<table><caption>Figure IT5. Relevant laws on renovation and energy retrofitting in Italy, author's elaboration.</caption><thead><tr><td>Law</td><td>Title</td><td>Main Contents</td><td>Linked to EU Directives</td><td>Binding Provisions</td></tr></thead><tbody><tr><td>Law 373/1976</td><td>Norme per il contenimento del consumo energetico per usi termici negli edifici / Provisions for the containment of energy consumption for thermal uses in buildings</td><td>First national law on building energy consumption. Introduced mandatory thermal insulation for new construction and major renovation, and documentation certifying compliance.</td><td>No</td><td>mandatory thermal insulation standards and documentation</td></tr><tr><td>Law 457/1978</td><td>Norme per l'edilizia residenziale / Provisions for residential buildings</td><td>Defined types of interventions in existing building stock (maintenance, restructuring, etc.).</td><td>No</td><td></td></tr><tr><td>Law 449/1997</td><td>Legge finanziaria per il 1998 / Budget Law for 1998</td><td>Introduced first fiscal incentive for residential renovation (41% tax deduction), but not specifically for energy efficiency.</td><td>No</td><td></td></tr><tr><td>Legislative Decree 192/2005</td><td>Attuazione della direttiva 2002/91/CE relativa al rendimento energetico nell'edilizia / Implementation of Directive 2002/91/EC on energy performance in buildings</td><td>Introduced mandatory energy performance standards for new buildings and major renovation, introduced EPCs (APE), nZEB for new buildings (public sector: 2018, others: 2021)</td><td>Yes – 2002/91/EC</td><td>minimum performance standards and EPCs for new buildings and major renovation, nZEB for new buildings</td></tr><tr><td>Law 296/2006</td><td>Legge finanziaria per il 2007 / Budget Law for 2007</td><td>Introduced Ecobonus (first tax incentive targeting energy retrofit specifically), deductions initially 55%, later 65%.</td><td>No</td><td>compliance of eligible interventions with minimum technical standards</td></tr><tr><td>Legislative Decree 28/2011</td><td>Attuazione della direttiva 2009/28/CE sulla promozione dell'uso dell'energia da fonti rinnovabili / Implementation of Directive 2009/28/EC on renewable energy</td><td>Set national targets for renewable energy share in final energy consumption (17% by 2020) and minimum renewable energy quotas for new buildings and major renovations.</td><td>Yes – 2009/28/EC</td><td>minimum renewable energy quotas in new buildings and major renovations, increased by year</td></tr><tr><td>Ministerial Decree 28 December 2012</td><td>Applicazione delle metodologie di calcolo delle prestazioni energetiche e definizione delle prescrizioni e dei requisiti minimi degli edifici / Application of methodologies for energy performance</td><td>Introduced 'Conto Termico' scheme for smaller-scale retrofit measures (replacement of heating, installation of solar panels, upgrading of building envelopes) by private and public actors.</td><td>No</td><td>no numerical targets, but annual maximum allocation defined</td></tr><tr><td>Legislative Decree 63/2013</td><td>Disposizioni urgenti per il recepimento della Direttiva 2010/31/UE / Urgent measures for implementing Directive 2010/31/EU</td><td>Amended 192/2005; introduced Sismabonus to improve earthquake safety (tax deductions from 50 to 85%)</td><td>Yes – 2010/31/EU</td><td></td></tr><tr><td>Law 90/2013 and Ministerial Decree 26 June 2015</td><td>Conversione e decreto attuativo / Law conversion and implementing decree</td><td>Defined concept of "major renovations" and distinction between first and second level renovations, mandatory nZEB for new and major retrofits since 2015.</td><td>Yes – 2010/31/EU</td><td></td></tr><tr><td>Legislative Decree 102/2014</td><td>Attuazione della direttiva 2012/27/UE sull'efficienza energetica / Implementation of Directive 2012/27/EU on energy efficiency</td><td>Set national energy savings target (20 Mtoe by 2020), introduced mandatory energy audits for large enterprises, 3% annual refurbishment obligation for public building stock</td><td>Yes – 2012/27/EU</td><td>binding national targets, audits, public refurbishments</td></tr><tr><td>Law 160/2019</td><td>Legge Bilancio 2020 / Budget Law 2020</td><td>Introduced Bonus Facciate with 90% deduction for façade upgrades, including insulation; focused primarily on aesthetics.</td><td>No</td><td></td></tr><tr><td>Legislative Decree 34/2020</td><td>Decreto Rilancio / Relaunch Decree</td><td>Introduced Superbonus 110% with mandatory two-class energy improvement, possibility of credit transfer; extended to public housing in a second step</td><td>Yes - EU Recovery and Resilience Facility</td><td>energy performance improvement of two classes</td></tr><tr><td>Legislative Decree 48/2020</td><td>Attuazione della direttiva (UE) 2018/844 / Implementation of Directive (EU) 2018/844</td><td>Promoted nZEB and decarbonisation of the building stock by 2050; established SIAPE.</td><td>Yes – 2018/844</td><td>mandatory national long-term strategy</td></tr><tr><td>Legislative Decree 73/2020</td><td>Attuazione della direttiva (UE) 2018/2002 / Implementation of Directive (EU) 2018/2002</td><td>Set binding national cumulative final energy savings target (51.44 Mtoe by 2030); added retrofit obligations and large enterprise duties.</td><td>Yes – 2018/2002</td><td>cumulative final energy savings target</td></tr><tr><td>Law 101/2021</td><td>Conversione in legge del decreto-legge 59/2021 / Conversion into law of Decree 59/2021</td><td>Established Complementary National Plan (PNC); included €2 billion programme for renovation of public housing (Sicuro, verde, sociale)</td><td>No</td><td></td></tr></tbody></table>
4.2 The implementation process

Several tools for the incentivisation and implementation of energy retrofit interventions have been introduced by national legislation. These include strategic policy documents, tax incentives, other financial instruments, and targeted programmes (mostly regional, national, and European), providing non-repayable grants. The most important tools and their implementation mechanisms will be outlined in the following.

Strategic policy documents

In recent years, several strategic policy documents have been developed at the national level, which entail specifications on energy retrofitting of residential buildings in Italy. These include the long-term renovation strategy in line with the EU's Energy Performance of Buildings Directive, the **Strategia per la Riqualificazione Energetica del Parco Immobiliare Nazionale** (National Strategy for Building Renovation), developed by the Ministry for Ecological Transition in 2021. The document provides a comprehensive overview of the national building stock and the current state of retrofitting efforts. It moreover outlines policies and actions aimed at stimulating retrofitting initiatives across both the public and private building sectors (Ministry for Ecological Transition 2021).

Another key policy document is the Integrated National Energy and Climate Plan (Piano Nazionale Integrato per l'Energia e il Clima – PNIEC), developed by the Ministry for the Environment and Energy Security (Ministero dell'Ambiente e Sicurezza Energetica) in 2024, which entails the country's objectives in terms of climate and energy policies along five dimensions: decarbonisation, energy efficiency, energy security, internal energy market, and research, innovation, and competitiveness. It sets national targets for 2030, including to reaching a 30% share of renewable energy in gross final energy consumption and a 43% reduction in primary energy consumption. Furthermore, the plan acknowledges the importance of the building sector in fulfilling these targets through energy efficiency and retrofitting interventions (Ministero dell'Ambiente e della Sicurezza Energetica 2024).

In a longer-term perspective, the **Italian long-term strategy on the reduction of greenhouse gas emissions** (Ministero dell'Ambiente et al. 2021) – with a time horizon set for 2050 – pursues the objective to reach climate neutrality by 2050. Also here, strong emphasis is put on the building sector. Besides tax deductions (discussed in the following section), the strategy entails obligations to foster renewable thermal energy and to integrate renewable energy sources into buildings, as well as support for municipal investments in energy efficiency measures and district heating systems (European Parliament 2024).

Furthermore, a key policy document, as mentioned, is the National Recovery and Resilience Plan (PNRR – **Piano Nazionale di Ripresa e Resilienza**), Italy's strategic framework within the European Recovery and Resilience Facility (RRF), set up to boost economic recovery after the Covid-19 pandemic. In absolute terms, Italy is the largest recipient of RRF funds, receiving €191,48 billion (26,5% of the total) (European Parliament 2022), and is among the countries with the highest relative allocation (10,79% of its 2021 GDP) (European Commission 2023), reflecting both the country's pressing need and ambition to address longstanding structural deficiencies that predate the pandemic (Wolfring 2023). The PNRR places particular
emphasis on building renovation, allocating €13,95 billion to measures aimed at enhancing the energy and seismic efficiency of residential buildings, implemented under Mission 2: Green Revolution and Ecological Transition, specifically through the Superbonus 110% (M2C3.2) (Governo Italiano 2021). In addition, Italy launched the **National Complementary Investment Plan (PNC)** to supplement PNRR funding in 2021, earmarking €2 billion for the retrofitting of public housing through the *Sicuro, Verde, e Sociale* (Safe, Green, and Social) programme. Overall, upon finalisation (by the end of 2026), the programme targets the energy upgrading of around 4,5 million square metres of public housing, corresponding to about one tenth of Italy's total public housing stock. Around 1,4 million square metres (corresponding to 1/13 of the national public housing surface) will undergo seismic retrofitting, and an additional 450.000 square metres shall be added through the acquisition of new properties (Corte dei Conti n.d.). Funds were distributed to regions based on intervention plans detailing measures, sites, and ownership (by either municipalities or regional public housing providers). The distributed of funds among regions (see Figure IT8) was based on the number of public dwellings, territorial balance, and seismic risk, with at least 50% reserved for southern Italy (ibid.).

<figure><img src="image_61.png" /><figcaption>Figure IT6. NRRP investments in Mission 2 by regions, author's calculation based on ItaliaDomani 2025.</figcaption></figure>
Superbonus 110% projects
(funded through NRRP) by region

<figure><img src="image_62.png" /></figure>

Figure IT7. Number of Superbonus 110% interventions funded through the PNRR by regions, author's calculation based on ItaliaDomani 2025.

Allocation of Sicuro, verde, sociale funds by region

<figure><img src="image_63.png" /></figure>

Figure IT8. Allocation of funds from the Sicuro, Verde, Sociale programme (Piano Nazionale Complementare) by regions, author's calculation based on Annex 1 of DPCM 15 September 2021.

Tax incentives

Several tax deduction programmes have been introduced at the national level in Italy, which usually aim to incentivise residential retrofitting. These programmes operate with similar mechanisms, differing mainly in the deduction rates and the timeframes over which the benefits are applied. Typically, specific details and regulations regarding these programmes are outlined in the annual budget laws, which stipulate their scope, eligibility criteria, and applicable deduction rates for each fiscal year. Key instruments, which have meanwhile been concluded, include the **Ecobonus** (aimed at the upgrading of energy efficiency), the **Bonus Facciate** (targeting façade renovations), and the **Superbonus 110%** (for comprehensive and seismic retrofitting). Other programmes, which are still ongoing, include the **Bonus Casa**, targeting
general residential retrofitting, and the **Sismabonus**, focusing on the reduction of earthquake risks.

For some interventions, the combination of different programmes has been possible (e.g., Ecobonus and Sismabonus), building on the premise that a retrofitting intervention can serve as a point of entry to more profound improvements, leveraging synergies and benefiting from piggyback effects. "The idea behind this combined deduction is to exploit the huge potential for improving the efficiency of the building sector while encouraging the seismic retrofitting thereof, using the same 'trigger point' represented by the deep renovation of the building, thanks to the economy of scale that can be achieved" (Ministry for Ecological Transition 2021, p. 23).

Most recently, the Superbonus 110% programme has marked a leap in scale in terms of tax-incentivised energy retrofitting, resulting in a substantial increase of government expenditure on "housing and community development" in 2021 and 2022 (see Figure IT9). The programme existed from 2020 to 2023 and entailed the reimbursement of up to 110% of the expenses through tax deductions applied to the invested amount, in a period over four or five years after the investment (Cresme et al. 2024, p. 7). The programme faced stark criticism and was discontinued in 2023. The critiques concerned various aspects, with a key issue being that the scheme failed to benefit actors and segments of the housing stock most in need of renovation. Initially designed to address private actors only, the programme was expanded to the public housing sector only upon persistent advocacy from stakeholders within the sector. This delay, along with specific complexities and obstacles in context with the application to public housing (e.g., legal requirements applying to the public sector, for instance, regarding procurement law, along with differing regional legislative frameworks), have resulted in a low factual application of the instrument to the public housing stock, arguably the one most in need of retrofitting. What had the potential to serve as a transformative tool for large-scale public housing renovation ultimately became a missed opportunity (Wolfgring 2024). In 2023, the national Court of Auditors released an assessment highlighting that the Superbonus benefited disproportionately high-income groups, as emerges from an analysis of 2021 income declarations conducted by ENEA (Corte dei Conti 2023). Recent data moreover show that approximately 73% of the buildings involved (representing 33% of the total investments) had been single-family homes and functionally independent units (ENEA 2024a), which may also include second homes. Moreover, regional divergencies emerged from the analysis, with most interventions having been concentrated in northern (and thus typically economically more prosperous) regions (ENEA 2023; Camera dei Deputati 2023). The Superbonus 110% was moreover criticised for its contribution to producing distortive market effects and for significantly increasing the national debt, as it was designed without a funding cap. By May 2024 (when over 95% of the works had been finalised), investments admitted for tax deduction amounted to €117,7 billion Euros (ENEA 2024).
<figure><img src="image_64.png" /><figcaption>Figure IT9. Public expenditure for "housing and community development" (% of GDP) in Italy from 2013 to 2022 (Bricocoli et al. 2024, data from Eurostat).</figcaption></figure>

<table><caption>Figure IT10. Tax incentives on housing retrofit, author's elaboration.</caption><thead><tr><td>Instrument</td><td>Eligible Works</td><td>Deduction Rate</td><td>Eligibility Criteria</td><td>Low-Income Support</td><td>Duration</td><td>Applicable Tenure</td><td>Territorial Diversification</td></tr></thead><tbody><tr><td>Ecobonus</td><td>Energy-efficiency upgrades (e.g. insulation, windows, boilers, HVAC)</td><td>50%-65% (up to 75% for condominiums)</td><td>Taxpayers (individuals, condominiums); works must meet technical efficiency standards</td><td>No</td><td>Ongoing, with yearly extensions</td><td>Private owners, tenants, condominiums</td><td>Yes - technical requirements vary by climatic zones</td></tr><tr><td>Superbonus</td><td>Energy retrofitting + linked works (windows, solar panels, etc.)</td><td>110% (reduced to 70% in 2024, 65% in 2025)</td><td>Primary residence or second homes under specific conditions (no luxury homes), ≥2 energy class improvement; technical certification required</td><td>Indirect (possibility of credit transfer and invoice discount, reducing upfront payment)</td><td>Until 31 Dec 2025 (reduced rates from 2024 onward)</td><td>Owners, cooperatives, public housing providers</td><td>Yes - Special terms for municipalities hit by earthquakes</td></tr><tr><td>Sismabonus</td><td>Seismic improvement works (structural strengthening, anti-seismic upgrades)</td><td>50%-85% depending on seismic class gain (until 31 Dec 2024), 36-50% (2025-2027)</td><td>Buildings in seismic zones 1, 2, or 3; requires seismic class improvement and certification</td><td>No</td><td>extended at reduced rates until 2027</td><td>Owners of residential and productive buildings</td><td>Yes - Only in seismic zones 1-3</td></tr><tr><td>Bonus Facciate</td><td>Renovation and restoration of building façades</td><td>60% (was 90% before 2022)</td><td>Only for buildings in zones A and B (urban areas); works must be visible from public space</td><td>No</td><td>Ended 31 Dec 2022 (no renewal)</td><td>All owners, no income restrictions</td><td>Yes - Only in urban zoning areas A and B</td></tr><tr><td>Bonus Casa</td><td>General renovation (bathrooms, kitchens, floors, electrical, etc.), including anti-intrusion and renewables</td><td>50%</td><td>Any taxpayer, works on existing buildings (not new); annual spending cap (€96,000)</td><td>No</td><td>Ongoing, usually extended annually</td><td>Owners, tenants, usufruct holders</td><td>No</td></tr></tbody></table>
Other financial instruments

Another financial tool promoting energy retrofitting is the **Fondo di Garanzia Mutui Prima Casa** (First Home Mortgage Guarantee Fund), established by law 147/2013 in 2013 (Consap 2025). It can be accessed both for the purchase of buyers' first homes and for energy renovation interventions. It provides a guarantee of typically 50% of the capital for loans related to energy efficiency improvements in residential properties. Specifically, the fund can support interventions aimed at restructuring and upgrading the energy performance of properties designated as primary residences (ENEA 2023). In its most recent extension (2025-2027), the fund addresses vulnerable groups specifically, including persons below the age of 36, single parents with minors, public housing tenants, young couples, and large families (Consap 2025). Another instrument, the **Fondo Nazionale Reddito Energetico** (National Energy Income Fund), was introduced in 2020 (with Delibera CIPE n. 7). It aims at supporting low-income families in reducing energy costs through renewable energy. With € 200 mio., allocated for the period of 2024 to 2025, it subsidises the installation of photovoltaic systems for residential use, addressing households with a low income (with an ISEE<sup>130</sup> below €15.000, or €30.000 for larger households), and targeting primarily southern regions like Abruzzo, Calabria, and Sicily. The fund, managed by the GSE (Gestore dei Servizi Energetici, see chapter 4.4), operates on a revolving basis and is financed through the economic value generated from the withdrawal of electricity which is not self-consumed by the beneficiary, over a twenty-year period. A key aim behind the fund is to pursue social, economic, and environmental objectives in an integrated way while encouraging the adoption of renewable energy sources (ENEA 2023; Ministry for Ecological Transition 2021; GSE n.d.a).

