This article outlines and discusses some initiatives at local level in the energy and transport sectors flowing from Italy's ratification of the Kyoto Protocol. Future articles will discuss in detail the legal and commercial problems that arise from the Kyoto Protocol for these and other sectors in Italy.

Background

In 2002 the Italian legislature ratified the Kyoto Protocol on Climate Change committing Italy to reduce its emissions of greenhouse gases by 6.5% between 2008 and 2012, as against 1990 levels. To achieve these objectives the Minister of the Environment issued a draft national plan of action which provides [to follow].

In April 2006, Italy ratified the EU Emissions Trading Directive, which instituted a system of trading of emissions of greenhouse gases within the European Union.

In particular, the law provided, pursuant to the EU Emissions Trading Directive, that:

  1. From 1 January 2005 all plants which fall within the scope of application of the Directive may emit CO2 only if authorised by the competent authority; and
  2. The operators of such plants must supply annually, figures for CO2 emissions to the National Committee for managing and achieving the aims of the Directive.

However, the National Registry for Greenhouse Gas Emissions in Italy noted in 2006 that for 2004 the total emissions of greenhouse gases (580.7 million tonnes of CO2 equivalent) had increased by 11.8% as against 1990 levels.

In response, the Minister for the Environment has agreed with the Minister of Economic Development to take action at national and local level, to reduce emissions of greenhouse gases and to reduce the assigned levels for the period 2008-2012 as against the period 2005-2007.

The analysis of the energy and transport sectors below shows a combination of approaches, balancing national and urban policy. In our May Alert1 we analysed how low emissions zones were becoming part of urban climate change policy: the Rome for Kyoto project illustrates this more wide-ranging "federal" approach to greenhouse gas emissions. In last month's Alert we noted that, "cities are becoming the places to deliver new ideas and innovative projects against global warming." 2

Energy

Italian energy policy has both national and local aspects.

Nationally, there is the "Project for industrial innovation on energy efficiency and renewability" introduced in financial year 2007 and onwards. The project, for which €350 million has been allocated, has two purposes: the encouragement of investment in the renewable energy sector, and encouraging the supply of new products which are less environmentally damaging.

To support the renewable energy sector, the Environment Ministry also inaugurated a "Task Force" on 6 December 2007, to stimulate industrial research and development activity in that sector. The emphasis is on the diffusion of concentrated thermo-dynamic solar technology, for which €20 million has been allocated in 2008. The idea is to boost the strategic presence of this resource in Italy.

Alongside the Task Force, four important protocols have been signed by the Ministry for the Environment and by several regions. The purpose is to effect a pilot project for producing electricity from the sun through thermo-dynamic cycles.

Locally, the "Rome for Kyoto Project" (2004-2008) is a notable vehicle for policy development. Although low in financial value (€2.3 million), it has an important task of determining baselines for calculating urban emissions. This means that any reductions in those emissions that are attributable (i.e. take place within the city limits of Rome) can be precisely calculated.

Also, an urban regulatory plan for Rome (in place since 1 November 2005) provides that 30% of the energy needs and 50% of the water production of new buildings should come from renewable energy. As a result, methane re-conversion of thermal plants being installed in civic buildings and carbon centres has accelerated. For newly-built or certain types of civic buildings, there is also a plan to have these powered by photovoltaic plants.

In addition, there is a pilot project, in some areas of Rome, for storing solar energy through photovoltaics, providing both power and heat to buildings.

Transport

In Italy in the transport sector there is also a trend towards promoting less environmentally-damaging transport.

This has three aspects: first, the promotion of alternative and cleaner fuels (liquid petroleum gas - LPG - and methane) for petrol-driven vehicles. Second, switching from private cars to alternative means of transport is encouraged. Third, local projects for "sustainable mobility" in urban areas are being trialled - e.g. "eco-Sundays" (where vehicles are banned from defined urban areas) or "alternate licensing" (where only vehicles with certain licences can be used on particular days). Between 1999 and 2003, approximately €220 million was provided for sustainable mobility for local and regional organisations.

These initiatives are complemented by the Italian Financial Law of 2007. This law tries to connect these initiatives with a policy of encouraging the manufacture of key products necessary for creating sustainable transport. In short, the policies have both demand- and supply-side characteristics.

Locally, the Rome for Kyoto Project has also introduced significant changes in the transport sector, in particular:

  1. The extension of prohibitions on vehicular traffic in limited traffic zones such as the so-called "ZTL";
  2. The requirement to certify gases emitted from vehicles;
  3. The partial limitation of traffic (alternate licensing), except for certain defined vehicles on Sundays;
  4. Incentives for converting private vehicles to alternate fuels;
  5. The extension of underground lines;
  6. The introduction of car sharing and car pooling services; and
  7. Increase in electric means of public transport.

In Milan the local council has also taken action, most recently with the introduction of the "Eco-Pass" which from 2 January 2008 requires vehicles to pay a fee before they can enter into the city.

It remains to be seen whether the combined effects of these initiatives will enable Italy to achieve its Kyoto targets for emissions reductions. The combination of national, regional and local measures is intended to achieve maximum effect. Businesses operating in Italy now need to take into account this complex matrix of laws, regulations, policies and initiatives at all levels. What is apparent however is that Italian national and local government are prepared to legislate to effect far-reaching change to achieve these targets.