding climate change, biodiversity and the oceans are scheduled to take place – could undergo significant changes due to the COVID-19 pandemic. The calendar of European and international climate negotiations has already been compromised and numerous bilateral meetings conducted by Italy have been skipped.

4 Environmental permits and approvals

4.1 What environmental permits and approvals are required in your jurisdiction, and when are these typically required?

Italian law provides for several different types of environmental permits and/or approvals.

The most notable are:

  • the strategic environmental assessment (VIA) and the environmental impact assessment (VAS), which ensure that plans, programmes and projects are carried out in compliance with the principles of environmental protection, quality of life and sustainable development; and
  • the integrated environmental authorisation (AIA), which authorises the operation of an installation under certain conditions that ensure compliance with pollution prevention and reduction requirements.

The strategic environmental applies to plans and programmes that cover various sectors of activity, such as energy, transport, land use planning and waste management.

The VAS applies to individual projects, such as roads, power lines, airports and industrial plants.

The AIA applies to certain installations, such as combustion plants with power greater than 300 megawatts, gas pumping stations, refineries, integrated steel plants, large chemical plants and plants located in the sea.

See also question 3.1.

4.2 What is the process for obtaining environmental permits and approvals? If a permit or approval is refused, can the decision be appealed?

Each of the certifications mentioned in question 4.1 can be requested and obtained according to a particular procedure. Beyond the differences envisaged for each individual certification, the procedure can generally be summarised as follows:

  • filing of the application;
  • preliminary administrative checks;
  • request for additional documents or clarifications;
  • public consultation;
  • (eventual) counterarguments from the proposer;
  • further evaluation; and
  • issuance/denial of authorisation.

In case of denial of authorisation, under certain conditions an appeal can be filed.

4.3 What is the duration of environmental permits and approvals?

This may vary, depending on the permit/authorisation.

4.4 What, if any, requirements and restrictions apply to the transfer of environmental permits and approvals?

This is not possible to assess in general terms; it will depend on the nature of the permit/authorisation.

4.5 What ongoing rights and obligations apply to the holder of an environmental permit or approval?

The holder of an environmental permit/authorisation must comply with the necessary requirements for grant or renewal of the authorisation.

For example, in the case of AIAs, the competent authority will periodically review the AIA to confirm or update the relevant conditions. Depending on the circumstances, this review is carried out within four or 10 years of grant.

4.6 What are the consequences of breach of an environmental approval or permit?

Anyone that carries out an activity without the necessary authorisation, or after the authorisation has been suspended or revoked, may be punished by arrest or a fine.

Unless the fact constitutes a crime, an economic administrative sanction will be applied to anyone that, despite possessing an AIA, does not comply with its requirements or those imposed by the competent authority.

5 Waste management

5.1 How is ‘waste' defined and regulated in your jurisdiction? Does the regime vary depending on the type of waste involved?

‘Waste' is defined as any substance or object which the holder discards or intends or is required to discard. Different definitions are provided for other categories of waste, such as:

  • hazardous waste;
  • municipal waste;
  • construction and demolition waste;
  • organic waste; and
  • food waste.

5.2 What key rights and obligations apply to waste operators in your jurisdiction? What are the consequences of breach?

Waste management takes place in compliance with the following hierarchy:

  • prevention;
  • preparation for reuse;
  • recycling;
  • other types of recovery; and
  • disposal.

Waste disposal must be carried out in safe conditions and constitutes the residual phase of waste management, subject to verification by the competent authority of the technical and economic impossibility of carrying out recovery or recycling operations.

Waste operators must comply with a series of requirements, such as the following:

  • A chronological register of loading and unloading must be kept, in which the quantity of waste produced, the nature and origin of such waste, and the quantity of products are indicated for each type of waste;
  • The abandonment or unlawful disposal of waste is prohibited;
  • Waste must be properly packaged and labelled during its transportation; and
  • A waste identification form must be completed during transport.

5.3 Are any producer responsibility regimes applicable in your jurisdiction?

Yes, waste producers bear financial and/or organisational responsibility for managing that phase of the lifecycle in which a product becomes waste. Any natural or legal person that professionally develops, manufactures, transforms, processes, sells or imports waste products will be subject to this regime. The definition of ‘producer' encompasses not only those entities whose activity produces waste, but also those to which such production is legally referable (the initial producer) or that carry out pre-treatment, mixing or other operations that changed the nature or composition of the waste. For this purpose, a National Register of Producers has been established at the Ministry of the Environment.