The **Conto Termico** is a fund promoted by the Italian government and administered by the GSE, financed through a small portion of the energy price (Erba and Pagliano 2021). It can be accessed by the public entities, private actors, and businesses, and finances various interventions to promote energy efficiency and the installation of renewable energy systems, including the replacement of heating systems, the installation of heat pumps and solar thermal systems, and the overall improvement of the energy efficiency of buildings. With an annual budget of €900 million (of which €200 mio. earmarked for public entities and €700 for private actors), it provides grants covering up to 65% of eligible expenses. Applications can be submitted directly to the GSE or through an Energy Service Company (ESCO) (GSE n.d.b) (see chapter 4.3). In several cases, the Conto Termico can be complemented by regional contributions, providing further incentives to access the instrument (EcoBonus n.d.).

<footnote n="130">130 *Indicatore della situazione economica equivalente*, an indicator that represents a household's economic situation, considering the income of all household members, their assets, and the household composition using a weighting system.</footnote>
<table><thead><tr><th>Instrument</th><th>Type</th><th>Objective</th><th>Eligible Beneficiaries</th><th>Benefit</th><th>Eligible Interventions</th><th>Support for Low-Income Groups</th><th>Regional Differences</th></tr></thead><tbody><tr><td>Fondo di Garanzia Mutui Prima Casa</td><td>Guarantee fund</td><td>Facilitate access to mortgages for first-time homebuyers (established in 2013)</td><td>first-time buyers, from 2025-2027 restricted to fragile profiles (under-36s, low-income families, single parents with minors, public housing tenants, large families)</td><td>50% public guarantee on mortgage (up to 90% for large families)</td><td>Primary residence mortgage (≤ €250,000)</td><td>Priority access and higher guarantee for households with ISEE ≤ €40,000, under-36s, large families</td><td>No</td></tr><tr><td>Fondo Nazionale Reddito Energetico</td><td>Capital grant</td><td>Reduction of energy costs for low income households; installation of PV systems</td><td>Households with ISEE ≤ €15.000 in energy poverty</td><td>revolving fund dotted with € 100 mio. per year for 2024-2025; fixed grant of €2,000, plus (variable) €1,500 per kW installed</td><td>Installation of photovoltaic system for domestic self-consumption</td><td>Specifically designed for energy-poor households</td><td>Yes, of €100 mio. per year €80 mio. are earmarked for southern regions and islands, € 20 mio. for the rest of Italy</td></tr><tr><td>Conto Termico 2.0</td><td>Reimbursement</td><td>Support renewable heating and energy upgrades</td><td>Public administrations, private individuals, businesses</td><td>40-65% reimbursement on eligible costs; annual budget of €900 mio. (of which €200 mio. for public entities and €700 mio. for private actors)</td><td>installation of renewable energy systems, replacement of heating systems, installation of heat pumps and solar thermal systems</td><td>No</td><td>Yes - some regions co-finance or top up the Conto Termico with regional funds</td></tr></tbody></table>

Figure IT11. Financial instruments regarding housing retrofit, author's elaboration.

## Subnational Policies and Programmes

In addition to the above-mentioned tools, various regions and local authorities have adopted policies and programmes (on an ad-hoc basis as well as more strategically) within the framework of their competencies in terms of territorial and housing policies, to invest in the retrofitting of (typically, the public) housing stock and to promote sustainable housing. Examples include Emilia-Romagna (with, for instance, the *Programma di recupero e razionalizzazione degli immobili e degli alloggi di edilizia residenziale pubblica*), Puglia (*Programma dell'Abitare Sostenibile e Solidale Regione Puglia*), and Tuscany (Wolfring 2024).

<figure><img src="image_65.png" /></figure>

Figure IT12. Timeline of key incentives and programmes of housing retrofit in Italy, author's elaboration.

## 4.3 Size and role of the market

Italy assumes a rather peculiar position in Europe, with **electricity prices** being among the highest on the continent (Deloitte 2015). In 2024, the average wholesale electricity price amounted to around €100 per megawatt-hour, significantly higher than in Germany (€69) or
Spain (€50) (see Figure IT13) (Reuters 2024). A key reason for this is Italy's large dependence on fossil fuels to generate electricity, particularly natural gas: in 2023, fossil fuels accounted for 55% of the country's electricity production, with natural gas accounting for 45%. This, along with the fact that 95% of Italy's gas derives from imports, renders the country highly susceptible to fluctuations in international gas markets (ibid.). Following the EU's sanctions on Russia in 2022, Italy started to replace gas from Russia (formerly its largest supplier) with imports from other sources, at the cost of higher prices. To somewhat mitigate this burden, Italy's government reduced sales taxes and introduced subsidies to support the expansion of renewable energy generation capacity. However, most of the increased costs have fallen on households through higher energy and electricity bills. In terms of retrofitting, higher electricity costs can have both incentivising or adverse effects: on the one hand, they may encourage retrofitting by increasing cost savings and shortening payback periods, rendering investments more attractive as energy savings quickly offset the initial costs. On the other hand, even with incentives in place, high initial costs of investment remain and constitute a barrier for many households.

<figure><img src="image_66.png" /><figcaption>Figure IT13. Power prices in Italy, Germany, and Spain, 2015-2024 (from Reuters 2024, Source: Ember Energy, European electricity prices and costs).</figcaption></figure>

So far, a single national price (PUN – Prezzo Unico Nazionale) has been applied to electricity, a uniform price across the country, calculated as the average price on the electricity market, irrespective of regional variations in production costs or demand. Until 2025, the PUN will be phased out in correspondence with EU directive 2019/944 (the Electricity Directive), aimed at enhancing market integration, increasing efficiency, and better reflecting the real costs of electricity production and distribution in different regions. The PUN will be replaced by zonal pricing, signifying that electricity prices will vary by geographical areas, based on local production costs, demand, and grid conditions (Trio 2024). While this will certainly improve transparency, it might lead to higher costs in areas with less efficient energy production or limited grid infrastructure which may have significant impacts in terms of energy inequality. Reflecting upon what this transition may signify for retrofitting, regional energy cost disparities are likely to influence the extent to which interventions are incentivised or disincentivised. An incentivising effect is to be expected in areas with higher costs, where energy savings have a greater impact. The transition from the PUN to zonal pricing should thus be accompanied by adequate policy measures.
In recent years, average end prices for household **gas consumption** moreover have substantially increased. For households consuming less than 5.000 m³ per year (see Figure IT14), standard offer service tariffs rose by 36,8%, from € 0,604/m³ in 2020 to € 0,826/m³ in 2023. In the same period, free market tariffs (which include commercial offers outside the regulated regime) displayed an even stronger upward trend, increasing from € 0,623/m³ to € 1,057/m³ – a rise of over 69% (ARERA 2023). While the standard offer service is regulated by ARERA (Autorità di Regolazione per Energia Reti e Ambiente), the Italian Regulatory Authority for Energy, Networks and Environment, providing a benchmark price set under national oversight, the free market allows suppliers to define their own tariffs, which are often more volatile and reflect changes in procurement and distribution costs more directly.

<table><thead><tr><th>ANNUAL<br>CONSUMPTION<br>CLASS AND MARKET</th><th>2013</th><th>2014</th><th>2015</th><th>2016</th><th>2017</th><th>2018</th><th>2019</th><th>2020</th><th>2021</th><th>2022</th><th>2023</th></tr></thead><tbody><tr><td colspan="12" style="text-align: center; font-weight: bold;">Less than 5,000 m³</td></tr><tr><td>Standard offer service</td><td>60,2</td><td>56,8</td><td>52,8</td><td>47,7</td><td>48,2</td><td>55,8</td><td>60,4</td><td>51,0</td><td>62,3</td><td>115,7</td><td>82,6</td></tr><tr><td>Free market</td><td>63,7</td><td>62,4</td><td>60,1</td><td>56,8</td><td>56,1</td><td>60,3</td><td>65,5</td><td>62,0</td><td>67,9</td><td>95,3</td><td>105,7</td></tr><tr><td>Differential</td><td>5,8%</td><td>10,0%</td><td>13,9%</td><td>19,2%</td><td>16,5%</td><td>8,1%</td><td>8,3%</td><td>21,8%</td><td>8,9%</td><td>-17,6%</td><td>28,0%</td></tr><tr><td colspan="12" style="text-align: center; font-weight: bold;">Between 5,000 and 50,000 m³</td></tr><tr><td>Standard offer service</td><td>52,2</td><td>44,1</td><td>44,7</td><td>37,8</td><td>39,2</td><td>46,4</td><td>48,9</td><td>39,6</td><td>49,3</td><td>115,8</td><td>75,9</td></tr><tr><td>Free market</td><td>50,9</td><td>47,6</td><td>46,1</td><td>42,8</td><td>43,5</td><td>48,6</td><td>50,9</td><td>44,1</td><td>58,0</td><td>124,7</td><td>89,0</td></tr><tr><td>Differential</td><td>-2,4%</td><td>8,0%</td><td>3,1%</td><td>13,1%</td><td>11,1%</td><td>4,9%</td><td>4,1%</td><td>11,1%</td><td>17,7%</td><td>7,7%</td><td>17,3%</td></tr><tr><td colspan="12" style="text-align: center; font-weight: bold;">Between 50,000 and 200,000 m³</td></tr><tr><td>Standard offer service</td><td>50,5</td><td>41,9</td><td>40,9</td><td>36,1</td><td>36,1</td><td>45,2</td><td>44,9</td><td>36,7</td><td>43,9</td><td>117,2</td><td>84,5</td></tr><tr><td>Free market</td><td>43,9</td><td>41,4</td><td>41,0</td><td>37,0</td><td>36,3</td><td>43,7</td><td>44,7</td><td>37,3</td><td>56,5</td><td>122,2</td><td>85,0</td></tr><tr><td>Differential</td><td>-13,0%</td><td>-1,1%</td><td>0,2%</td><td>2,6%</td><td>0,5%</td><td>-3,4%</td><td>-0,5%</td><td>1,6%</td><td>28,7%</td><td>4,3%</td><td>0,6%</td></tr></tbody></table>

Source: ARERA. Annual survey on energy sectors.

<caption>Figure IT14. Average end prices to household consumers, by consumption class and market type (in c€/m³) (ARERA 2023)</caption>

Economically vulnerable households are eligible for social bonuses on electricity and gas bills, regulated by ARERA and provided automatically since 2021. Introduced in 2009 (for electricity) and 2010 (for gas), the bonuses are funded through a solidarity surcharge on all energy users. Eligibility is based on the economic situation of households (an ISEE ≤ €9.530, increased to € 15.000 in 2023 in light of growing prices). Beneficiaries receive a direct discount on their bills, calculated according to household size, location, and type of energy use. The mechanism is coordinated by the INPS (Istituto Nazionale della Previdenza Sociale, the National Institute for Social Security. In 2023, 4,5 mio. electricity bonuses and 3 mio. gas bonuses were awarded to households, at an estimated amount of € 1,427 bio. and € 716 mio., respectively (ibid.).

Overall, the topic of energy poverty has gained growing attention in the political discourse in recent years in Italy – in line with similar tendencies at the EU level –, particularly since the 2021 energy crisis. An independent observatory on energy poverty, the OIPE (Osservatorio Italiano sulla Povertà Energetica) was established in 2017, with the aim to study and monitor relevant developments in the country (OIPE 2025), predating the creation of the National Energy Poverty Observatory (Osservatorio Nazionale sulla Povertà Energetica) in 2022, in line with EU directive EU/2019/944 (SocialWatt 2023). Energy poverty is primarily addressed through welfare mechanisms – such as the aforementioned social bonus on energy and gas bills – rather than being considered a distinct policy domain. The main institutional actors involved are ARERA, which regulates the bonuses, and INPS, which verifies income eligibility. The Ministry of the Environment and Energy Security (MASE) moreover plays a role in
coordinating broader policy strategies, however, no national strategy on energy poverty exists so far. Several Italian municipalities have moreover introduced complementary measures to address energy poverty at the local level. As of 2025, Milan, for instance, is currently developing a strategic Plan for Contrasting Energy Poverty and Precarity (Piano di Contrasto alla Povertà e Precarietà Energetiche), after having conducted a participatory process on the theme (Comune di Milano 2025). Additionally, several municipalities have provided targeted support for households with arrears on energy bills or have established energy counters to provide assistance in navigating utility bills and accessing subsidies.

Main further elements of the Italian market framework are energy saving obligation schemes – **Certificati Bianchi or Titoli di Efficienza Energetica (TEE)** –, which were introduced in 2001 in line with the EU Directive on Energy Efficiency and became operational in 2005 (Di Santo and De Chicchis 2019; Erba and Pagliano 2021). General rules and annual savings obligations are set by the Ministry of Economic Development, while the GSE is tasked with monitoring the implementation (ENSMOV n.d.). The scheme requires electricity and gas distributors with over 50.000 users to achieve specific annual energy efficiency targets through the implementation or funding of energy efficiency measures (directly or through third parties), which are then rewarded with White Certificates, certifying the energy savings achieved through the measure (which can include building retrofit). Certificates are only granted for "additional energy savings", i.e., savings which "wouldn't have occurred due to legislative, technological, and market developments" (ibid., p. 458). White certificates are tradable, signifying that companies can fulfil their obligations also by purchasing certificates, a process also administered by the GSE (Ricardo n.d.). They are moreover a market-based instrument that is "not selective about technologies or payees" (Pela 2017, p. 15), which entails that no social targeting mechanism nor the use of specific technologies are foreseen in its application.

<figure><img src="image_67.png" /><figcaption>Figure IT15. Key actors involved in the TEE (white certificates) scheme (Ricardo n.d.)</figcaption></figure>

Another market-driven instrument for promoting energy efficiency measures existing in Italy is **Energy Performance Contracting (Contratto di Prestazione Energetica, EPC)**, where
Energy Service Companies (ESCOs) finance and implement energy efficiency interventions and recover their investments through the energy savings resulting from these interventions (Pollo 2017). The Italian ESCO market is considered one of the most developed in Europe (Boza-Kiss et al. 2017), with around 1.500 companies registered as ESCOs, of which around 340 actively operate as such (Skenderi 2023). ESCOs are represented by the ASSOESCO (Associazione Italiana delle Energy Service Company e degli Operatori dell'Efficienza Energetica), the Italian Association for Energy Service Companies (ASSOESCO 2024). ESCOs have generated around € 3,7 bio. in revenues in 2018, of which 35% constituted energy performance contract services, while 42% derived from energy efficiency and consulting projects, and 23% from the sales of white certificates (BPIE 2020). However, while EPC has become more widespread in the commercial sector in recent years, its use is limited so far in the residential sector (ibid.). A study by the Joint Research Centre of the European Commission (2019) identifies several structural and institutional barriers in further developing the ESCO market in Italy. Among these, the limited availability of suitable financing instruments and a general lack of trust on the part of potential clients are named as key obstacles. Further constraints include ambiguities within the legislative framework, the relatively small scale and high transaction costs of projects, and the procedural complexity associated with EPCs (particularly in the public sector). Limitations in technical capacities and resources at the local government level add a further layer of complexity (ibid.). As regards the residential sector specifically, the high degree of fragmentation in property ownership – with widespread individual homeownership – and the absence of large-scale commercial landlords are likely to be significant additional limiting factors. Most recently, however, as part of the PNRR (Mission 7, I.17 – RePowerEU), the “Public Residential Building Energy Efficiency” measure is aimed at promoting energy retrofitting of public housing through projects managed by ESCOs, which submit proposals and receive incentives via the GSE. Eligible interventions must target public buildings with centralised heating systems and achieve at least a 30% improvement in energy efficiency, financed through a mix of non-repayable grants (up to 65%) and subsidised loans (up to 35%) (GSE n.d.c).

There is evidence that ESCOs – through lobbying and intermediary associations, such as the ASSOESCO – have inserted themselves into the policy discourse, attempting to influence policymaking and achieve favourable regulatory frameworks. Industry groups like ASSOESCO have called for regulatory stability and improved access to incentives, stressing that the lack of coherent rules might undermine Italy’s capacity to benefit from the energy transition (AGICI 2025). Such advocacy has contributed to the integration of ESCOs into policy instruments, like the PNRR (GSE n.d.c). Moreover, the evolution of the White Certificate scheme from its introduction in 2001 to today reflects that stakeholder influence has been relevant: its design has been repeatedly revised in attempts to increase the economic attractiveness of the scheme, simplify procedures, and expand eligibility (Di Santo and De Chicchi 2019).

Finally, in recent years, **green mortgages** have appeared as a private financial instrument in Italy - these are loans offered at reduced interest rates to incentivise the purchase of energy-efficient residential property (which must fulfil specific energy qualities, usually being classified in energy categories A and B) as well as renovation measures (achieving energy savings of at least 30%) (ENEA 2023). While not being very widespread in Italy yet, both demand and supply of these loans have increased in recent years, as a study commissioned by Banca d'Italia
(Abate et al. 2024) demonstrates. In 2022, green mortgages have accounted for a total value of €3,5 bio., reaching a share of around 10% of all mortgages in the country (Ansa 2023), a proportion reached also in 2024 (La Repubblica 2024). The analysis moreover shows that Italian banks currently offering green mortgages or planning to do so in upcoming years represent over 90% of the total assets included in the RBLS (Regional Bank Lending Survey), a survey conducted by Banca d'Italia in 2023 (Abate et al. 2024).

Italy moreover is a partner in the **European Energy Efficient Mortgages Initiative (EEMI)**, which aims at providing a standardised framework for green mortgages across Europe. The EEMI has established national market hubs in various European countries, among which Italy, with the aim to investigate the implementation of energy efficient mortgages across different European jurisdictions (EEMI n.d.).

4.4 The multi-level governance process

Energy retrofitting in Italy is operated through a multi-level governance framework encompassing the European, national, regional, and local levels. Italy has aligned to the overarching EU legislative and policy framework – primarily the Energy Performance of Buildings Directive (EPBD) and the Renewable Energy Directive – through the stipulation of various laws and decrees (as outlined in chapter 4.1). Furthermore, Italy has (and continues to) benefit from EU funds for energy retrofitting programmes, first and foremost through the European Regional Development Fund (ERDF) which, in the 2014-2020 ESIF period, has put an emphasis on subsidising affordable housing, with a specific focus on improving energy efficiency. In this period, Italy received € 284 million for investments in housing infrastructure and € 41.3 million for energy efficiency renovations through the ERDF (Lakatos 2018).

