In a Nutshell
- Italy’s Long-Term National Climate Strategy includes emissions compensated by removals and CCS on the order of 20-40 million tonnes of CO2 to achieve climate neutrality by 2050.
- Italy has specific targets established in the fit-for-55 package and REPowerEU, in addition to reaching at least 55% emissions reduction by 2030.
- Given a relative lack of state support, private companies may hold the key to CDR in Italy, in addition to plans to create extensive transborder CO2 flows and storage capacity.
- With a new prime minister in office since 2022, the nascency of CDR presents the opportunity to design new legal and policy frameworks that can substantially shape the industry in coming years.
Role for carbon removal in national climate policy
As with other member states, Italy is beholden to Europe’s climate neutrality by 2050 target and stands to build upon this goal with its own target that should be more ambitious. Italy currently generates 11% of the European Union’s greenhouse gas (GHG) emissions. It has seen some of the most rapid decrease among EU member states since 2005, having decreased its total net GHG emissions by almost 30% as of 2020.
According to a document by the energy ministry, current policies would cut emissions in the sectors covered by the Effort Sharing Regulation by 35-37% versus 2005 levels. This is far below the target of 43.7% by 2030 earmarked for Italy under EU Climate Law.
Italy’s Long-Term Strategy establishes a carbon neutrality goal by 2050. In their scenario, the remaining emissions will be compensated by removals and carbon capture and storage (CCS). In the strategy, an estimated 20-40 MtCO2 must be compensated to reach the country’s 2050 goal, which will therefore require the deployment of negative emissions technologies. Bioenergy’s potential when paired with carbon capture and storage (BECCS) and direct air capture (DAC) is highlighted. Biochar and enhanced weathering receive indirect mention, but no CDR method includes specific targets. The strategy designates natural or biogenic sinks to remove 45MtCO2e in 2050. The stated ambition on the above has yet to be translated into national projects dedicated to removals.
Finally, the draft updated National Energy and Climate Plan (NECP) highlights “geoengineering” as a sector of priority in terms of research, development and innovation. In the plan, CCUS is labelled as crucial for limiting emissions, especially for hard-to-abate industries. Specific targets for CCS will be established based on the geological characteristics of the relevant storage sites. Carbon capture, transport and storage facilities are explicitly included in the list of infrastructure needed to achieve the NECP objectives through Decree-Law 76/2020 and Decree-Law 77/2021.
Relevant legal frameworks
The Italian regulatory framework is currently being updated to speed up the authorisation process, define technical requirements for transport and storage and define the business model for CCS. However, Italy has yet to build a proper domestic climate law.
In April 2023, the European Commission selected Rome to achieve two objectives of the European Green Deal: climate neutrality by 2030 and zero emissions by 2050. Rome is due to get EUR 191.5 billion through 2026 from the EU Recovery and Resilience Facility (RRF). But Italy is falling short of its designated “targets and milestones” that trigger the release of the funds, having only spent EUR 25.74 billion of the almost 67 billion received so far, based on end-February data. Reasons for this delay stem from the country’s elephantine bureaucracy in addition to supply bottlenecks and the rising costs of raw materials and supply bottlenecks.
Legislative Decree 162/2011 provides the legal framework around geological CO2 storage in Italy and specifically defines the competent authority and monitoring and reporting obligations.
Internationally, Italy plans to ratify amendments to Article 6 of the London Protocol and summarise bilateral agreements between France and Greece on the details of transboundary transport of CO2. Ratifying the amendments to Article 6 is key to enabling under-seabed geological storage. There are plans to develop projects for permanent geological storage under the seabed.
The Directorate General of Forestry, created in 2017 under the Ministry of Agriculture, Food Security and Forestry, is responsible for developing the legal frameworks surrounding forestry. Article 45 of Law No 41 of 21 April 2023 established a public register of national agroforestry carbon credits generated on a voluntary basis. Currently, only forestry sector credits are assessed; other practices such as soil carbon are pending technical reviews.
Support for R&D and Innovation
Several carbon capture and storage (CCS) projects are under development in Italy. Some specific projects include Callisto Mediterranean CO2 Network, Augusta C2, and the Prinos CO2 storage project. Callisto and Prinos have been granted Projects of Common Interest status. Eni has also announced a CCS Project with Italy’s gas grid operator Snam (SRG.MI). The Eni-Snam partnership would be the first CCS project in Italy, offshore from the city of Ravenna. The group’s goal is to achieve a total annual storage capacity of 30 million tonnes of CO2 by 2030 through projects under development not only in the United Kingdom but also in Italy, Libya, Australia and Egypt. Together with France and Greece, Italy is planning to support the development of CCS infrastructure within the scope of the Trans-European Network for Energy (TEN-E) Regulation, designed to enhance synergies on liquefaction, transport and storage of CO2.