The waste producer bears responsibility for the proper recovery or disposal of waste produced. This responsibility endures even when the waste is delivered to intermediaries, traders, transporters or treatment plants.

6 Hazardous substances

6.1 What are the key features of the regulatory regime governing hazardous activities and substances in your jurisdiction?

From a general point of view, Italian law provides for different regimes governing hazardous substances, mainly depending on the nature of the substance.

EU Directive 2011/65 was implemented by Legislative Decree 27/2014, which provides that electronic products placed on the market – including cables and spare parts intended for their repair or reuse, or for updating their functionality or upgrading their capacity – must not fall under a wide list of substances deemed ‘hazardous'. Labelling requirements are also set out.

Specific regulations are also set out on the use and marketing of hazardous substances. Before being placed on the market, whether produced or imported, such substances must be evaluated for their physicochemical, toxicological and eco-toxicological properties in order to identify the danger that they may present to humans and the environment.

6.2 What key rights and obligations apply to operators of hazardous sites in your jurisdiction?

Products must be accompanied by specific technical documentation, duly prepared by the producer, which must retain such documentation for 10 years from the date on which the product is put on the market. Producers must maintain and continually update a technical register of non-compliant products.

With regard to hazardous work premises, an employer must ensure that risk is reduced or minimised through the adoption of specific measures that take into account the design and organisation of processing systems, such as the following:

  • supplying employees with suitable equipment for the specific job;
  • assessing the number of workers who are exposed or who could be exposed to risk factors, and reducing the duration and intensity of exposure to risk factors;
  • adopting appropriate hygiene measures; and
  • using chemical agents only in quantities necessary to perform the work.

6.3 What reporting requirements apply to environmental accidents in your jurisdiction?

Where a product is found to be non-compliant, the producer must alert distributors and, depending on the circumstances, withdraw or recall the product from the market.

Also, depending on the circumstances, the authorities may be obliged to notify the European Commission of the hazardous product or substance through the RAPEX system.

6.4 What is the process for investigating environmental accidents in your jurisdiction?

In addition to the criminal courts, the supervisory authorities in charge of monitoring the compliance of products or substances with the environmental legislation include:

  • the Ministry of Economic Development;
  • the Ministry of the Environment and the Protection of the Territory and the Sea;
  • the Ministry of Health;
  • the Chambers of Commerce, which are often appointed for this purpose by the ministries;
  • the Health Institute; and
  • other administrative bodies expressly instituted for this purpose.

The supervision of import activities is undertaken by the Customs Agency.

Furthermore, almost all of the main sectoral regulations envisage – or better still, reaffirm – the inspection powers by administrative staff with supervisory functions.

6.5 What are the potential consequences of breach of the regulatory regime governing hazardous activities and substances – both for operators themselves and for directors, managers and employees?

The infringement of environmental rules may be deemed as a criminal offence or may be subject to economic administrative fines only.

Depending on the nature of the violation and the liability of the subjects involved, the employer, managers and workers may be held liable in case of non-observance of the rules envisaged for the protection from the risks inherent in dangerous substances.

7 Contaminated land

7.1 What are the key features of the regulatory regime governing contaminated land in your jurisdiction?

If an event that is potentially capable of contaminating a site occurs, the manager of the site must implement the necessary prevention measures within 24 hours and immediately inform the municipality, the province, the region or the autonomous province in whose territory the damaging event has taken place, as well as the prefect of the province; in the following 24 hours, the prefect of the province must inform the minister for the environment.

A preliminary investigation of the territory is then carried out and, if it is ascertained that the contamination threshold concentrations have been exceeded, the manager must immediately inform the municipal authority, providing it with a description of the emergency safety measures adopted. A plan for the recovery of the territory must then be presented to the regional authority, which is entitled to approve it or modify it to provide for the implementation of remediation or operational or permanent safety measures in order to minimise the risk deriving from the state of contamination present in the site.

If the subject liable for restoration of the site fails to do so, the relevant territorial authority may proceed instead, charging the costs to the liable subject.

7.2 Who bears the liability for the clean-up of contaminated land? Can such liability be excluded or subcontracted/delegated?

Unless the fact constitutes a more serious crime, anyone that causes pollution of the soil, subsoil, surface water or groundwater by exceeding the risk threshold concentrations may be punished with imprisonment or a fine; further sanctions may also be applied, such as the confiscation of territory. The ‘polluter pays' principle applies.