The **Ministero delle Infrastrutture e dei Trasporti (MIT)** (Ministry of Infrastructure and Transportation) is a key actor at the national level as it defines, funds and coordinates housing policies and programmes. As the main ministry with competences on urban planning and housing, it sets the overall legislative and policy framework for both new developments and renovation strategies in private and public housing which are targeting the enhancement of energy efficiency as a core objective. Another key actor is the **Ministero dell'Ambiente e della Sicurezza Energetica (MASE)** (Ministry of the Environment and Energy Security) which defines national policies on environmental and energy-related themes as well as technical standards and administers the implementation of the National Energy and Climate Plan. Another important stakeholder is the **ENEA (Agenzia nazionale per le nuove tecnologie, l'energia e lo sviluppo economico sostenibile)**, the National Agency for New Technologies, Energy, and Sustainable Economic Development – a public entity subject to oversight by the MASE, acting as the national point of reference for energy retrofitting. Its tasks include research and development, the collection of data and provision of information on relevant developments in the respective sectors. It moreover provides support to the national government in designing and implementing policies, as well as in managing specific programmes (ENEA 2024b). In 2016, ENEA developed the **SIAPE (Sistema Informativo sugli Attestati di Prestazione Energetica)**, the national database (established with Interministerial Decree of 26 June 2015) for collecting energy performance certificates (APEs), supplied with data provided by the regions (Ministry for Ecological Transition 2021). In 2023, the database contained over 5 million APEs, most of which (4,4 mio., 87%) concern the
residential stock, providing thus valuable insight into the energy performance of the country's housing stock (Cresme et al. 2024). Moreover, a key auxiliary actor at the national level is the **Gestore dei Servizi Energetici (GSE)**, a state-owned company (owned by the Ministry of Economy and Finance and overseen by the MASE) established in 1999 with the aim to promote the development of renewable energy and energy efficiency (MASE 2024b). This entails, for instance, the management of incentives and funding mechanisms, such as the Superbonus 110% and the Conto Termico.

**Regional governments** are responsible for applying national laws to regional contexts and overseeing their implementation, while they furthermore have specific mandates over housing policies and territorial governance. They have the possibility to exceed national standards by developing additional energy efficiency policies, more stringent building codes, or further incentives according to political priorities (for instance, the establishment of and provision of funding for specific renovation programmes). Furthermore, some regions have introduced the possibility of increasing building volumes when retrofitting of residential buildings is provided (Bonifaci and Copiello 2018). Regional governments are moreover tasked with the distribution of EU and national funds earmarked for regional energy retrofitting programmes. Moreover, some regions have defined comprehensive energy and climate policies and developed respective strategic plans; these include, among others, Lombardy (with the Programma Regionale Energia Ambiente e Clima – PREAC, Regione Lombardia 2024), and Emilia-Romagna (Strategia Regionale Agenda 2030 per lo sviluppo sostenibile, Regione Emilia-Romagna 2024).

At the local level, **municipalities** are responsible for issuing construction permits and overseeing compliance with regional and national regulations. Similarly to regions, it is at the single municipalities' discretion to design priorities according to political and strategic objectives – and thus, for instance, to develop tailor-made local retrofitting policies and programmes (an example for which has been the "Mille Case per Bologna" programme, Wolfgring 2024). Cities can moreover choose to adhere to voluntary policy initiatives such as the "Covenant of Mayors for Climate and Energy", which aims to encourage and support municipalities in the development and implementation of comprehensive strategies to adapt to climate change (European Commission n.d.a).

Access to housing, housing costs and housing affordability, if ever, are managed by the welfare departments of public administrations and operate largely independently from retrofitting policies. As a result, these policy areas are rarely aligned, with little political or operational overlap (Bricocoli et al. 2025). For instance, first data and qualitative insights on the uptake of the Superbonus scheme indicate that the instrument has not benefited those most in need of economic support and has instead favoured already economically well-off regions (as no positive discrimination mechanisms in favour of low-income groups or disadvantaged areas were implemented). Beyond the "spatially generic" approach of retrofitting bonuses, as identified by Daglio and Zanfi (2023), there is also a clear social blindness in the design and implementation of these policies. Overall, the impacts – both positive and negative – of retrofitting policies on housing (in)equalities in Italy remain largely unexplored, having only recently become a subject of academic interest, while still being largely absent from the policy sphere.
Overall, in Italy, horizontal governance remains a key challenge, with limited strategic alignment between housing, ecological transition, and welfare policies. This disconnect is visible in the lack of coordination between retrofit interventions and housing affordability policies, which are typically governed and implemented by separate institutional actors and without shared instruments. Moreover, cooperation between municipalities is largely voluntary and varies widely: while some cities (such as Milan and Reggio Emilia) have attempted to align their climate strategies through international frameworks like the Covenant of Mayors, others lack formal mechanisms of exchange.

<table><caption>Figure IT16. Key actors and tasks in the governance of housing retrofit, author's elaboration.</caption><thead><tr><td>Actor</td><td>Scale</td><td>Type</td><td>Role + Function</td></tr></thead><tbody><tr><td>Ministero delle Infrastrutture e dei Trasporti (MIT)</td><td>National</td><td>Public (political + technical)</td><td>Defines, funds, and coordinates housing and retrofit policies and territorial planning framework; sets national legislative framework</td></tr><tr><td>Ministero dell'Ambiente e della Sicurezza Energetica (MASE)</td><td>National</td><td>Public (political + technical)</td><td>Responsible for environmental and energy policies; oversees National Energy and Climate Plan; oversees ENEA and GSE</td></tr><tr><td>ENEA (Agenzia Nazionale per le Nuove Tecnologie, l'Energia e lo Sviluppo Economico Sostenibile)</td><td>National</td><td>Public (research + implementation)</td><td>National point of reference for energy retrofitting, research and development, data collection, policy support to the government; manages SIAPE database; supports programme implementation</td></tr><tr><td>GSE (Gestore dei Servizi Energetici)</td><td>National</td><td>Public (state-owned company)</td><td>Manages incentives and funding (e.g. Superbonus, Conto Termico); promotes energy efficiency</td></tr><tr><td>Regional Governments with various setups (departments for housing policies, territorial governance, energy and environmental policies)</td><td>Regional</td><td>Public (political + technical)</td><td>Implementation of national laws and policies; stipulation of regional laws and policies in terms of housing, territorial governance, regeneration; design of regional programmes; programmation and distribution of national and EU funds</td></tr><tr><td>Municipal Governments with various setups (departments for housing, urban planning, welfare)</td><td>Local</td><td>Public (political + technical)</td><td>Implementation of regional policies; urban planning; issuing of permits and ensuring of compliance; administration of welfare support; design of local policies and programmes; can join voluntary frameworks like Covenant of Mayors</td></tr></tbody></table>

## 4.5 Achievements, assessments, and challenges

Over the past three decades, Italy has implemented various policies and programmes aimed at improving energy efficiency in the residential sector, with some positive results. While comprehensive data regarding the overall extent of interventions and investments during this period is not available, the fact that a substantial share of the country's residential stock is still in the lowest energy performance classes highlights that a lot remains to be done. As stated in the *Strategia per la Riqualificazione Energetica del Parco Immobiliare Nazionale* (Ministero
per lo Sviluppo Economico et al. 2020), the prospective annual retrofitting rate in the residential sector has been set for 1,2% for the period of 2030-2050 (an increase compared to 2020-2030, where it has been set at 0,8%). A substantial increase in the mid- to long-term is evidently required to ensure that decarbonisation targets can be achieved.

Concerning the various "bonus edilizi" (like the Ecobonus, Superbonus, etc.), Zanfi et al. (2021) have highlighted that while their implementation has overall produced some positive results, interventions funded through these bonuses have generally been small-scale and sporadic. Deep, comprehensive retrofitting, which could improve energy efficiency and contribute to broader sustainability goals more substantially, has been rare. The authors moreover stress that these programmes have been distributed indiscriminately, without consideration for setting priorities and for specific regional or local contexts. This has resulted in investments being concentrated in economically advantaged regions with robust real estate markets and more proactive recipients, which risks exacerbating territorial inequalities by failing to address disadvantaged areas and the more energy-inefficient housing stock. To address this shortcoming, Zanfi et al. (ibid.) suggest adopting a more territorialised and targeted approach to financing retrofitting instead of the current "spatially generic" approach, in order to guarantee a more efficient and rational way of allocating public resources. They moreover recommend integrating these schemes with policies aimed at addressing social, economic, and environmental inequalities.

This reflects one of the key elements of criticism of retrofitting schemes, namely that they perpetuate social inequity among the recipients. In line with this, researchers (Daglio and Zanfi 2023; Bricocoli et al. 2025) have pointed out that the available instruments have had a limited impact on the residential stock most in need of renovation, thus failing to address systemic issues effectively. More in general, this concerns the country's public housing stock, a segment long neglected in terms of targeted and comprehensive retrofitting. Only in recent years, this issue has received growing attention at the political agenda, and some programmes have been set up accordingly (Wolfring 2024) (for further details, see also chapter 6 on densification).

Other issues contributing to the limited success of retrofitting interventions on a broader scale stem from the lack of convergence and effectiveness of legislation and incentives, as highlighted by Daglio and Zanfi (2023). Moreover, small-scale governance issues, such as fragmented ownership within condominiums, have significantly hindered collective decision-making processes required for renovations (Bricocoli et al. 2025). The economic crisis further exacerbated the situation by discouraging long-term investments with delayed returns of 10–20 years (Daglio and Zanfi 2023).

When it comes to private actors, there is limited willingness to adopt new technologies and implement energy-saving measures, particularly in the context of deep renovation. This reluctance is due to various factors: difficulties in accessing credit – as deep renovations usually require significant financial investments – and the inconvenience such renovations cause for tenants, often for an extended period of time (Ministry for Ecological Transition 2021). Daglio and Zanfi (2023) as well as Gentili and Hoekstra (2019) moreover outline that territorial disparities in real estate values have a significant impact on renovation efforts. In less attractive areas (such as inner areas and parts of southern Italy), lower property values discourage owners to invest in retrofitting, as the limited potential for returns through rents undermines the
financial feasibility of such endeavours, further contributing to an increase in properties left vacant.

Another point of criticism regards the fragmentation of instruments and incentives in the retrofitting sector (Bricocoli et al. 2025). The effectiveness of public spending could be significantly improved through the adoption of an integrated, coordinated, and simplified regulatory framework, which would enhance both time and cost efficiency. This would enable to better use the “window of opportunity”, i.e. unavoidable or already scheduled extraordinary maintenance works to which energy efficiency or earthquake protection could be linked” (Ministry for Ecological Transition 2021, p. 48). In line with this, procedures should be simplified, and access to both information, tools, and funding should be improved to make it easier for both citizens and public actors to engage in retrofitting activities (ibid.).

<table><caption>Figure IT17. Summary table on impacts of and potential opportunities linked to energy retrofitting, author's elaboration.</caption><thead><tr><td>Dimension</td><td>Measured Impacts</td><td>(Potential) Negative Effects</td><td>Opportunities</td></tr></thead><tbody><tr><td>Territorial equity</td><td>Substantial investments through recent national schemes: PNRR, including Superbonus and PINQuA (where prioritisation of southern regions exists); PNC (including Sicuro, verde, sociale)</td><td>Concentration of interventions in wealthier regions with strong housing markets (Superbonus); potentially increasing regional inequalities</td><td>Introduce targeted funding criteria benefitting low-income groups and disadvantaged regions</td></tr><tr><td>Beneficiaries</td><td>Superbonus largely reaching middle-class owners; public housing retrofit through specific programmes</td><td>Superbonus: lack of prioritisation for vulnerable households, public housing stock remained largely excluded; low-income and tenant households not significantly reached</td><td>Integration of retrofitting schemes with social policies (e.g., income-based eligibility, support for renters and public housing)</td></tr><tr><td>Scale of renovation</td><td>Mostly small-scale interventions (increase of 2 energy performance classes)</td><td>deep retrofits are rare</td><td>Incentivise deep retrofits through tailored funding and support structures for access and implementation</td></tr><tr><td>Access to financing</td><td>High uptake among actors with large tax capacities, access to resources and information, governance capacities</td><td>Low-income and marginalised households face credit and liquidity barriers</td><td>Provision of public guarantees, targeted subsidies, and simplified access for low-income groups</td></tr><tr><td>Governance</td><td>Recent schemes at the national level (PNRR); additionally fragmented regional and local investments</td><td>Fragmentation of instruments; lack of vertical and horizontal governance</td><td>strengthen horizontal governance at all scales (housing, ecological transition, and social policies)</td></tr><tr><td>Market dynamics</td><td>Incentives (particularly Superbonus) triggered private market activities</td><td>distortive market effects; national debt increase; limited investments in low-demand areas</td><td>combination of retrofitting with broader regeneration, territorial governance and mobility strategies (e.g., in inner and southern areas)</td></tr><tr><td>Public housing retrofit</td><td>recent programmes linked to the PNRR (Sicuro, verde, sociale and PINQuA)</td><td>investments remain insufficient; no strategic perspective post-PNRR schemes</td><td>development of a medium- to long-term strategy at the national scale; strengthening of technical and financial capacities of public housing providers and municipalities</td></tr><tr><td>Information & accessibility</td><td>Creation of national databases (e.g. SIAPE), regional or metropolitan housing observatories</td><td>fragmentation, lack of data, information, and coordination between scales of governance</td><td>Streamlining of procedures, bundling of information at a central level, establishment of local information counters/one-stop-shops</td></tr></tbody></table>
# 5 Nature Based Solutions

## 5.1 The policy cycle: emergence of the issue and policy decisions

In the Italian policy context, the terminology associated with Nature-based Solutions has evolved gradually, reflecting broader European developments. Early planning instruments referred, rather generically, to "public green" ("verde pubblico", as used in Decree 1444/1968), while later on, the concept of "green infrastructure" ("infrastrutture Verdi") became increasingly widespread, particularly after the EU's Green Infrastructure Strategy of 2013 – in its annual report from 2016, the Italian SNPA (Sistema Nazionale per la Protezione dell'Ambiente) dedicated a chapter to the topic (SNPA 2016). The reference to "ecosystem services" ("servizi ecosistemici") emerged in scientific and technical documents – for instance, in a technical report published by the Ministero dell'Ambiente e della Tutela del Territorio e del Mare (2009) – rather than in legislation. The term "Nature-based Solutions" itself appeared in national strategic documents only from the late 2010s onward, including in the Strategia Nazionale del Verde Urbano (2018), the Piano per la Transizione Ecologica (2022), and the Strategia Nazionale per la Biodiversità al 2030 (2023), where NBS are presented as tools for increasing biodiversity and resilience, climate change adaptation, and air quality. This discursive progression – from public and urban green to ecosystem services and nature-based solutions – reflects a gradual shift in Italian policymaking from sectoral greening policies to a more integrated approach of environmental governance (OECD 2023).

Considering Nature-based Solutions (NBS) as actions to protect, manage, and restore natural and modified ecosystems in urban areas, the first key moment in Italy has been the adoption of **Ministerial Decree n. 1444/1968**. The decree, by setting legally binding standards of public services for urban neighbourhoods, states that residential settlements should have nine square meters of "green areas" (including, however, sports facilities) per inhabitant. Several scholars (Barbieri 2008; Moccia and Arena 2021, Laboratorio Standard 2021) have criticised the law for its purely quantitative approach, advocating for a more comprehensive perspective which also considers qualitative parameters. Standards were often applied in new developments, setting the conditions for the creation of large urban parks, especially in new peripheral residential areas, while their application remained largely unmet in existing neighbourhoods. Paradoxically, standards were mostly applied in greenfield developments, as land take figures have remained high throughout Italy in past decades. Between 1989 and 2018, an annual average of 260 square kilometres of green or agricultural land was sealed – as of 2018, 7,5% of the Italian surface is anthropised (Arcidiacono and Ronchi 2021). The annual progression of greenfield development (and thus land take) slowed down from the early 2000s onwards, mainly due to the economic crisis (ibid.).

Another early regulation of relevance has been adopted in 1987, when Italy introduced its first National Forestry Plan (Piano Forestale Nazionale), approved by the **Interministerial Committee for Economic Planning (CIPE) on December 2, 1987**, and developed in accordance with **law n. 752/1986** ("Multi-year law for the implementation of programmed interventions in agriculture"). The Forestry Plan was significant as it was the first national document to acknowledge the sector's specific objectives and distinctiveness, separate from agricultural objectives (CNEL 2000). In 1992, moreover, **law 113/1992** (*Obbligo per il comune*
di residenza di porre a dimora un albero per ogni neonato, a seguito della registrazione anagrafica) stipulated that municipalities with a population of over 15.000 inhabitants must plant a tree for every child newly registered in the civil registry, intended to promote environmental awareness while linking the development of green spaces to demographic changes. While this in principle is a legally binding provision, it lacks effective enforcement mechanisms. The law was later amended with **law 10/2013 (Norme per lo sviluppo degli spazi verdi urbani)**, introducing additional provisions to encourage the development of public green areas. This included the creation of a Committee for the Development of Public Green Areas (the Comitato per lo sviluppo del verde pubblico), with the aim of monitoring and proposing measures and fostering the development of green belts. In 2018, the committee published the National Strategy for Urban Areas (Strategia Nazionale del Verde Urbano), a non-binding strategic document, stressing the importance of urban forestation and other nature-based solutions in a perspective of health and wellbeing of citizens (Ministero dell'Ambiente n.d.).