Several private companies are emerging in the CDR sector in Italy. Climeworks has opened a pilot direct air capture (DAC) facility in Troia, capable of removing 150 tonnes of CO2 per year. CarpeCarbon is the first Italian DAC company. Limenet is developing a technology to store CO2 in seawater in the form of calcium bicarbonates and aims to become an international player in CO2 storage through this technology.
In terms of funding, the Fund for Sustainable Growth could provide funding to CDR projects. The National Plan for Recovery and Resilience funds Italy’s green transition, a share of which could potentially be directed towards CDR. EUR 1.92 billion is dedicated to biomethane development. Biomethane production could be coupled with CCS and thus be considered CDR.
The National Recovery and Resilience Plan also states some measures linked to CDR, such as sustainable agriculture, protection of land and water, but does not mention industrial removals. Harvested Wood Products (HWPs), whose carbon stocks are included in the Italian National Forest Accounting Plan (NFAP), could harness durable CDR potential for biogenic emissions. In the EU legislation, art. 9 of the EU regulation 841/2018 requires the accounting of HWPs. The NFAP details the contribution in terms of carbon stock potential of HWP, the methodology for which is the Production Approach in the case of the Italian NFAP.
On the horizon
Despite mentions of carbon management pathways, including CCS and CDR, in communications such as the Long-Term Strategy, Italy has yet to publish concrete, binding targets for removals. The relative nascency of CDR legal and policy frameworks could be substantially shaped in the coming years. However, Meloni’s right-wing populist party, Brothers of Italy, was elected in 2022, and its allies have demonstrated scepticism over climate change, often characterising the green transition as ideologically biased.
The draft updated NECP mentions that specific targets for CCS will be presented in the final updated version of the NECP, due in June 2024.
- Net zero target: 2050
- Net Negative Target:
- First interim target: 2030
- Type of interim target: Emissions reduction target
- GHGs covered: Carbon dioxide and other GHGs
- Separate target for emission reduction and removals: No
- Comprehensive CDR Target: no
- CDR Target for Conventional Removals: no
- CDR Target for Novel Removals: no
- Historical emissions: No
- Annual reporting mechanism: Annual reporting
- Plans for carbon removal (CDR): Yes (nature-based and CCS-based removals)
- Planning to use external carbon credits: No
- Conditions on use of carbon credits:
Ministry of the Environment and Energy Security (MiTE): Established in 2021 by folding responsibilities for energy, climate, and environmental into one ministry. The MiTE is also charged with implementing environmental policy and promoting good environmental practices, including the promotion of climate education in schools. At the international level, MiTE holds a vital role in the management and distribution of EU funds. It aims to integrate energy and climate policies and advance the objectives of the green transition to a low-carbon economy in all the ministry’s activities.
Several other ministries have energy- or climate-related competences, such as the ministries responsible for transport and infrastructure, agriculture, and education, university and research (The Ministry of University and Research, or MUR), the latter which channels funds for energy research and development.
The Inter-ministerial Committee for Economic Planning and Sustainable Development (CIPESS): a collective governmental body chaired by the Prime Minister. Responsibilities include the cross-national coordination of policies to achieve the Sustainable Development Goals, govern overall research and innovation to ensure alignment with policy objectives, including the National Research Programme and public research institutions whose work is relevant to SDGs.
The National Agency for New Technologies, Energy and Sustainable Economic Development (ENEA) is a public body designed to support research and technological innovation in addition to promoting advanced services in the energy sector, the environment, and sustainable economic development.
The Research on Energy Systems (RSE, Ricerca sul Sistema Energetico) is an institution leading on public energy research, development, and innovation.
The Inter-ministerial Committee for Ecological Transition (CITE, Comitato Interministeriale per la Transizione Ecologica), established in 2022, synchronizes policies across related ministries in line with long-term ecological transition goals. One of its roles was to publish the Ecological Transition Plan and continuously review its implementation.
The Higher Institute for Environmental Protection and Research (ISPRA) and ENEA provide statistical, technical and scientific support for environmental protection, sustainable economic development, and green transitions in the energy sector.
The state-owned Manager of Energy Systems (GSE, Gestore dei Sistemi Energetici) promotes energy efficiency awareness and supports renewable energy sources and electricity by providing financial support through, for example, energy efficiency incentives. With the support of ENEA, and the Ministry of the Environment and of Energy Security, GSE oversees and certifies the energy savings generated under the ‘white certificate scheme’.
The Italian state holds around a 30% stake in four key companies in the oil, gas and electricity markets: Snam S.p.A, the gas transmission system operator (TSO); Terna S.p.A., the electricity TSO; Eni, which is the largest player upstream, wholesale and retail sector; and Enel, which accounts for the largest individual share of electricity production and over one-third of electricity sales.