7.3 How is liability determined in cases where multiple parties have contributed to the contamination?

If civil or administrative liability has arisen, there will be joint and several liability. In the event of criminal responsibility, the rules on the concurrence of offences will apply.

7.4 Can individuals bring proceedings against polluters, landowners and/or occupiers where they have been affected by contamination? If so, which court/tribunal is competent to deal with such proceedings?

The procedures for safety and environmental remediation interventions may also be commenced at the initiative of non-responsible interested parties.

More precisely, the owner or manager of an area who detects an actual threat of the contamination threshold concentrations being exceeded must notify the region, the province and the municipality accordingly, and implement preventive measures. Once the authority has received such notification, it will take action to identify the subject responsible in order to initiate the remediation interventions. However, the owner or other interested party is entitled to intervene voluntarily at any time to carry out the necessary remediation interventions at the site.

Anyone affected by contamination is entitled to promote or intervene in criminal, civil or administrative proceedings; the evaluation of the relevant competent court shall be made on a case-by-case basis.

8 Reporting, auditing and disclosure

8.1 Are any public registers of environmental information maintained in your jurisdiction? If so, what are they, who can access them and how? What possibilities exist for third parties to access environmental information and what is the process for doing so?

There are many public environmental registers, which include the following:

  • The national electronic register for the traceability of waste is held at the Ministry of the environment and includes:
    • a personal data section, including the data of environmental operators and their relevant authorisation for the exercise of activities relating to waste management; and
    • a traceability section, including environmental data relating to the fulfilment of obligations under the environmental legislation and the routes of the means of transport; and
  • The Register of Environmental Managers contains the details of professional entities or companies that collect or transport waste, for which registration is mandatory.

8.2 What environmental reporting requirements apply to companies in your jurisdiction?

Italian law contains numerous provisions on reporting requirements and the exchange of information, which vary depending on the nature of the activity carried out by the company. As an example, see question 8.1 regarding the national electronic register for the traceability of waste.

8.3 Are companies in your jurisdiction subject to environmental audit requirements?

This depends on the relevant legislation applicable to the activity carried on by the company.

If an audit is carried out, as a general rule, the environmental auditor will verify the company's environmental management system according to the indications set out in the applicable regulation. The audit will involve the following steps:

  • assessing the suitability of the company's environmental policy to its nature, size, products and services, and to the environmental aspects of its activities;
  • evaluating the effectiveness of procedures aimed at identifying and assessing the environmental aspects of the company; and
  • assessing the environmental performance of the company.

8.4 When and how must environmental issues be disclosed (eg, in the event of the potential sale of land or a merger or acquisition)?

This is not possible to assess in general terms and will depend on the kind of asset and deal.

9 Tax

9.1 What environmental and climate taxes are applicable in your jurisdiction?

Recent legislative initiatives in this regard include the so-called ‘plastic tax', which provides for the introduction of a tax of €0.45 per kilogram of plastic material categorised as ‘MACSI' – that is, single-use products whose function or intended function is to contain, protect, handle or deliver goods or food products, with the exception of compostable products, medical devices and MACSI used to contain and protect medicines. The aim is to disincentivise the use of plastic material.

9.2 Are any exemptions or incentives available?

In the context of the plastic tax, compostable MACSIs are excluded from the application of the tax; as are containers of medicines and medical devices.

Between 1 January 2020 and 31 December 2020, companies could avail of a tax credit of 10% on expenses incurred for technological adaptation aimed at the production of compostable products.

9.3 What strategies might parties consider to mitigate their environmental and climate tax liabilities?

Systems aimed at preventing the commission of environmental crimes are defined as ‘environmental management systems'. They can be prepared in accordance with:

  • certified standards – that is, sets of voluntary tools that promote the conscious commitment of companies to comply with industry regulations and to develop internal methods aimed at continually improving their environmental performance; or
  • the Eco-management and Audit Scheme, a European instrument that ensures an economic return in the form of subsidies to member organisations and companies.

These models ensure the promotion of transparency and effectiveness of forms of governance and resource management.

10 Insurance

10.1 What types of environmental insurance arrangements are put in place in your jurisdiction? Is there any mandatory environmental insurance in your jurisdiction? How sophisticated is the environmental insurance market? What, if anything, is excluded from insurance cover?