While, as demonstrated, environmental issues were on the country's political agenda already in the 1980s, they gained more explicit attention in the 1990s, following the adoption of legislation at the EU level. In 1997, Italy transposed Directive 92/43/EEC of the European Council (the Habitats Directive) into national law by **presidential decree 357/1997** (*Regolamento recante attuazione della direttiva 92/43/CEE relativa alla conservazione degli habitat naturali e seminaturali, nonché della flora e della fauna selvatiche*), stipulating the establishment of obligations for the conservation of natural and semi-natural habitats, as well as wild flora and fauna, leading to the creation of the Natura 2000 network of protected areas within Italy. Today, Italy has 2.646 Natura 2000 sites convering a land area of around 5,8 mio. hectares (19,4% of the national territory), and around 2,3 mio. hectares at sea (6,4% of the Italian water surface) (ISPRA n.d.c).

The early 21st century then introduced significant new legislation at the national level concerning the protection of landscapes and the environment, including **Legislative Decree n. 42/2004 (Codice dei beni culturali e del paesaggio - Code of Cultural Heritage and Landscape)**, which mandates regions to set up regional landscape plans (in which regions must identify areas of interest in terms of landscape and define measures for their protection, enhancement, and management), and **Legislative Decree n. 152/2006 (Codice dell'Ambiente - Code of the Environment)**, establishing binding national guidelines for environmental protection, including the sustainable management of natural resources and the promotion of green interventions. In 2010, the EU's Marine Strategy Framework Directive (2008/56/EC) was furthermore implemented in Italy through **Legislative Decree n. 190/2010**, which aimed to achieve and maintain a good environmental status of marine waters by 2020, promoting an ecosystem-based approach to the management of human activities impacting the marine environment.

In the past decade, a series of policy documents concerning environmental issues has been adopted in Italy, touching upon the topic of nature-based solutions. Explicit reference to “green infrastructures”, for instance, is made in the **2017 Bologna Charter for the Environment**, signed by Italian metropolitan cities, and inspired by the 2030 Agenda by the United Nations adopted in 2015 (Gasparrini and Terracciano 2021). Also in 2017, the **National Strategy for Sustainable Development (Strategia Nazionale per lo Sviluppo Sostenibile - SNSvS)** was adopted (and later, in 2022, updated), intended to establish a national reference framework for
the planning and evaluation of environmental and territorial matters (MASE 2022a). Another
important strategic document is the **National Strategy for Biodiversity for 2030** (*Strategia
Nazionale per la Biodiversità al 2030*), adopted by the Ministry for the Environment and Energy
Security (MASE) with ministerial decree n. 252/2023. It defines objectives and actions for the
safeguarding of biodiversity in Italy, emphasising the importance of ecosystem-based
approaches and nature-based solutions to address environmental challenges (MASE 2025).

**The National Plan for the Adaptation to Climate Change** (*Piano Nazionale di Adattamento ai Cambiamenti Climatici – PNACC*) was adopted by the MASE (2023) in the same year, a strategic plan promoting the adoption of NBS as well as ecosystem-based services as important tools of climate change adaptation and for the enhancement of territorial resilience.

The **National Integrated Plan for Energy and Climate** (*Piano Nazionale Integrato per l'Energia e il Clima*), first introduced in 2020 in compliance with EU regulation 2018/1999, and revised in 2024 (MASE 2024c), promotes green infrastructure as carbon sinks and as an important part of the country's strategy for achieving carbon neutrality. Another significant development was the adoption of the **National Plan for the Ecological Transition** (*Piano per la Transizione Ecologica – PTE*) in 2022, aimed at coordinating national policies to guide Italy towards sustainable development, in alignment with the European Green Deal and the United Nations 2030 Agenda (MASE 2024a). The plan explicitly references NBS to enhance the natural character of urban areas, particularly through river and wetland restoration and measures to counter coastal erosion and sets the target of expanding protected green areas from 10,5% to 30% of the national territory and increasing areas under 'strict' protection from 3% to 10% by 2030.

While all these strategic documents are important for promoting environmental goals and tackling climate change, they have no binding legislative power. Hence, despite the existence of innovative national and regional frameworks and instruments, scholars have expressed dissatisfaction with greening policies in Italy, as will be further outlined in the following.

In late 2024, the EU's Nature Restoration Law was adopted, setting binding targets to restore degraded ecosystems with the aim to restore 20% of the EU's degraded ecosystems by 2030 and all by 2050 (European Commission n.d.b). As of February 2025, Italy is in the process of developing its National Restoration Plan (due by September 2026) to comply with the regulation. Moreover, in 2024, Italy created the Italian Network for Ecological Restoration (INER/RIRE) to support the implementation of the Nature Restoration Regulation, bringing together experts from academia, public institutions, businesses, and NGOs (SER Europe 2024).
<figure><img src="image_68.png" /><figcaption>Figure IT18. Timeline illustrating key regulations in Italy affecting NBS, author's elaboration.</figcaption></figure>

<figure><img src="image_69.png" /><figcaption>Figure IT19. Strategic documents including provisions on NBS, author's elaboration.</figcaption></figure>

## 5.2 The implementation process

The implementation and governance of nature-based solutions in Italy is based on a mix of regulatory, financial, and support tools. Regulatory tools, as outlined earlier, are so far limited and fragmented: while planning standards entail the provision of green areas (understood in a broader sense, including also sports facilities), most references to NBS appear in non-binding strategic documents. Financial tools have recently been provided under the PNRR, which allocates substantial funding for urban forestation, ecological restoration, and the
enhancement of biodiversity. Support tools include national strategies (e.g. the *Strategia Nazionale per la Biodiversità al 2030*) and platforms like the NBS Italy Hub, which bundle, provide, and disseminate knowledge and link national policies to wider EU goals. NBS are not integrated into housing policies and thus do not differentiate between housing tenures, resulting in interventions that are tenure-neutral and often disconnected from broader questions of housing equity (Bricocoli et al. 2025).

The implementation of objectives set through strategic documents and plans – often driven by EU agreements, as outlined above – encounters challenges in Italy, especially regarding greening measures. Maggauda et al. (2020, p. 4) argue that “despite the expectations raised by greening as a tool to produce environmental public goods, their territorial allocation is a key problem in Italy. Greening measures have not significantly shaped the Italian context due to land ownership fragmentation and average size generally well below the 10-hectare threshold”. Moreover, as underlined by Arcidiacono and Ronchi (2021), the absence of a broader planning framework beyond the municipal level limits the integration of an ecosystem-service logic into the planning system, which often is only present in the form of recommendations. At the local level, **municipal climate adaptation plans** exist in most major cities – with Bologna having been the first Italian city to develop this document in 2015 (De Luca et al. 2021).

The past decades also saw the proliferation of **citizens' and local initiatives** linked to greening and forestation (such as Alberitalia, Forestami, Mosaico verde, Forestiamo insieme l'Italia, Bosco del Molino, TreeTime, Think Forestry). The first pioneering experience of urban forestry – “Boscoincittà” – was promoted in Milan in 1974, initiated and implemented by thousands of volunteers coordinated by Italia Nostra, an NGO engaged in the protection, promotion and valorisation of cultural heritage (Italia Nostra 2023). “Forestami” is a project promoted by Politecnico di Milano in 2018, foreseeing partnerships with public administrations, private foundations and social cooperatives that so far have planted 45.000 trees covering 20 hectares across the metropolitan city of Milan (Forestami n.d.).

Most recently, the National Recovery and Resilience Plan (NRRP) has dedicated €1.69 billion to the launch of some pilot NBS measures to be completed by 2026 under Mission 2, Component 4 (*Tutela del territorio e della risorsa idrica*). The most relevant are: i) the digitalisation of national parks; ii) the renaturalisation, ecological restoration and reforestation of areas in the Po river valley and Delta; (iii) the conservation and promotion of urban biodiversity in Italy's 14 metropolitan areas; and iv) the conversion to biological or agroecological agriculture of agricultural land in all protected areas. The pursuance of these objectives is supported by additional resources from other programmes (e.g. the “Life” programme) and is therefore expected to continue through 2030 and beyond. Regarding urban biodiversity, the PNRR mainly foresees the planting of between 4,5 and 6,6 million trees in urban forestation actions and the promotion of ecological corridors in the 14 metropolitan areas of the country, through Investment 3.1 – Protection and enhancement of urban and suburban greenery, with a funding of € 210 million (later increased to € 330 million). The “**Plan of Urban and Suburban Forestation**” (*Piano di forestazione urbana ed extraurbana*), dedicated to this objective, was approved in 2021. It includes an investigation of the metropolitan cities, stating that “The feasibility of the entire investment, as well as the feasibility of the objectives that emerged from the National Biodiversity Strategy 2030 and COP26 is evidently linked to the
availability of land" (MASE 2021, p. 62). The plan does not primarily focus on small-scale interventions (such as trees and greening on streets) but prioritises larger-scale afforestation efforts in contiguous areas within the territory of the metropolitan cities. In order to reach a broad territorial coverage (while earmarking 50% of the funds for southern regions, IFEL 2022) all metropolitan cities were strongly invited to submit a minimum of five project proposal foreseeing the afforestation of at least 150 hectares, while pursuing the following principles: the protection of biodiversity to ensure the full functionality of ecosystems; the increase of surface area and enhancement of the ecosystem functionality of green infrastructures within the built environment; and the improvement of citizens' health and well-being. In 2020 and 2021, 72 projects have been admitted for funding, of which 24 in southern regions and islands, 15 in central regions, and 33 in northern regions, supporting the planting of a total of 365.049 trees and shrubs across the national territory (MASE 2021). While the forestation plan focuses on larger interventions, smaller- and medium-sized measures, to be proposed by municipalities, are eligible for funding within the wider framework of the PNRR. Medium-sized fundable public works include the securing of parts of territories at hydrogeological risk; the securing of roads, bridges and viaducts; structural safety and energy efficiency of buildings, with priority for school buildings and other facilities owned by the authority, and of the systems of public lighting. Small-sized fundable public works include the enhancement of energy efficiency of public lighting, publicly owned buildings and public housing, as well as the production of facilities for the production energy from renewable sources; "sustainable spatial development" including interventions in the areas of sustainable mobility, structural safety of schools and other public buildings, and the removal of architectural barriers. Interventions are proposed by municipalities.

While the focus in the provision and funding for and the implementation of NBS is on urban and peri-urban areas, some programmes touching upon NBS exist that target rural areas. One of these, included in the PNRR – under Mission 1, Digitalisation, Innovation, Competitiveness, Culture and Tourism – is the investment on the “Protection and Enhancement of Rural Architecture and Landscape” (Tutela e valorizzazione dell'architettura e del paesaggio rural e”) (M1C3 – I.2.2), funded with €600 million. While not being directed explicitly at ecological recovery, it supports the improvement of rural landscapes, traditional agricultural structures, and the restoration and functional reuse of historic rural buildings. It provides funding for structural repairs, energy efficiency upgrades, and small-scale tourism infrastructure. The programme is open to public, private, and third-sector entities and foresees the completion of 3.900 interventions by 2025 (Ministero della Cultura 2025).

5.3 Size and role of the market

In many cases, new parks and green areas are provided by private developers based either on the requirements defined in the planning standards of Ministerial Decree n. 1444/1968 (as mentioned earlier) and – increasingly – on negotiated planning agreements (such as accordi di programma or accordi urbanistici) between developers or landowners and municipalities, which often include the production of private, public or semi-public green areas. In practice, the fulfilment of requirements determined through planning standards often falls short of the objective to produce public spaces, as green areas are often realised as semi-private enclaves
adjacent to new developments, typically used by residents only and thus offering little benefit
to the wider public.

Overall, while the planning and implementation of NBS remains largely a responsibility of public actors, there is a growing market interest in the topic, accompanied by an increasing involvement by the private sector. A report by Etifor<fnref n="131" /> and the Università degli Studi di Padova (2024, 3) highlights that 45% of (71) surveyed Italian companies acknowledge the risks and opportunities related to climate change and biodiversity loss, indicating a growing corporate awareness for and economic interest in the topic: "The private sector plays a fundamental role in both the loss and protection of biodiversity: Companies contribute to biodiversity loss, but at the same time, they heavily rely on ecosystem services provided by nature. Since 55% of global GDP depends on nature, the private sector has a direct interest in adopting a 'nature positive' strategy". In line with this, nature-based solutions and the incorporation of biodiversity into business planning, the authors stress, can be "a vital asset for long-term economic sustainability", providing "new opportunities for growth and innovation" (ibid., 36). To capture this potential, the authors propose tax incentives, public-private partnerships, and clearer regulatory guidelines (ibid.).

Financial instruments in the field of sustainable business practices include **green bonds**, **sustainability-linked bonds**, and **biodiversity credits** (ibid.). Green bonds, designed to fund projects with an environmental focus (renewable energy, energy efficiency, sustainable mobility, waste management), have already gained significant traction in the Italian market, being also used to support Italy's sustainability commitments within the framework of the EU Green Deal. Sustainability-linked bonds (SLBs) differ from green bonds in that their financial and structural characteristics, such as interest rates, are directly tied to specific sustainability performance targets. Companies issuing these bonds commit to measurable environmental or social objectives, and if they fail to meet their targets, they may face financial penalties. Biodiversity credits, which operate in a similar way as carbon credits, allow businesses and investors to fund projects that achieve measurable biodiversity improvements. While the concept is still emerging in Italy, there is a growing interest in using these credits as a mechanism to finance conservation efforts (ibid.).

The growing interest in nature-based solutions has been accompanied by the emergence of
intermediary actors operating across research, consultancy, and policy (like Etifor, mentioned
above) working with both private companies, public authorities, and academic institutions to
advise on policy frameworks, promote business models, and advocate for fiscal incentives.
Similarly, the Nature-based Solutions Hub (as will be further outlined below) is an intermediary
actor bringing together municipalities, consultants, and researchers to exchange technical
guidance, indicators, and implementation tools. While such actors do not intervene directly in
legislation, they play an increasingly important role in shaping the conditions under which
nature-based solutions are defined and integrated into policymaking.

<footnote n="131">¹³¹ Etifor is a spin-off company of the University of Padua, specialising in the economics of ecosystem services, sustainable land management, and nature-based solutions (NBS). It operates at the intersection of environmental consulting, applied research, and policy advisory.</footnote>
5.4 The multi-level governance process

At the national level, the governance of the policy field of NBS involves various key actors: first and foremost, the **Ministry of the Environment and Energy Security** is responsible for environmental policies, including NBS, and their integration into strategic policy frameworks, in coordination with commitments determined at the EU level. The ministry moreover oversees the **Italian Institute for Environmental Protection and Research** (Istituto Superiore per la Protezione e la Ricerca Ambientale – ISPRA) – a public research body established by law 133/2008, tasked with the conduction of research and the provision of technical-scientific support on environmental protection, biodiversity conservation, and sustainable development (ISPRA n.d.a). It publishes regular reports on various topics, including the report on “Land Consumption, Territorial Dynamics, and Ecosystem Services”, which contains data on soil consumption and land use changes, informing policymakers and the wider public (ISPRA n.d.b). Other relevant institutional actors include the **Ministry of Agriculture, Food Sovereignty and Forests**, which oversees policies with potentially significant impacts on biodiversity, soil conservation, and water management, and the **Ministry of Infrastructure and Transport**, whose agendas touch upon NBS as well. Another key actor in terms of NBS is the **CNR (Consiglio Nazionale delle Ricerche)**, the National Council for Research, which has established the country's **Nature-based Solutions Hub** in 2024. This occurred upon initiative and co-financed by the European Commission, which encouraged the development of such hubs across the member states, with the objective to bring together various stakeholders (public administrations, researchers, businesses) to gather information and promote new initiatives focused on nature-based solutions (Network Nature 2023). Furthermore, the **National Biodiversity Future Center**, funded by the Ministry of Universities and Research with Next Generation EU funds, was established recently as a research and innovation hub dedicated to the conservation, restoration, monitoring, and enhancement of Italian and Mediterranean biodiversity. It bundles around 2.000 scientists from various institutions and provides a platform for research in six thematic categories, among which the sea, land, wetlands, and cities (NBFC 2023).

At the **regional level**, NBS – implicitly, as part of environmental policies more widely – are typically situated within departments responsible for environmental agendas. Several regions have developed strategic **policy documents** on sustainable territorial development, biodiversity, and climate change mitigation. An example is Lombardy, which has defined “smart and nature-based solutions for the urban environment” as a strategic focus and instrument to enhance both environmental and social well-being (Regione Lombardia 2021) and stresses the importance of forestation and NBS in fostering climate change mitigation in cities (Regione Lombardia 2022). As regards supralocal planning instruments, the situation varies between regions: differently from **regional landscape plans** (Piani Paesaggistici Regionali, PPR), the definition of **regional territorial plans** (Piani Territoriali Regionali, PTR) is not mandatory, as responsibilities for territorial planning largely fall within the competencies of the regions, while landscape, as part of the country's cultural heritage, falls within national responsibility. This leads to a situation in which landscape plans in some cases compensate the absence of territorial plans as Marson (2019, p. 18) has underlined: “Practically, the void of recent regional planning tools going beyond purely functional schemes smooths the potential conflicts with
other recent plans, making landscape plans the new reference for spatial planning (pianificazione territoriale) at the regional scale".

In addition to regional plans, territorial plans moreover exist, in many yet not all cases<fnref n="132" />, at the **metropolitan/provincial level**, with **Provincial Territorial Coordination Plans** (*Piani Territoriali di Coordinamento Provinciale, PTCP*). The metropolitan – as an intermediary – level, as highlighted by Moccia and Arena (2021, p. 103), would be “the most adequate to plan ecologic connections and to upgrade landscape because of the link between regional and municipal planning”, however, this potential so far remains largely unexploited. Thus, vertical governance is often weakened by missing links across tiers, both in terms of policymaking and implementation.

Specific actions and projects, however, are carried out at the **municipal level**, which is primarily responsible for planning and implementing territorial development. This occurs “within a planning system in which diverse territorial planning levels (provincial, metropolitan and regional) have never had the strength or efficacy to guide, coordinate or influence decisions on local land-use planning” (Arcidiacono and Ronchi 2021, p. 5). Alongside **Territorial Governance Plans (PGTs)**, the key tools of municipalities for managing green infrastructure include the **Green Census** (*Censimento del Verde*), the **Green Regulation** (*Regolamento del Verde*), and the **Green Plan** (*Piano del Verde*). While municipalities thus operate at the most concrete level of implementing NBS, horizontal governance across departments (urban planning, environmental issues, and mobility) is typically siloed and fragmented. Moreover, coordination between municipalities is often limited, despite the potential of inter-municipal or metropolitan planning.

Horizontal governance among non-institutional actors, on the other hand, appears to be more
dynamic: national NGOs (e.g. Legambiente), research bodies and knowledge platforms (such
as the NBS hub) play an increasingly important role in gathering and disseminating knowledge,
experimentation, and advocacy.

<footnote n="132">¹³² The adoption of a PTCP is mandatory in some regions (where stipulated by regional law), including Lombardy and Emilia-Romagna.</footnote>
<table><caption>Figure IT20. Key actors and tasks in the governance of NBS, author's elaboration.</caption><thead><tr><td>Actor</td><td>Scale</td><td>Type</td><td>Role + Functions</td></tr></thead><tbody><tr><td>Ministry of the Environment and Energy Security (MASE)</td><td>National</td><td>Public (political + technical)</td><td>Responsible for environmental, energy, and climate policies, including NBS; implementation of the National Energy and Climate Plan; oversees ENEA and GSE</td></tr><tr><td>Ministry of Agriculture, Food Sovereignty and Forests (MASAF)</td><td>National</td><td>Public (political + technical)</td><td>Oversees policies affecting land use, biodiversity, and forestry</td></tr><tr><td>Ministry of Infrastructure and Transport (MIT)</td><td>National</td><td>Public (political + technical)</td><td>Develops infrastructure policies with potential relevance to NBS</td></tr><tr><td>ISPRA (Istituto Superiore per la Protezione e la Ricerca Ambientale)</td><td>National</td><td>Public (technical + research)</td><td>Conducts research and technical-scientific support on environmental protection, biodiversity, conservation, and sustainable development; publishes annual reports</td></tr><tr><td>CNR – Consiglio Nazionale delle Ricerche</td><td>National</td><td>Public (research)</td><td>Established the NBS Italy Hub and related research and implementation on NBS; coordinates researchers; provides scientific foundations for NBS</td></tr><tr><td>National Biodiversity Future Center</td><td>National</td><td>Public (research)</td><td>Coordinates research and biodiversity monitoring, dedicated to conservation, restoration, enhancement of biodiversity; provides an innovation platform</td></tr><tr><td>Regional Governments (Environmental Departments)</td><td>Regional</td><td>Public (political + technical)</td><td>Implement national policies; develop own legislation, policies and strategic documents on environmental issues; regional landscape plans; regional territorial plans</td></tr><tr><td>Metropolitan Cities / Provinces</td><td>Supralocal</td><td>Public (political + technical)</td><td>Responsible for Provincial Coordination Plans (PTCP), intermediary between regions and municipalities, but little formal competencies; potential role in coordinating supralocal ecologic networks and urban-rural integration</td></tr><tr><td>Municipal Governments (Environmental Departments)</td><td>Local</td><td>Public (political + technical)</td><td>Implement regional policies; develop local policies (e.g., Climate Adaptation Plans); planning and implementation of local green infrastructure and forestation; instruments: PGT, censimento verde, regolamento del verde, piano del verde</td></tr><tr><td>Legambiente</td><td>National/local</td><td>Civil society</td><td>Environmental NGO promoting NBS, sustainability, and green policies; awareness raising and lobbying; publishes annual reports</td></tr><tr><td>Italia Nostra</td><td>National/local</td><td>Civil society</td><td>Promotes protection and enhancement of natural and cultural heritage</td></tr></tbody></table>

## 5.5 Achievements, assessments, and challenges

The current discourse on nature-based solutions (NBS) in Italy, as well as the most recent funding mechanisms, are predominantly focused on urban areas and metropolitan cities. However, NBS are also implemented in rural areas and smaller municipalities, albeit in less visible ways – these interventions tend to be underreported and often appear under more
specific labels (e.g., agroecology, water retention, ecological restoration, etc.) rather than being explicitly framed and communicated as NBS. Overall, little strategic documentation is available as to the factual achievements of NBS and other greening initiatives in a long-term perspective, and systematic national reporting remains limited. This changed somewhat with the first publication of the annual report of the Committee for the Development of Public Green Spaces (under the auspices of the MASE) in 2017. The edition from 2022 (MASE 2022b) shows that substantial achievements have been made in the past decade in terms of NBS and greening measures in urban areas, most likely linked to the adoption of relevant laws as mentioned earlier, specifically law 10/2013 (Norme per lo sviluppo degli spazi verdi urbani – Regulations for the Development of Urban Green Spaces). This regards, for instance, urban forestation interventions (see Figure IT21), which grew notably from 2013 onwards, especially in the core cities of metropolitan areas.

FIGURA 10. FORESTAZIONE URBANA NEI CAPOLUOGHI PER RIPARTIZIONE GEOGRAFICA.

Anni 2020-2011 (numeri indice 2011=100)

<figure><img src="image_70.png" /><figcaption>Figure IT21. Development of urban forestation interventions in core cities, 2011-2020 (ISTAT 2020).</figcaption></figure>

Figure IT22 presents key indicators related to the implementation of law 10/2013 – referring to provincial capitals and capitals of metropolitan cities – in the years 2014, 2019, 2020, and 2021, which display notable increases throughout in most cases. This includes the participation of municipalities in the National Tree Day (Art. 1), which grew from 55,3% in 2014 to 75,2% in 2021. The number of trees planted for each newly born or adopted child (Art. 2) also shows a rising trend, with a significant increase from 27.923 in 2014 to 74.116 in 2019, and remaining high in 2021 at 69.029. The share of municipalities with balance sheets of trees (Art. 2-3) grew from 20,2% in 2014 to 55% in 2021. Other key indicators, such as the census of green areas, the share of municipalities with a green regulation, and adopted green plans, also show progressive increases, with census coverage reaching 92,7% in 2021 and green regulation reaching 66,1%, compared to 70,6% and 46,8% in 2014, respectively. Overall, the data indicate that the adoption of law 10/2013 has contributed to increasing municipal efforts in terms of urban greening and that local governments have been quite effective in enforcing the
required measures. However, while clearly a lot has been done in terms of local green governance, the expansion of urbanised green areas per 100 m² of urbanised space as well as the available green space per inhabitant have seen only modest increases over these years.

<table><thead><tr><th>Year</th><th>Municipalities involved in the National Tree Day - Art.1 (% and n.)</th><th>Trees planted for each child - Art. 2 (% and no.)</th><th>Balance sheets of trees - Art. 2-3 (%)</th><th>Urbanized green areas - Art. 4 (m2 x 100 m2 /sup. urb.)</th><th>Promotion of initiatives Art. 6 (%)</th><th>Census of green areas (%)</th><th>Green regulation (%)</th><th>Green plans adopted (no.)</th><th>Risks of Tree Fall (%)</th><th>Urban green space availability (m2 per inhabitant e)</th></tr></thead><tbody><tr><td>2014</td><td>55,3 (%)<br>57 (n.)</td><td>28,4<br>(%)<br>27.923<br>(n.)</td><td>20,2<br>(%)</td><td>8,25</td><td>26,6 (%)</td><td>70,6<br>%</td><td>46,8<br>%</td><td>7</td><td>22,9<br>(%)</td><td>31,3</td></tr><tr><td>2019</td><td>69,7 (%)<br>76 (n.)</td><td>51,4<br>(%)<br>74.116<br>(n.)</td><td>45,9<br>(%)</td><td>8,47</td><td>49,5 (%)</td><td>90,8 (%)</td><td>57,8<br>%</td><td>8</td><td>73,4<br>(%)</td><td>31,8</td></tr><tr><td>2020</td><td>58,7 (%)<br>64 (n.)</td><td>41,3<br>(%)<br>80.968<br>(n.)</td><td>50,5<br>(%)</td><td>8,51</td><td>52,3 (%)</td><td>90,8 (%)</td><td>62,4<br>%</td><td>8</td><td>76,1<br>(%)</td><td>32,1</td></tr><tr><td>2021</td><td>75,2%<br>82 (n.)</td><td>50,5<br>(%)<br>69.029<br>(n.)</td><td>55,0<br>(%)</td><td>8,55</td><td>57,8 (%)</td><td>92,7 (%)</td><td>66,1<br>%</td><td>11</td><td>78<br>(%)</td><td>32,5</td></tr></tbody></table>

Figure IT22. Relevant indicators as stipulated in law 10/2013, years 2014, 2019, 2020, 2021, referring to capitals of provinces/metropolitan cities, modified by author (MASE 2022b).

Nevertheless, as Figure IT23 shows, the number of urban greening initiatives in existing and new buildings has increased significantly from less than 30 to over 60 between 2014 and 2021. Both the greening of existing buildings (*Rinverdimento aree verdi su edifici esistenti*) and the greening of newly constructed buildings (*Rinverdimento aree verdi nuova edificazione*) show a gradual increase, while vertical greening of buildings (*Rinverdimento verticale degli edifici*) and the transformation of roof terraces into green roofs (*Trasformazioni di lastrici solari in giardini pensili*) are interventions happening rarely, and displaying only slight fluctuations over the years.
<figure><img src="image_71.png" /><figcaption>Figure IT23. Number and types of initiatives of urban green spaces (in existing and new buildings) in capitals of provinces/metropolitan cities (law 10/2013), 2014-2021 (MASE 2022b).</figcaption></figure>

Further data show that by 2021, 93% of provincial and metropolitan capitals had carried out a Green Census (censimento del verde), however, only 55% of these covered the entire municipal territory, and only 68% contained georeferenced data (see Figure IT 24). Moreover, while two-thirds have adopted Green Regulations (regolamento del verde), only a minor share (7,3%) has established a Green Plan (Piano del Verde).

<figure><img src="image_72.png" /><figcaption>Figure IT 24: Instruments of green planning and governance in provincial/metropolitan capitals, 2021 (%) (left); Green census by characteristics in core cities, 2021 (%) right) (Source: MASE 2022b)</figcaption></figure>

Overall, housing policies and environmental policies in Italy are not strongly correlated, however, clearly some intersections exist. This started from the introduction of standards in residential areas, which mandated the establishment of green spaces. Urban regeneration – which typically involves also the rehabilitation of green areas – and housing regeneration often go hand in hand, as demonstrated by various integrated programmes adopted in Italy (on this, see also chapter 6). While these programmes reflect a growing alignment between environmental and housing policies overall, there is no direct link between environmental policies, including NBS, and housing affordability policies. This gap exists both at the regulatory and strategic levels, meaning that while sustainability considerations are
increasingly incorporated into urban planning, they are not yet considered in terms of their impacts on housing affordability and inequality.

<table><caption>Figure IT25. Summary table on measures impacts, potential negative effects, and opportunities of NBS, author's elaboration.</caption><thead><tr><td>Dimension</td><td>Measured Impacts</td><td>Potential Negative Effects</td><td>Opportunities</td></tr></thead><tbody><tr><td>Urban forestation</td><td>Stronger growth in urban forestation in northern regions and metropolitan cities; growth below national average in southern, central and non-metropolitan core cities</td><td>Disparities between regions</td><td>Targeting support to underserved regions; identifying existing best practices</td></tr><tr><td>Law 10/2013</td><td>Trees planted more than doubled; participation in National Tree Day increased; urbanized green areas and urban green space availability almost stagnant; green census and green regulations increased significantly</td><td>stagnation in green space per inhabitant; potentially focus on administrative compliance rather than substantial improvements</td><td>Expanding engagement through targeted funding</td></tr><tr><td>Types of initiatives of urban green spaces</td><td>substantial increase in initiatives of urban green spaces on existing and new buildings; minor growth in vertical and rooftop greening</td><td>Limited uptake of vertical greening or green roofs</td><td>Supporting pilot projects; disseminating best practices</td></tr><tr><td>Green census coverage</td><td>Only 54.5% covered the full territory; 68.3% included georeferenced data</td><td>Incomplete and inconsistent data limits planning and monitoring</td><td>Enhancement of integration with GIS and planning tools to support strategic action</td></tr><tr><td>Links to housing and regeneration</td><td>Some alignment with regeneration projects, but no direct linkage to affordability or tenure differentiation</td><td>lack of integrated projects and programmes between housing, NBS, and social policies</td><td>Bridging environmental and housing policies with integrated urban development frameworks</td></tr></tbody></table>

# 6 Densification projects

## 6.1 The policy cycle: emergence of the issue and policy decisions

The first interventions in Italy relevant in terms of urban densification have been experiences of the regeneration of historic centres which have resulted in increased urban densities, first as part of post-war reconstruction efforts, and later through dedicated programmes starting from the 1970s onwards, where the adaptation of buildings and housing to higher quality living standards has led to additive densification interventions. Urban renewal policies such as the Piani di Recupero (Recovery Plans) in the late 1970s (introduced by law 457/1978) and 1980s as well as the URBAN programme in the 1990s played a key role in this process, promoting regeneration while addressing housing needs and the functional adaptation of historic urban fabrics. More recently, the debate on the compact city and sustainability – shaped by European policies and reinforced by the widespread concept of the 15-minute city – has framed urban density as a strategic response to demographic growth and attractiveness while at the same time aiming to safeguard land consumption and curb urban sprawl. However, in Italy there exists no designated legislation nor a strategic framework on urban densification as such (neither at the national nor regional levels), and the term itself appears rarely. Despite this, it can be identified as an implicit policy objective in various legal and strategic documents that address urban regeneration (rigenerazione urbana) more widely, which promote the transformation of the urban fabric, the reuse and transformation of dismissed or underused
built-up urban areas or buildings (often non-residential stock into residential or mixed-used
neighbourhoods), implying thus often urban densification measures. This connection is
particularly relevant as several regions have integrated the objective of soil protection into their
regional territorial laws – such as Emilia-Romagna (LR 24/2017), Lombardy (LR 31/2014), and
Umbria (LR 1/2015)<fnref n="133" /> – linking the reuse of urban land with strategies to limit further land take
by promoting development within already urbanised perimeters. In the case of Emilia-
Romagna and Lombardy, the provisions are legally binding: the former sets a cap on new land
take at 3% of the urbanised surface as of 2017, with a progressive target of zero net land
consumption by 2050; the latter establishes the goal of achieving net-zero soil sealing by 2050
and mandates an ecological balance mechanism, requiring new land consumption to be offset
by regeneration measures.

Densification in urban areas is therefore typically achieved through large-scale urban redevelopment projects, often involving former industrial or other brownfield sites, such as dismissed military facilities or abandoned railway yards, implemented through the application of specific urban planning tools defined at the national, regional, and local levels (see next chapter). While urban regeneration in Italy has traditionally focused on larger cities, recent years have seen a growing interest in the regeneration of smaller municipalities and peripheral territories, reflected in the development of a National Strategy for Inner Areas (Strategia Nazionale per le Aree Interne, SNAI) in 2013. These areas, often in mountainous regions, are characterised by demographic decline, a poor provision of services, and vacancies in the building stock. However, in such contexts, regeneration rarely corresponds to densification, but interventions typically focus on qualitative reuse – for instance, the conversion of disused public buildings or the redevelopment of degraded areas – without significantly altering densities.

Overall, and in line with developments with many other European countries, the understanding
of urban and regional planning has evolved substantially since the first national law was
adopted in 1942 (law 1150/1942 – the *Legge Urbanistica*, which is formally still in place, though
it has undergone various modifications since then). The focus has gradually shifted from a
connotation of urban planning and development as processes to design and implement the
expansion of the built environment (prevailing in the first decades of the post-war era) to, more
recently, the promotion of the regeneration and transformation of the existing built heritage in
a perspective of sustainable land use and a reduction of soil consumption (Gorlani 2022). This
has occurred in line with an acknowledgment of the fact that a relevant share of the post-war
built heritage is reaching a state of obsolescence (Lanzani 2024). Today, *rigenerazione urbana*
is a widely discussed term and concept in Italy both in academic, political, and everyday
contexts, however, there is no clear definition or consensus on its objectives, scope, or
methods of intervention. It remains a "blurred yet increasingly pervasive field", with
"regeneration" largely replacing the term of "urban planning" (*urbanistica*) – a shift which
becomes evident also in the renaming of public administration departments, aligning with this
concept (Lanzani 2024). In recent years, efforts have been made to develop a national
perspective on urban regeneration (Ombuen et al. 2016; Palazzo and Cappuccitti 2024) aimed
at mitigating this conceptual vagueness and at establishing a shared framework on urban
regeneration interventions. This was attempted at the regulatory level, with the proposal of a

<footnote n="133">¹³³ The regions in which the Italian case study cities of this project are situated.</footnote>
bill (no. 1131) in 2019, which, however, in the first attempt did not pass and is said to be
currently under preparation. Urban regeneration interventions are thus largely regulated at the
regional scale, with provisions being either integrated into territorial governance legislation or
through specific regional laws dedicated to the matter (as will be further outlined in chapter
6.4).

<figure><img src="image_73.png" /><figcaption>Figure IT26. Timeline illustrating key regulations in Italy and the EU affecting urban regeneration, author's elaboration.</figcaption></figure>

6.2 The implementation process

In operational terms, various tools and strategies exist which result in urban densification. A widely used practice in Italy involves the redevelopment of vacant or underused urban areas, such as former railway yards – exemplified by the several yards undergoing redevelopment in Milan and several other cities. These projects typically result in the transformation into mixed-use neighbourhoods, integrating residential, office, commercial, and public spaces. It is noteworthy that in most cases, investment in housing has become a major driver of these market-led redevelopments. While there is no single national procedure regulating such interventions, they are often promoted through negotiated planning agreements between public authorities and private developers (based on instruments like *Programmi Integrati di Intervento, Accordi di Programma*), and financed through a mix of private and public (usually national or regional) contributions. Another common approach involves the demolition and reconstruction of residential buildings with increased volumes, regarding both the private and public housing stock. This is a “plot by plot” process, often implemented at the building level and without an overall planning framework which would ensuring public benefits or steer outcomes (Bricocoli et al. 2025).