As yet, insurance contracts specifically designed for the protection of the environment or climate change are not compulsory in Italy and are not widely availed of. It is estimated that such contracts have poor market penetration (less than 10%); most companies are insured against environmental damages only as an extension coverage to accidental pollution and just 1% of enterprises have undersigned a policy specifically dedicated to environmental risks.

10.2 What are the ‘green finance' arrangements in your jurisdiction? To whom do they apply? What, if any, obligations do they impose? Who is responsible for monitoring, enforcing and reviewing such arrangements in your jurisdiction?

Despite significant interest in ‘green finance, the European Union and Italy still face critical issues in this regard, mainly due to uncertainty about the environmental sustainability of the different types of investments and economic activities.

However, in June 2020 the European Union adopted a regulation to establish a regulatory framework to facilitate sustainable investment. This regulation represents the cornerstone of the EU Action Plan for Sustainable Finance, as it will form the basis of several upcoming legislative interventions, such as the EU green bond standard. Through these rules, the European Union aims to guarantee investors greater transparency, and therefore security, regarding the ‘green' label assigned to certain financial instruments.

With specific reference to Italy, the Directorate-General for Sustainable Development of the Ministry of the Environment, in collaboration with the United Nations Environment Programme, launched the National Dialogue on Sustainable Finance. The regulator of the Italian securities market, the Italian Companies and Exchange Commission, is currently monitoring developments in green finance, which remains a very fluid topic.

11 Disputes

11.1 In which forums are environmental and climate change disputes heard in your jurisdiction?

It depends on the nature of the infringement:

  • If a criminal offence has been committed, the criminal courts have competence; or
  • If administrative consequences have arisen from a breach of the environmental legislation, the administrative courts have competence.

11.2 What issues do such disputes involve?

A wide range of issues can result from the breach of an environmental provision, from health damages to economic damages, both for individuals and for companies.

The fundamental characteristic of liability for environmental damage is that liability arises not only in case of negligent or wilful misconduct, but also when there is a violation of the law, of regulations or of administrative provisions, notwithstanding the evaluation of other elements.

11.3 What defences and indemnities are available, both for corporates and for individuals?

This depends on the nature of the right violated. As a general rule, the damaged individual or company can mainly be restored through compensation for damages and/or restoration of the situation that existed before the infringement.

An exemption from administrative liability of an entity or company is envisaged if it is possible to demonstrate that an effective organisational management model has been adopted and successfully implemented, and remains operational.

11.4 How are environmental disputes resolved?

Environmental disputes are mostly brought before the courts; although in certain cases, alternative dispute resolution methods may be availed of.

11.5 Have there been any recent cases of note?

The Ilva case, concerning Europe's largest steel plant, located in southern Italy. The case dates back to 2012 and remains ongoing.

The Taranto Prosecutor's Office ordered the closure of the steel plant and the arrest of its managers, due to serious environmental violations that led to the deaths of hundreds of people. The charges related to:

  • culpable and wilful disaster;
  • poisoning of food substances;
  • wilful omission of precautions against occupational accidents;
  • aggravated damage to public goods;
  • spilling and dumping of dangerous substances; and
  • air pollution.

12 Trends and predictions

12.1 How would you describe the current environment and climate change landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Several weeks ago, Prime Minister Mario Draghi took office in Italy. In one of his first speeches, he highlighted the need for new environmental and climate reforms, and emphasised the link between climate change, environmental devastation and COVID-19.

Former Prime Minister Giuseppe Conte paid little attention to environmental issues and his draft recovery plan lacked provisions on the environment and the protection of biodiversity. By contrast, Draghi seems to be keen to take effective actions in this regard.

13 Tips and traps

13.1 What are your top tips for smooth environmental and climate change compliance in your jurisdiction and what potential sticking points would you highlight?

Due to its geographical location, Italy has excellent solar energy potential for both electricity and heat generation. Italy should embrace this opportunity to reduce greenhouse gas (GHG) emissions and its dependency on imported fossil fuels,

The existing railway infrastructure could be further expanded to accelerate the shift from road and air to rail. The energy efficiency of the construction sector – which is currently responsible for one-fifth of the country's GHG emissions – could also be improved, especially in Northern Italy.

Italy will probably receive one of the largest shares of the European Union's €750 billion Economic Recovery Fund. The government's draft expenditure proposal is expected to focus on six priorities:

  • decarbonisation of the economy;
  • digitalisation;
  • healthcare;
  • education;
  • infrastructure; and
  • social cohesion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.