Moreover, regeneration has been incentivised since the 1990s through (national) integrated programmes, such as the **Contratti di Quartiere (I and II)**, and, currently, the **PINQuA (Programma Innovativo per la Qualità dell'Abitare)** – National Innovative Programme for the Quality of Housing). However, within the framework of most of these programmes,
densification was rarely explicitly foreseen (an exception is the PINQuA, as further outlined below). Instruments to implement urban densification measures thus include both ordinary urban planning tools and punctual programmes, as shall be briefly outlined in the following.

**Urban planning tools** that directly or indirectly impact on urban densification are defined in territorial governance legislation and specified in territorial governance plans and thus vary both between regions and municipalities. Territorial governance in Italy operates at multiple scales through respective plans, namely regional (Piani Territoriali Regionali), metropolitan or provincial (Piani Territoriali Metropolitani/Provinciali), and local ones (Piani di Governo del Territorio, PGT). While regional and metropolitan plans in some cases outline broader strategies for urban regeneration, the implementation of specific measures is primarily the responsibility of municipalities through the definition of **PGTs** (Cotella 2021). Local governance tools outlined in the PGT, which must align with the legislative framework stipulated at the regional level, thus play a key role in urban regeneration and densification processes. These tools include: the **change of use/destination** – municipalities can authorise changes in land use in order to enable residential densification, particularly where the construction of public or social housing is concerned; **volumetric increases** are foreseen in several cases where a social, environmental or other public benefit (including, but not limited to social housing) is generated through urban regeneration measures; several local planning provisions moreover foresee a **simplification and acceleration of administrative procedures and financial incentives** in the case of interventions resulting in urban regeneration (which may include a reduction of procedural costs, municipal taxes, and urbanisation fees – the *oneri di urbanizzazione*) (Bricocoli et al. 2025).

Furthermore, various **integrated programmes** to incentivise and implement urban regeneration (often entailing densification) have been launched in Italy in the early 1990s, inspired by similar policies at the European Union level (particularly the Urban Pilot Projects and the Urban I and II programmes). The season of these 'complex programmes' (programmi complessi) started with the PII (Programmi Integrati di Intervento), to be promoted by municipalities "in order to upgrade the urban, building and environmental fabric" – thereby specifying for the first time the multidimensional nature of such programmes – and the PRIU – Programmi di Riqualificazione Urbana, both of which were introduced by the national law 179/1992 (Wolfgring 2024; Capriotti and Santangelo 2021). Important programmes that followed are the PRU – Programmi di Recupero Urbano (law 493/1993), and, focused on the regeneration of public housing neighbourhoods, the **Contratto di Quartiere (CdQ)** (neighbourhood contracts) programme, introduced in 1997 and extended for a second iteration in 2001. The programme explicitly provided for the possibility to use funds for the requalification and new construction of housing and services (Storto 2018), resulting thus not necessarily in residential densification, but in several cases (as has occurred, for instance, in the case of the CdQ Le Piagge in Florence, Wolfgring 2024). Public funding allocated through the programme amounted to over €300 million for the CdQ I (Storto 2018) and €800 million for the CdQ II (Camera dei Deputati 2017).

A currently ongoing programme funded through the PNRR is the **PINQuA**, the National Innovative Programme for the Quality of Housing, endowed with €2.8 billion. It addresses municipalities with more than 60.000 residents, metropolitan cities, and regions, and is aimed at enhancing the quality of housing and urban spaces. It focuses on the regeneration of
housing and furthermore specifies the increase of the public and social housing stock as a
designated objective, aiming to achieve "a high strategic impact on the national territory"
(Governo Italiano 2021, p. 214). Densification is explicitly mentioned as an objective of the
programme, drawing on the 15-minute city model in pursuing the broader aim of reducing soil
consumption as well as increasing resilience to climate change and the availability of green
spaces, specifically in areas of high residential pressure (MIMS 2022). However, whether the
programme will effectively produce the desired outcomes in terms of densification remains to
be seen after its finalisation (scheduled for the end of 2026).

Overall, integrated programmes have typically entailed objectives of retrofitting as well as greening. For instance, both the Contratti di Quartiere and the PINQuA have funded interventions aimed at improving the energy efficiency of buildings through retrofitting measures, and have supported the inclusion of green public spaces, sustainable mobility, and the use of nature-based solutions. Integrated programmes of urban regeneration thus are frequently linked to broader environmental and energy policy goals.

<figure><img src="image_74.png" /><figcaption>Figure IT27. Key programmes of urban regeneration in Italy, 1990s-today, author's elaboration.</figcaption></figure>

<figure><img src="image_75.png" /><figcaption>Figure IT28. PINQuA interventions by regions, author's calculation based on Italia Domani 2025.</figcaption></figure>
6.3 Size and role of the market

Large-scale regeneration projects (e.g., on railway yards and brownfield sites) in Italy are typically market-oriented interventions, relying on private developers' initiative and substantial private investment, as large margins of return can be achieved. Such projects typically involve national as well as international real-estate developers, the mobilisation of capital through investment funds and investment companies. The role of finance has significantly changed the overall profile of urban regeneration projects in terms of the acquisition of properties as well as in terms of orienting and driving the timing and perspective of the redevelopment. The debate around private and public partnerships and the role of the public actor in urban planning has significantly been focusing on such major projects, in which private investors have often played a core role. While these interventions contribute to densification, they often lead to rising market prices, as they primarily address more affluent populations, especially in attractive cities (Bricocoli et al. 2025). Given that the residential dimension often constitutes a key function in these redevelopments, the proportion of social or public housing is generally low or non-existing, as developers usually prefer to pay the corresponding value to the city instead of integrating a variety of housing profiles. These dynamics are further reinforced by the role of real estate lobbies and business associations (such as ANCE – *Associazione Nazionale Costruttori Edili*), which aim to promote and achieve investor-friendly regulations. Such actors often engage in consultations and advocacy with political parties and ministries, pushing for legislative changes that streamline planning procedures, reduce obligations, or expand volumetric allowances in urban redevelopment. In several cases, the public has assumed the role of an “enabler in the financialization of real estate markets”, adopting “controversial market-led urban policies” (Bortolotti 2023, p.1). As Bortolotti further outlined (ibid.), local authorities tend to implement planning frameworks which facilitate direct investment by semi-public and public development companies. These entities, as well as semi-public firms, play a key role in large-scale urban projects. This has led to an increasing assetization of public land, while often incorporating provisions for public services or infrastructures (e.g., mobility or social housing). This approach reflects similar developments in other major global cities (Fainstein 2008; Tasan-Kok 2021), where public investment serves as a catalyst for attracting financial capital and enhancing global competitiveness.

6.4 The multi-level governance process

As mentioned, there is no national legislation on urban regeneration, and attempts to design a
regulatory framework have so far proven unsuccessful. However, in terms of vertical
governance, several institutional levels play distinct roles. At the national level, the **Ministero
delle Infrastrutture e dei Trasporti (MIT)** (Ministry of Infrastructure and Transport) plays a
key role in governing urban regeneration (and thus implicitly densification), specifically through
**the subordinate General Directorate for Housing and Urban Redevelopment** (*Direzione
generale per la casa e la riqualificazione urbana*). It oversees the development and
implementation of policies related to infrastructure, transport, and housing, which are integral
parts of regeneration projects. The ministry has, for instance, funded and been involved in
various projects aimed at reducing social and physical deterioration of (public and other)
housing neighbourhoods.
At the regional scale, there are broad divergencies in terms of urban regeneration legislation and policies: while most **regional governments** have (to some degree) integrated provisions on urban regeneration into their legislation on territorial and urban planning and governance, some – including Puglia (LR 21/2008), Lazio (07/2017), Veneto (14/2017), Liguria (23/2018), Piemonte (16/2018), Lombardy (18/2019), Marche (14/2021), and Calabria (24/2022) – have adopted specific **urban regeneration laws** (Cellamare 2020). In Lombardy, for instance LR 18/2019 (*Misure di semplificazione e incentivazione per la rigenerazione urbana*) supports urban regeneration processes through the reduction of urban planning fees and the simplification and acceleration of administrative procedures. However, also in regional laws, the term “densification” rarely appears. An exception is the law of Emilia-Romagna (LR 24/2017, *Disciplina Regionale sulla Tutela e l’Uso del Territorio*), where densification is explicitly named as a potential intervention for reuse and urban regeneration (Colavitti and Serra 2023), concerning both public and private spaces and buildings. As instruments for implementing urban regeneration, integrated programmes are defined in various laws, understood as coordinated sets of interventions aimed at addressing both physical and socio-economic shortcomings in a comprehensive way. Integrated programmes bundle multiple objectives, bringing together both various stakeholders – typically both public and private – as well as diverse sources of funding. In some of these programmes, such as the PINQuA, urban densification is explicitly incentivised. Some regional laws (like LR 21/2008 of Puglia, *Norme per la Rigenerazione Urbana*) impose a legal obligation on municipalities to establish programmatic documents on urban regeneration, which must identify areas where urban regeneration interventions are to be implemented and outline the types of interventions to be pursued, which may include densification measures.

At the **municipal level**, densification is governed through local planning instruments (which may have different terminologies according to the different regions (*Piano di Governo del Territorio/Territorial Governance Plan (PGT) in Lombardia* or *Piano Urbanistico Generale/General Urban Plan (PUG) in Emilia Romagna*), which in many cases entail provisions for urban regeneration, identifying areas in which densification is foreseen, defining regulations for increasing building densities, and stipulating conditions under which changes in land use are permitted for the reuse of dismissed of underutilised areas and buildings. While regeneration interventions generally take place within the broader framework set in these territorial planning instruments, the concrete project is typically an outcome of a negotiation process between the municipality and the developer. Here, divergencies exist between territorial contexts: while larger municipalities and metropolitan cities are more likely to have the administrative and financial capacity as well as the attractiveness to draw private investment and negotiate with private actors, smaller towns and inner areas often lack adequate resources, coherent strategies, and bargaining power to implement urban regeneration or densification interventions.
<table><caption>Figure IT29. Key actors and tasks in the governance of urban regeneration, author's elaboration.</caption><thead><tr><td>Actor</td><td>Scale</td><td>Type</td><td>Role + Function</td></tr></thead><tbody><tr><td>Ministero delle Infrastrutture e dei Trasporti (MIT)</td><td>National</td><td>Public (political and technical)</td><td>Defines national priorities and allocates funding for infrastructure, transport, and housing; supports regeneration initiatives.</td></tr><tr><td>Direzione generale per la casa e la riqualificazione urbana (MIT)</td><td>National</td><td>public (technical, subordinated to the MIT)</td><td>Implements national policies for housing and regeneration; supports urban regeneration through specific projects and funding.</td></tr><tr><td>Regional governments with various setups (in some cases, regional commissary and department for urban regeneration)</td><td>Regional</td><td>Public (political and technical)</td><td>Development of legislation on land use and urban regeneration (urb. reg. laws in 8/20 regions); defines obligations for municipalities through regional laws; provides funding.</td></tr><tr><td>Municipalities with various setups (in some cases, deputy mayors and departments for urban regeneration)</td><td>Local</td><td>Public (political and technical)</td><td>Implements regeneration and densification measures; defines zoning and building regulations in local plans (PGT/PUG); authorises land use changes.</td></tr></tbody></table>

## 6.5 Achievements, assessments, and challenges

There is no distinct agenda on urban densification in Italy; rather, it is implicitly included within the broader framework of the discourse and policies on "rigenerazione urbana" and the reduction of soil consumption, stipulated in several regional territorial governance laws. However, both the discourse and policies on urban regeneration display a clear bifurcation, with contrasting logics and narratives: on the one hand, urban regeneration revolves around peripheral and deteriorated urban areas, typically involving the public housing stock, where public intervention is deemed necessary in order to mitigate physical, social, and economic shortcomings (Wolfgring 2024). Such regeneration efforts are typically financed through public (European, national, or regional) funds and implemented via targeted programmes. In these contexts, residential densification is usually not an explicit policy objective – though in the more recent past, it has occurred incidentally –, but the emphasis is rather on managing and improving the existing built environment, enhancing infrastructure, and tackling socio-economic challenges. On the other hand, urban regeneration is pursued as a process of valorisation and financialisation, highlighting opportunities and potentials (instead of shortcomings), particularly where large-scale, market-driven redevelopment projects are concerned (as, for instance, in dismissed brownfield sites). In these cases, residential densification usually takes place, but it does not necessarily lead to increased housing accessibility or affordability. On the opposite, urban regeneration has often fuelled gentrification, contributing to the displacement of lower-income residents and intensifying pressures on local housing markets. As Arturo Lanzani (n.d., p.3, own translation) highlighted, "[...] what we have done is shift the geography of social distress – displacing it from areas where the real estate market has boomed to other parts of the city that have experienced a downturn, leading to a concentration of hardship". Prominent recent examples underline how
market-oriented densification has primarily benefited affluent populations, reinforcing socio-
spatial inequalities instead of alleviating them. Lanzani (2024) moreover criticises the often
ambiguous and superficial ecological framing of urban regeneration, highlighting that vague
references to sustainability may contribute to greenwashing. While acknowledging that
ecological concerns are (and should remain) central to regeneration efforts, he emphasises
that many regeneration policies have demonstrated to be inadequate, adopting approaches
which neglect the social implications of interventions.

7 Summary and discussion of results

Over the past two decades, Italy has undergone significant transformations in its environmental and energy policy (EEP) landscape, shaped by both supranational frameworks (EU directives, Green Deal, and the Recovery and Resilience Facility) and domestic economic and policy developments.

At the national level, the EEP framework has been driven primarily by economic incentives, fiscal mechanisms, and European directives. Italy's policies supporting building renovation began in the late 1990s with nationally driven tax incentives aimed at stimulating the construction sector and reducing tax evasion, without explicit reference to energy efficiency. Law 449/1997 marked the first such intervention, and while the 2007 Ecobonus introduced support for energy-saving measures, it did so without imposing specific performance targets. The European Union's influence became decisive starting with the Energy Performance of Buildings Directive (2002/91/EC), which required member states to implement energy performance measures. This led to a gradual evolution (starting from the adoption of Legislative Decree 192/2005) towards aligning national policies with EU energy efficiency goals. From that point on, successive EU directives were transposed through national legislation, introducing binding national targets, renewable energy quotas for buildings, and energy savings obligations. So, while Italy initiated renovation incentives independently, the EU became a key driver in directing the scope, ambition, and regulatory framework of energy retrofitting policy in the following decades.

In past years, legal and policy frameworks have been influenced by an increasing emphasis on sustainability, soil protection, and urban regeneration instead of new construction. Several regions have adopted legislation aimed at reducing soil consumption, introducing binding targets or caps, and promoting the reuse of already urbanised land. While "urban densification" as a term is neither used nor clearly defined in Italy, it has implicitly emerged as part of the broader discourse on urban regeneration. Urban regeneration is being promoted and implemented by both private actors (in the form of market-led valorisation strategies) and public actors (through targeted programmes aimed at regenerating deteriorated neighbourhoods, often characterised by a substantial presence of public housing), with a variety of effects that need to be locally and contextually analysed and evaluated (Bricocoli et al. 2025).

On an institutional level, environmental, energy, housing, and regeneration objectives are
operationalised through a complex multilevel governance framework. The Ministry of
Infrastructure and Transport (MIT), through its Directorate for Housing and Urban
Regeneration, plays a key role in the areas of housing and urban regeneration more narrowly,
particularly through national programmes such as the PINQuA. The Ministry of the Environment and Energy Security (MASE), on the other hand, is responsible for environmental, energy, and climate policies, including nature-based solutions (NBS). Significant challenges exist in both the horizontal and vertical levels of governance, encompassing the fragmentation of competencies, siloed logics and limited cooperation in policymaking and, even more so, at the operational level, and at times diverging institutional priorities and interests. The actual implementation of the policy fields investigated – housing retrofit, nature-based solutions, and densification/urban regeneration – takes place largely at the regional and municipal levels, where capacity and institutional strength vary considerably, producing thus very different outcomes.

Furthermore, contextual factors such as a highly outdated and fragmented housing stock, widespread vacancies in inner areas, and regional disparities in administrative and technical capacities significantly influence both the necessity for and the implementation of environmental and energy policies (EEPs) and interventions. The legacy of disinvestment over the last decades – particularly concerning the public housing sector, as a result of policy decisions and austerity measures – further amplifies both the need for and the challenges of applying EEPs in a targeted and context-sensitive way.

Concludingly, Italy's EEP trajectories reflect a complex interplay of economic stimulus, normative framing around land protection and sustainability, institutional fragmentation, and spatial inequalities. These dynamics result in ambitious but uneven policy outcomes, with significant implications for housing quality, accessibility, and territorial cohesion.

As regards relations and trade-offs between EEPs and housing policies, the Italian case demonstrates that while EEPs have – particularly in the recent past, linked to the EU Recovery and Resilience Facility – increased in relevance and mobilised substantial public and private resources, their impacts remain uneven and often regressive (Bricocoli et al. 2025). Most recently, the Superbonus 110% (introduced in 2020 as part of the National Recovery and Resilience Plan) provided ample tax deductions for energy retrofitting in residential buildings. While resulting in the renovation of a substantial number of residential (particularly, privately owned) buildings, the scheme displayed uneven effects and revealed socio-spatial disparities, disproportionately favouring middle- and high-income homeowners with sufficient tax capacity and access to finances. In contrast, public housing tenants and low-income households have been largely excluded, due both to economic barriers (such as a lack of upfront capital or insufficient tax capacity) and informational or procedural obstacles. The unequal distribution of benefits has also manifested spatially, reflected in a stronger uptake and implementation in wealthier northern regions and urban areas with higher institutional and technical capacities. Smaller municipalities often lack the administrative expertise or human resources required to manage complex, large-scale programmes. Moreover, the short timeframes of recent programmes – linked to the availability of post-pandemic recovery funding – have exacerbated existing governance inequalities, favouring actors with a pre-existing capacity to navigate complex procedures and resources for developing projects at short notice.

Urban regeneration is typically achieved either through market-led projects (often on former industrial or railway sites), targeting real estate valorisation, or through public programmes aimed at regenerating deteriorated neighbourhoods, often characterised by a large presence of public housing. While the first model often comes at the expense of affordability, public-led
interventions in neighbourhoods with low-income and otherwise disadvantaged groups can
promote the redistribution of the positive effects of EEPs and regeneration more widely.

Overall, the analysis demonstrates that while Italy has developed a wide range of instruments and programmes encompassing housing retrofit, nature-based solutions, and urban regeneration policies, these are not yet aligned with a coherent housing strategy that includes the objectives of territorial and social justice. Further investigating this misalignment will be central to the ReHousIn project's ongoing comparative work.
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Annex

Policy Labs

Participants of Policy Lab Assisi

3 April 2025, Assisi, town hall

* Alessandro Almadori, Expert, Terni

* Francesco Berni, Experto, Assisi

* Luca Bonifacio, Experto, Spello

* Chiara Catalano, Researcher, National Research Center - CNR-IRET

* Luca Federici, ATER Umbria – Umbria Public Housing Company, Manager

* Laerte Grimani, President, COOP UMBRIA CASA, Housing Cooperative

* Alessandra Guidotti, City of Assisi, Urban Planning Department, Manager

* Roberta Jacoby Cureau, Università di Perugia, Department of Civil Engineering

* Marco Larini, ATER Umbria – Umbria Public Housing Company, Director

* Matteo Lanfaloni, PhD candidate, Università di Perugia

* Luca Lucarini, ATER Umbria – Umbria Public Housing Company, Staff

* Alessio Mariucci, Expert, Assisi

* Maria Elena Menconi, Department of Agricultural Sciences, Università di Perugia

* Paolo Mirti, City of Assisi, Deputy Mayor for Welfare

* Cristina Piastrelli, Sunia – Tenants' Union, Umbria, President

* Elena Toccaceli, ATER Umbria – Umbria Public Housing Company, Manager

* Maurizio Zara, President, Legambiente Umbria

Participants of Policy Lab Milano and Reggio Emilia

11 April 2025, Milan, Politecnico di Milano

* Francesco Asdrubali, Università per Stranieri, Perugia

* Giulia Belloni, DASU Politecnico di Milano

* Francesco Berni, City of Reggio Emilia, Housing Department

* Marco Bertani, City of Reggio Emilia, Head of Urban Planning

* Gianluigi Chiaro, Area Proxima e Nomisma

* Graziana Cito, Region Lombardia, General Direction Housing and Social Housing

* Lanfranco de Franco, City of Reggio Emilia, Vice Mayor

* Laura Di Maria, DASU Politecnico di Milano
* Riccardo di Rosa, Region Lombardia, General Direction Environment and Climate

* Giuseppe Failla, Consorzio Cooperative Lavoratori (Housing Cooperative Consortium)

* Giordana Ferri, Fondazione Housing Sociale, Executive Director

* Vincenzo Gaglio, Architect, Milano

* Vittorio Gimigliano, ACER Reggio Emilia, Public Housing Company, Project coordinator

* Riccardo Gini, Parco Nord Milano, Director

* Fabio Lepratto, DASTU, Politecnico di Milano,

* Serena Maioli, ARTER Emilia-Romagna, Unità EcosistemaI Urbani Director

* Lucia Mantegazza, ANCI Association of Local governments of Lombardia, VicePresident and Mayor of Gessate

* Matteo Mognaschi, Aler Milano - Public Housing Company, President

* Barbara Negroni, Comitato per lo sviluppo del verde pubblico (MASE) and Mayor

* Roberta Pavarini, CCPMC – Housing Cooperative, President

* Giulia Ragnoli, City of Milano, Central Direction, Staff City Operation Manager

* Nicola Russi, DASTU Politecnico di Milano

* Stefano Salata, DASTU Politecnico di Milano

* Andrea Scaleggi, La Cordata - Housing Cooperative

* Anna Tagliaferri, City of Milano, Housing Department

* Lina Scavuzzo, Lendlease, Development Director

* Sara Travaglini, DAR Casa – housing cooperative, President

* Federico Zanfi, DASTU Politecnico di Milano

## Interviews

* Davide Bedogni, Centro Cooperativo di Progettazione, Reggio Emilia, 16 June 2025

* Marco Corradi, ACER Reggio Emilia, Reggio Emilia, 17 July 2025

* Giulia Datola, DASTU Politecnico di Milano, Milan, 29 April 2025

* Alessandra Oppio, DASTU Politecnico di Milano, Milan, 29 April 2025

* Marta dell'Ovo, DASTU Politecnico di Milano, Milan, 29 April 2025

* Mariachiara Pastore, DASTU Politecnico di Milano, Milan, 28 February 2025
# NATIONAL REPORT ON THE REGULATORY SYSTEM OF EEPs IN NORWAY

## 1 Executive Summary

This national report explores the evolution and governance of environmental and energy policies (EEPs) in Norway, with a specific focus on their intersections with housing policies. It is part of the ReHousIn project, which investigates how green and digital transitions affect housing inequalities across European contexts. Focusing on three major policy domains— retrofitting, densification, and nature-based solutions (NBS)—the report assesses policy frameworks, implementation mechanisms, and potential social impacts, particularly in relation to housing affordability and inclusion.

The analysis draws on a combination of desk research, six in-depth interviews with public and private stakeholders, and a Policy Lab. The report highlights significant variation in how the three domains have evolved and are governed, revealing uneven institutional maturity, fragmented multilevel coordination, and weak integration with housing policy objectives.

Energy retrofitting is the least developed among the three domains. Despite Norway's participation in EU climate frameworks, national retrofitting policy remains weak and fragmented. Most support relies on voluntary financial incentives provided by Enova and Husbanken, with limited redistributive capacity. Grants typically cover residual parts of the costs, making retrofitting accessible mainly to middle- and high-income households. No legal obligation currently exists for energy retrofitting of private housing, and the adoption of relevant EU directives remains uncertain following recent political developments.

NBS have gained increasing relevance in Norwegian spatial planning, particularly after the adoption of the 2018 and 2024 national planning guidelines. These promote ecosystem-based approaches for climate adaptation and flood management. However, NBS implementation remains uneven across municipalities due to territorial disparities in technical capacity, financial resources, and administrative coordination. There is also a lack of formal mechanisms to prevent green gentrification, as green infrastructure can raise property values and reduce housing affordability in central areas.

Densification emerges as the most institutionalised strategy, developed well before the influence of EU directives and embedded in national planning law since the 1980s. It is strongly supported by national sustainability goals and urban development policies but is heavily shaped by private market dynamics. Municipalities retain planning authority, yet their bargaining power has diminished due to declining public land ownership. Consequently—also due to their typical implementation in centrally located, high-value areas—densification interventions are often associated with limited housing affordability, particularly in high-demand urban contexts such as Oslo.

The report identifies major governance challenges, including siloed policy design, limited horizontal coordination between environmental and housing strategies, and deepening
territorial inequalities. Affordability and equity concerns are largely absent from current EEP frameworks, particularly in retrofitting. Vulnerable groups—such as tenants, first-time buyers, and those in rural municipalities—face the greatest barriers to benefiting from the green transition.

## 2 Introduction and methodology

This national report explores frameworks, actors, and the multi-level governance of environmental and energy policies in Norway, with a particular focus on housing retrofitting, densification, and nature-based solutions (NBS). Prepared within the framework of the *ReHousIn* project, the report further examines how climate and energy transition policies might impact housing inequalities.

As Norway intensifies efforts to reduce emissions and improve energy efficiency, the built environment has become a central arena for intervention. Retrofitting existing buildings, promoting compact urban development, and integrating NBS into planning processes have emerged as key strategies to meet environmental goals. Yet, the social impacts of these transitions remain underexplored. This report addresses this gap by critically assessing the governance structures, financial mechanisms, and regulatory frameworks that shape these interventions, while paying close attention to their effects on housing affordability, accessibility, and social equity.

This report is based on a qualitative research approach that includes policy document analysis, a policy lab and key informant interviews conducted with public and private actors. These methods allowed for an in-depth understanding of policy gaps in the Norwegian framework, particularly the synergies and tensions between environmental, energy, and housing policies, and their potential implications for housing inequalities.

*Document Analysis*. The analysis of environmental and energy policies in Norway began with extensive desk research, centered on a close examination of key policy documents related to the three selected policy areas. This included a detailed review of regulatory frameworks—such as planning regulations and building standards—as well as strategic documents like Climate Action Plans and Energy Efficiency Action Plans. Particular attention was given to both overarching policy goals and the concrete instruments used for implementation.

*Policy Lab*. A policy lab was held in Oslo in April 2025, bringing together key stakeholders from public agencies, housing associations, and energy and environmental institutions. The lab was designed as a participatory and exploratory setting to foster dialogue across policy domains that are often siloed in practice. Its aim was to interrogate how environmental and energy goals interact with housing inequalities, particularly in relation to disadvantaged groups. The lab facilitated collective reflection on emerging trade-offs, institutional constraints, and possibilities for more integrated approaches. It served both as a methodological tool and a knowledge-sharing platform, grounding the analysis in concrete policy debates and practice-oriented insights.
The Policy Lab created a space for the co-identification of barriers, tensions, and potential solutions related to environmental and energy policies in the Norwegian context. It combined presentations, group discussions, and a concluding plenary session. Participants were divided into thematic groups—densification, retrofitting, and nature-based solutions—to explore challenges and opportunities at the intersection of green policies and housing inequalities. Each group included representatives from the housing sector, ensuring that diverse and practice-based perspectives were brought into the discussion. The plenary session enabled cross-group dialogue and collective reflection.

Insights from the Policy Lab were instrumental in identifying policy gaps and understanding the broader implications of environmental and energy policies on housing inequalities. Moreover, the event played a key role in mapping relevant stakeholders for follow-up in-depth interviews.

*Interviews.* In total, we conducted six semi-structured interviews with seven key informants, including representatives from municipal administrations, housing organizations, and energy agencies (see Table 1). The interviews, each lasting approximately one hour, aimed to deepen the understanding of how environmental and energy policies interact with housing policy and practice in Norway.

Interview discussions covered a range of themes, including governance structures, inter-agency coordination, and the design and implementation of policy tools and financial mechanisms. Informants provided insights into how EU directives are shaping Norwegian policies, as well as the degree of national adaptation and contestation surrounding their implementation. Interviews further explored how municipal actors navigate trade-offs between environmental goals and housing affordability in the context of densification and NBS projects, particularly in disadvantaged areas. Others focused on funding structures and policy instruments supporting retrofitting, and their implications for different segments of the housing sector (e.g., student, municipal, and cooperative housing). Across interviews, participants highlighted the fragmented responsibilities between housing and environmental sectors and the challenges of aligning climate adaptation and mitigation strategies with inclusive and equitable housing policies.

<table><caption>Table NO1. List of interviews</caption><thead><tr><td>Interview</td><td>Key informant/Institution</td><td>Date and place</td><td>Duration</td><td>Focus</td></tr></thead><tbody><tr><td>Interview 1</td><td>Representative from the Tenants' Association (Leieboerforeningen)</td><td>19 May 2025. Online</td><td>1h</td><td>Energy retrofitting and inequalities in the rental market</td></tr><tr><td>Interview 2</td><td>Expert from research institution</td><td>19 May 2025. Online</td><td>1h</td><td>Energy retrofitting</td></tr><tr><td>Interview 3</td><td>Representative from Enova</td><td>21 May 2025. Online</td><td>1h</td><td>Energy retrofitting</td></tr><tr><td>Interview 4</td><td>Representative from Husbanken</td><td>21 May 2025. Online</td><td>1h</td><td>Energy retrofitting</td></tr><tr><td>Interview 5</td><td>Two representatives from the municipality of Oslo</td><td>27 May 2025. Online</td><td>1,15 h</td><td>Nature-based solutions and densification</td></tr><tr><td>Interview 6</td><td>Representative from the cooperative Housing Federation (NBBL)</td><td>27 May 2025. Online</td><td>1h</td><td>Energy retrofitting and cooperative housing</td></tr></tbody></table>
This multi-source approach offers a holistic view of how national strategies are translated into operational practices, how financial tools are deployed, and how different segments of the population (especially in relation to different tenures) can be affected by different green initiatives.

*Limitations of the methodological approach*

A noteworthy limitation of the methodological approach is the disproportionate focus on energy retrofitting in the interview material: five out of the six interviews conducted addressed this topic. This imbalance reflects, in part, the general knowledge and, more specifically, the research team's pre-existing in-depth knowledge of nature-based solutions (NBS) and densification policies in the Norwegian context. In contrast, energy retrofitting represents a relatively underexplored area within this policy landscape. As such, targeted interviews were deemed necessary to address this knowledge gap and to complement the available documentary sources with more contextualised, practice-based insights

## 3 General governance system

Norway's governance system is characterized by a three-tier structure involving national, regional, and local levels. As of 2024¹³⁴, the country is administratively divided into 15 counties (fylker) and 357 municipalities (kommuner). While municipalities are the core units of local government, responsible for delivering a wide range of public services, counties provide regional coordination, particularly in education, transport, and business development. Both levels operate under the oversight of state-appointed governors who ensure compliance with national laws. Despite this formal division of responsibilities, Norwegian governance operates through a multilevel framework that often requires collaboration across tiers, especially in sectors such as environmental planning, infrastructure, and social services. Although not a member of the European Union, Norway is closely integrated into EU policymaking through the European Economic Area (EEA). This arrangement entails the implementation of a significant portion of EU legislation at the national and subnational levels, notably in areas such as climate policy, procurement, and regional development. Local and regional authorities thus play a critical role in interpreting and applying EU/EEA regulations, adding a further layer of complexity to multilevel governance. It is within this institutional context that Norway's approach to sustainable urban development unfolds.

Norway's approach to sustainable urban development is shaped by a complex multilevel governance structure involving national, regional, and local authorities, each playing distinct roles in planning, regulation, funding, and implementation. Despite clear national commitments to climate mitigation and sustainability, the implementation of these strategies reveals substantial fragmentation and uneven capacities across levels of government. Notably, a siloed approach persists between environmental and housing policies—a key issue that this report will explore in greater depth.

<footnote n="134">134 https://www.regjeringen.no/no/tema/kommuner-og-regioner/kommunestruktur/fylkesinndelingen-fra-2024/id2922222/</footnote>
Housing

Housing governance in Norway is highly centralized. The Ministry of Local Government and Modernisation serves as the national housing authority, setting housing policy and promoting the political objective of widespread homeownership (eierlinja). Regions (fylkeskommuner) play a supportive and coordinating role, rather than holding direct responsibility for housing provision. Regions are not mandated to ensure sufficient housing construction, a responsibility that remains with the municipalities. However, they are seen as key actors in fostering regional coordination, especially in cases where housing needs and urban development transcend municipal boundaries (Asplan Viak, 2023). As for municipalities, while they can develop local housing strategies and recommendations—such as measures to enhance housing affordability—their policy capacity is significantly constrained by binding national regulations, particularly in the areas of land use and housing.

A key governance tension in the provision of affordable housing, especially in the context of urban densification, stems from the national Planning and Building Act. This legislation allows zoning plans to include provisions regarding the number of dwellings in an area, minimum and maximum dwelling sizes, and requirements related to accessibility and special-needs design. However, it does not include any requirements related to housing affordability or specific tenure forms (Cavicchia, 2023a). As a result, decisions about the number and typology of dwellings remain the primary instruments available to shape a more diverse and inclusive housing supply.

Housing retrofitting

Housing retrofitting in Norway is characterized by centralized governance, with key decisions and funding mechanisms largely controlled at the national level. The national government, through the Ministry of Local Government and Regional Development and the Ministry of Climate and Environment, defines the regulatory framework and allocates financial resources. Implementation relies heavily on financial incentives, primarily through two national bodies: Enova and Husbanken. Enova, operating under the Ministry of Climate and Environment, promotes technological innovation and energy savings but offers modest support for deep renovations. Husbanken, under the Ministry of Local Government and Modernization, provides low-interest loans, especially for municipalities upgrading public rental housing or private homeowners conducting comprehensive upgrades.

At the local level, municipalities have limited regulatory authority over retrofitting unless they own the building stock. Most housing remains privately owned, so the decision to retrofit lies with homeowners or housing cooperatives. Municipalities may apply for state grants for municipal housing and offer local incentives. Financial constraints—especially in smaller municipalities—further limit their ability to engage in retrofitting governance beyond accessing national funds.

NBS

In Norway, the implementation and governance of nature-based solutions (NBS) follow a multilevel framework involving national, regional, and local authorities. At the national level, multiple ministries—especially Climate and Environment, Local Government, Agriculture, Transport, and Energy—collaborate to integrate NBS across sectors and fund related
programs. Regional authorities coordinate planning and support municipalities, with Rogaland being a leader in NBS-based climate adaptation. Municipalities, however, hold primary responsibility for land-use planning and NBS implementation through zoning and local development plans. Despite national guidelines and financial support, many municipalities face technical and fiscal challenges, leading to fragmented implementation. Environmental NGOs advocate for stronger NBS policies, but their influence varies. A critical governance gap exists between green infrastructure and housing strategies, where green upgrades may inflate property values or constrain affordable housing development. While local autonomy enables context-sensitive planning, it also creates inconsistencies and dependency on national funding for sustaining large-scale NBS projects.

## Densification

Densification is one of the most long-standing and institutionalized strategies in Norwegian urban planning, originating in the 1980s and embedded in national spatial and climate policies. The Planning and Building Act forms the legal backbone for land use decisions, promoting compact city development to reduce car dependency and preserve agricultural and recreational land. Yet, the implementation of densification is primarily a local responsibility. Municipalities hold planning authority and design their masterplans and zoning regulations accordingly.

This decentralized framework grants municipalities formal autonomy, but in practice, private developers wield significant influence. Developers initiate most zoning proposals, which municipalities approve through political processes in the city council (E. I. Falleth et al., 2010). Since the 1980s, declining public land ownership has weakened municipal bargaining power, making densification projects heavily market-driven. Consequently, although densification increases housing supply, it seldom aligns with affordability goals. The absence of strong national requirements for affordable housing or inclusionary zoning amplifies this issue, especially in high-demand cities like Oslo, where densification contributes to rising housing costs and micro-apartment proliferation.

Regional authorities (fylkeskommune) play a limited role, primarily offering technical support and ensuring that local plans align with national objectives, in particular about densifying around transportation hubs.

<table><thead><tr><td>Governance Level</td><td>Housing</td><td>Housing Retrofitting</td><td>Nature-Based Solutions (NBS)</td><td>Densification</td></tr></thead><tbody><tr><td>National level</td><td>Highly centralized. The Ministry of Local Government and Modernisation sets housing policy.</td><td>Centralized governance. The Ministry of Local Government and Regional Development and the Ministry of Climate and Environment define the framework. Enova promotes innovation and energy savings; Husbanken provides</td><td>Different Ministries and National Agencies Integrate NBS into urban development and land-use planning, ensuring green infrastructure is included in zoning regulations</td><td>Planning and Building Act promotes compact development.</td></tr></tbody></table>
<table><caption>Table NO2. Multilevel governance of housing, energy retrofitting, NBS and densification in Norway</caption><tr><td></td><td></td><td>loans for comprehensive upgrades.</td><td></td><td></td></tr><tr><td>Sub-national level 1 (Regions / fylkeskommuner)</td><td>Supportive and coordinating role; not directly responsible for housing provision.</td><td>Limited role. May offer technical support to municipalities but hold no direct authority over retrofitting efforts.</td><td>Coordinate planning efforts across municipalities, ensure compliance with national objectives, provide guidance, and support to municipalities</td><td>Provide technical support and ensure local plans align with national goals.</td></tr><tr><td>Sub-national level 2 (Municipalities)</td><td>Responsible for local housing provision. Can develop local housing strategies, but constrained by national regulations, especially on land use.</td><td>Limited authority unless owning the housing stock. Can apply for national grants and offer local incentives. Financial constraints affect capacity.</td><td>Primary implementers of NBS and are supposed to incorporate NBS into zoning regulations, pilot projects, and community engagement initiatives</td><td>Hold planning authority. Develop masterplans and zoning regulations, but heavily influenced by private developers. Affordability often not prioritized.</td></tr></table>

# 4 Housing retrofitting

## 4.1 The policy cycle: emergence of the issue and policy decisions

### Legal requirements

In Norway, separate and targeted regulations or laws on energetic retrofitting of the existing building stock do not exist. Indeed, the building requirements comprised in the national regulations primarily apply to new construction (which accounts for about 2% of the total building stock every year)(Nakstad & Engebakken, 2019). The lack of specific regulations on existing buildings highlights a remarkable shortcoming as in the facts, most of the building activity in Norway concerns interventions on existing buildings. There have been substantial discussions about the need for separate regulations concerning the existing building mass, but as of today, this still does not exist (Nakstad & Engebakken, 2019). This generates problems because it is not always easy to adapt existing buildings to the technical requirements that concern the new ones.
The main national regulation relevant for interventions on existing buildings is the national Planning and Building Act (PBL), which is the national planning law. The first version of the law dates back to 1985 and the second and last version refers to 2008, even though several updates have been made along the years. It is crucial to note that PBL does not explicitly address energy efficiency or energetic retrofitting for existing buildings within this chapter. While it allows municipalities to set requirements for building modifications, the sections focus on structural and safety aspects rather than energy performance or sustainability measures.

PBL is supplemented by two levels of regulations: TEK (Regulations on technical requirements for construction works) and SAK (the building matters regulations). TEK are the main regulatory framework for energetic retrofitting at the national level and contain requirements for energy efficiency in buildings.

The first TEK regulations were promulgated in 1997 (Norwegian Ministry of Local Government and modernization, 1997) and were followed by new regulations in 2010 (TEK10) and in 2017 (TEK17), the latter being the ones currently in place. The building regulations for the Norwegian construction industry (TEK10) underwent a major revision in 2015 (Lunke et al., 2016) and were updated to match an EU directive<fnref n="135" /> regarding energy performance in buildings (European Parliament, Council of the European Union, 2010). Furthermore, they introduced the goal of passive house standard in 2015, and near-zero houses in 2020.

## National strategies and visions

When it comes to national strategies, a few plans are relevant in addressing the energy retrofitting of the existing building stock.

Worth mentioning is the Økobygg program<fnref n="136" /> (1998-2002), supported by the Ministry of Local Government and Regional Development, which contributed to increase the environmental commitment within the construction sector, while boosting knowledge exchange through environmental networks. While relevant to increase attention to the environmental performances of buildings, the document primarily emphasizes sustainable practices, standards, and pilot projects for new construction rather than existing buildings.

The first document with a more focused attention on existing buildings is the 2005-2008_ Miljøhandlingsplan for bolig- og byggsektoren. "Environmental action plan for the housing and construction sector" (Norwegian Ministry of Local Government and Regional Development, 2005). The document was elaborated under the Stoltenberg II government (2005-2013), a coalition of the Norwegian Labor Party (Ap), the Socialist Left Party (SV) and the Center Party (Sp). The Miljøhandlingsplan 2005-2008 emphasizes energy efficiency and environmental sustainability across Norway's housing and building sectors and it identifies specific goals and initiatives for retrofitting existing buildings, both commercial and residential. Specifically, new financial support tools are introduced (they will be explored in the next section), new methods to calculate energy performance are explored and energy labeling of homes is adopted, following the EED (Energy Efficiency Directive).

<footnote n="135">¹³⁵ Directive 2010/31/EU of the European Parliament and of the Council</footnote>

<footnote n="136">¹³⁶ https://www.byggemiljo.no/wp-content/uploads/2014/10/Prosjektkatalog_Okobygg.pdf</footnote>
Another relevant national strategy is the **2009-2012_ Bygg for framtida. "Build for the future: Environmental action plan for the housing and construction sector 2009-2012"** (Norwegian Ministry of Local Government and Regional Development, 2009). As the previous, also this document was elaborated under the Stoltenberg II government. A significant part of the action plan underscores the need for **increasing environmental efforts in the existing building stock.** The document stresses that most Norwegian buildings, especially those built in the 1960s-1980s, are still in use and do not meet current energy standards. Consequently, there is a significant potential for environmental improvements in these structures, with a major focus on retrofitting to improve insulation and reduce energy consumption. Retrofitting is highlighted as essential for achieving both environmental and cost-effective energy improvements.

Worth mentioning in relation to retrofitting, is also the launch of the program "Fremtidens Byer" (Future Cities) in 2008. This program is a collaboration between the state and Norway's largest cities, aimed at creating sustainable urban development to reduce greenhouse gas emissions and enhance climate resilience. The program was divided in 4 focus areas, one of which is energy in buildings. The efforts around this priority area largely revolved around the program **Future Built**, which involves the 13 largest municipalities in Norway and has the goal of completing 100 pilot projects that cut carbon emissions by at least 50% compared to current regulations and common practice. By 2025, the program will have 80 pilots (both public and commercial), including housing. Husbanken (the State Housing Bank) provides financial support for these projects, contributing up to 5 million NOK annually to stimulate urban environmental improvements. The idea is that improving the energy efficiency of public buildings will influence also the other building sectors.

The last relevant action plan to discuss is the **2023 Action plan for energy efficiency in all parts of the Norwegian economy** (Norwegian Ministry of Petroleum and Energy, 2023). One section of the plan is dedicated to energy reduction in the building sector and has an important focus on existing buildings. The plan addresses that the government has increased subsidies for municipal building upgrades, raising the budget from NOK 263 million in 2023 to NOK 300 million in 2024 (**of these NOK 50 million is earmarked for municipal buildings, while NOK 250 million is for general work on energy efficiency**). These funds target projects such as additional wall insulation, window replacements, and geothermal heat pumps, addressing energy deficiencies in municipal rental housing, where only 5% of units meet satisfactory energy standards. Rural municipalities, in particular, report the worst conditions. Even though no specific retrofitting goals have been set for social housing, Husbanken provides grants for the renovation of municipal rental housing and distributes two-thirds of the available budget to municipally owned rental housing. 2025 budget is NOK 400 million. Furthermore, the plan highlights the strengthening of supports from Enova including an additional NOK 180 million allocation for 2024 for comprehensive energy upgrading of buildings. Energy labelling regulations are under review to address the gap in older buildings, which comprise the majority of Norway's building stock and hold the greatest potential for energy efficiency improvements.

Influences of EU directives

Norway is not a member of the European Union, but it participates in the EU internal market through the EEA agreement. As a result, the implementation of EU directives follows a more
independent and selective path, with Norway typically incorporating aspects of the directives at a later stage. EU directives are not automatically binding in the Norwegian context; they must be individually assessed and transposed into national law, often involving political negotiations and contextual adaptations. Annex 1 provides an overview of the EU directives relevant to retrofitting, while this section examines how, and to what extent, these directives have been integrated into Norwegian policies and practices.

While Norway participates in the EU Emission Trading System (EU ETS) since 2008, in 2019 it entered into an agreement with EU to intensify its climate cooperation by also aligning its actions to reduce emissions outside of the EU ETS and specifically agriculture, transport, waste management and **buildings** (see table NO 3 for an overview of the national objectives in relation to the relevant EU directives). Under this agreement, Norway has started to apply the Effort Sharing Regulation by committing to binding annual greenhouse gas emission targets for the period 2021–2030 for the mentioned sectors. Under the terms of the climate agreement with the EU, Norway is to cut emissions from all the mentioned sectors by 40 % by 2030 compared with the 2005 level (Norwegian Ministry & of Climate and Environment, 2021).

It is important to highlight that on January 29, 2025, the Norwegian Government collapsed. The Centre Party (Senterpartiet) withdrew its support for Prime Minister Jonas Gahr Støre of the Labour Party, triggering the crisis. The dispute centers on the adoption of three European directives concerning environmental and energy policies. While the Labour Party advocates for incorporating the directives on renewable energy, energy performance of buildings, and energy efficiency into the Norwegian law, the euroskeptic Centre Party opposed their implementation. As a result, the political landscape regarding EU energy directives remains highly uncertain. The following considerations pertain to the situation as it stood before the current government crisis.

Norway does not currently have a specific target for reducing its total energy consumption (absolute reduction). Instead, the country has set a national goal to improve **energy intensity**<fnref n="137" /> in the mainland economy by 30% between 2015 and 2030. In the action plan for energy efficiency from 2023, the government has proposed a revised target of 10 TWh reduced electricity consumption in the entire building stock by 2030 compared to 2015 (The Norwegian Government, 2023). The potential for energy saving in Norway is enormous, especially in the building stock, and meeting the established target for emission reduction in both new and existing buildings could cost approximately 18 billion NOK annually, with over half of this investment needed for detached houses (SINTEF, 2023). Significant financial support may be required to make retrofitting feasible<fnref n="138" /> and appealing for private and commercial property owners.

As of today, and given the contested political context, the future implementation of the Energy Performance of Buildings Directive (EPBD) in Norway remains uncertain (Interviews). While discussions are ongoing across various housing and energy institutions, they largely remain at a theoretical level rather than translating into concrete policy directions (interviews). So far,

<footnote n="137">¹³⁷ Energy intensity refers to the amount of energy consumed relative to the economic output (usually measured as energy use per unit of GDP). Improving energy intensity means making the economy more energy-efficient—producing the same or greater economic output with less energy.</footnote>

<footnote n="138">¹³⁸ https://www.sintef.no/en/latest-news/2023/energy-saving-measures-in-buildings-can-turn-them-into-norways-biggest-power-plant/</footnote>
the EPBD has influenced the design of loans and grants available to both private actors and public institutions, including those responsible for student and municipal housing (interviews). There are also plans to simplify eligibility criteria. Additionally, the directive has contributed to the development of energy certification systems and inspection protocols in Norway, shaping the policies and programs administered by organizations such as Enova and the Norwegian Water Resources and Energy Directorate. (The Norwegian Government, 2023).

The **EU Energy Efficiency Directive (EED)** complements the EPBD by setting binding measures to improve energy efficiency in member states, including public buildings. In Norway, the EED has influenced public buildings to adopt higher energy efficiency standards, serving as examples for the rest of the sector (see for example the Future Built Program). Additionally, residential retrofitting projects are encouraged through financial incentives and technical support, with programs designed to meet the directive's energy-saving targets (Enova and Husbanken grants).

**The Renewable Energy Directive (RED)** has also played a significant role by setting targets for renewable energy usage in buildings and encouraging the integration of renewable systems in retrofitting projects. In Norway, this has translated into the promotion of renewable energy technologies such as solar panels, heat pumps, and district heating systems in residential and commercial buildings. These efforts are supported by grants, loans, and technical assistance, aligning national policies with the EU's renewable energy goals (Farstad, 2022).

The broader influence of EU directives is evident in Norway's retrofitting strategies, which include financial subsidies, technical guidelines, and certification programs. Collaborative projects under EU programs such as Horizon 2020 have enabled the exchange of best practices and innovative solutions between Norway and EU member states. As a result, energy certification, lifecycle energy management, and the training of energy consultants are now integral parts of Norway's approach to energy efficiency in buildings (Farstad, 2022).
<figure><img src="image_76.png" /><figcaption>Figure NO1. Timeline illustrating key policies and regulations in Norway (bottom part) and EU (upper part) affecting housing retrofitting (in red)</figcaption></figure>

## 4.2 The implementation process

Currently, the majority of housing retrofitting expenses in Norway are borne by homeowners, who also play a central role in initiating retrofitting projects. As previously mentioned, there is no legal mandate requiring retrofitting in Norway, making such interventions largely a matter of private choice.

### Financial tools

At the national level, various support schemes are available to encourage retrofitting efforts. Public initiatives for energy retrofitting in Norway include financial support mechanisms, regulatory frameworks, and other measures designed to promote building upgrades and enhance energy efficiency. It should be noted that these support mechanisms are universal and do not vary according to income brackets.

At the national level, two main actors shall be considered:

**Enova** plays a central role in providing financial support for energy retrofitting. Established in 2001, Enova is from 2018 under the Ministry of Climate and Environment and offers grants aimed at reducing energy consumption and CO2 emissions. Importantly, the limitations of available grants, which will be discussed also in the next sessions, are also tied to Enova's primary mandate, which is to support the development and market introduction of new technologies rather than to fund large-scale energy renovations of existing buildings..Enova grants are available for projects that involve transitioning from electric heating to renewable alternatives, such as district heating or biofuels, and for implementing energy-saving
measures, including improved insulation and energy-efficient systems. Enova also supports pilot and demonstration projects to encourage innovative retrofitting technologies. There is an agreement, running between the 1st of January 2021 and 31st of December 2024¹³⁹, between the Climate and Energy Fund and Enova SF to contribute with about 3 billion Norwegian kroner (approximately 3 mln euros) per year (see, https://snl.no/Klima- og energifondet). The Climate and Energy Fund, which is a state fund whose purpose is to promote energy efficiency and an environmentally friendly transformation of energy use and production, provides grants for climate and energy measures in housing associations and condominiums, businesses and private homes and it is an important tool also to boost growth and climate-friendly technology. There are different support schemes that can be granted to both housing cooperatives as well as private owners, and the entity of the support changes according to the typology of intervention to implement. The main schemes for private homes concern replacement of doors and windows, insulation of the building envelope, systems for water management and use of wind energy. For buildings built before the 80s, where re-insulation might be needed, there is no support grant (research should clarify the extent of this building mass in low energy class). For condominiums, the main support schemes concern the installation of solar energy systems and interventions on the building finishes (windows, doors and structural improvements, including insulation upgrade). The grants from Enova SF have specific thresholds for each kind of interventions (they may not cover the whole expense) and, in the case of condominiums, depend on the number of housing units<fnref n="140" />. All subsidies are funded by a tax on Norwegian electricity bills, known as the "Enova-fee"<fnref n="141" />. Typically, Enova grants cover around 20% of retrofit costs, leaving homeowners responsible for the remaining 80% (interviews). This gap is often financed through loans, such as those provided by Husbanken, which will be described in the next section. While private banks also offer loans, green loan schemes are currently more developed for new construction than for energy upgrades. Obtaining loans for retrofitting is more challenging, partly because banks lack clear and accessible indicators to define what qualifies as a "green" renovation project. However, there are signs of progress: starting from 2026, Norway's energy performance certification system is expected to be revised, which may help improve clarity and support the development of green financing for upgrades (interviews). Another key actor is **Husbanken**, which provides financial incentives to facilitate retrofitting. The Housing Bank can provide loans for housing quality to individuals, companies, municipalities and county authorities. For private, the housing bank requires, as a general rule, that the upgrade work must include measures that improve both energy efficiency and accessibility. Husbanken offers low-interest loans and grants that can cover up to 90% of project costs for high-ambition initiatives, such as meeting passive house standards or comprehensive energy upgrades (the general rule for private individuals is that the loan can cover 85% of the renovation cost, and the left 15% has to be paid out as equity). For municipalities to upgrade municipal rental housing, the subsidy paid cannot exceed 50 percent<fnref n="142" /> of the actual costs of the measures. Municipalities that received

<footnote n="139">¹³⁹ Soon, there will be a new Enova agreement 2025-2028</footnote>

<footnote n="140">¹⁴⁰ In the case of energy retrofitting of condominiums, the support from Enova can cover up to 30 percent, and a maximum of NOK 10,000,000, of the project's costs. https://www.enova.no/bedrift/bygg-og-eiendom/stotte-til-forbedring-av-energitilstand-i-borettslag-og-boligsameier/</footnote>

<footnote n="141">¹⁴¹ The ENOVA fee goes to the Climate and Energy Fund, and is intended to contribute to an environmentally friendly transformation of the use and production of energy https://www.elvia.no/nettleie/alt-om-nettleie/statligehavgifter-inngar-i-nettleien/</footnote>

<footnote n="142">¹⁴² https://www.husbanken.no/kommune/lan-og-tilskudd/tilskudd-energitiltak/</footnote>