EUROPEAN COMMISSION Brussels, 8.9.2022 SWD(2022) 275 final COMMISSION STAFF WORKING DOCUMENT Environmental Implementation Review 2022











Country Report - ITALY























Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Environmental Implementation Review 2022: Turning the tide through environmental compliance {COM(2022) 438 final} - {SWD(2022) 252 final} - {SWD(2022) 253 final} - {SWD(2022) 254 final} - {SWD(2022) 255 final} - {SWD(2022) 256 final} - {SWD(2022) 257 final} - {SWD(2022) 258 final} - {SWD(2022) 259 final} - {SWD(2022) 260 final} - {SWD(2022) 261 final} - {SWD(2022) 262 final} - {SWD(2022) 263 final} - {SWD(2022) 264 final} - {SWD(2022) 265 final} - {SWD(2022) 266 final} - {SWD(2022) 267 final} - {SWD(2022) 268 final} - {SWD(2022) 269 final} - {SWD(2022) 270 final} - {SWD(2022) 271 final} - {SWD(2022) 272 final} - {SWD(2022) 273 final} - {SWD(2022) 274 final} - {SWD(2022) 276 final} - {SWD(2022) 277 final} - {SWD(2022) 278 final}



This report has been written by the staff of the Directorate-General for Environment, European Commission. Any comments are welcome to the following e-mail address: ENV-EIR@ec.europa.eu More information on the European Union is available on the internet ( http://europa.eu ). Photographs: For reproduction or use of these photos, permission must be sought directly from the copyright holder. ©European Union, 2022 Reproduction is authorised provided the source is acknowledged. Table of Content

Executive summary Part I: Thematic areas 1. Circular economy and waste management Measures towards a circular economy Waste management 2. Biodiversity and natural capital Nature protection and restoration Marine ecosystems Ecosystem assessment and accounting 3. Zero pollution Clean air Industrial emissions Major industrial accidents prevention – SEVESO Noise Water quality and management Chemicals 4. Climate action Key national climate policies and strategies Effort sharing target Key sectoral developments

Use of revenues from the auctioning of EU ETS allowances Part II: Enabling framework: implementation tools 5. Financing Environmental investment needs in the European Union EU environmental funding 2014-2020 EU environmental funding 2021-2027 National environmental protection expenditure Green budget tools Overall financing compared to the needs 6. Environmental governance Information, public participation and access to justice Compliance assurance Effectiveness of environmental administrations Reforms through the Commission’s technical support instrument (TSI) TAIEX EIR peer to peer projects



Executive summary In previous Environmental Implementation Reviews (EIRs), the main challenges identified for Italy for the implementation of EU environmental policy and law were to: ·improve municipal waste management, in particular by reducing landfilling and increasing separate collection of waste in southern regions;

·improve urban wastewater treatment by making investments in these facilities; ·reduce particulate matter (PM10 and PM2.5) and nitrogen dioxide (NO2) emissions by reducing traffic congestion and biomass burning; ·designate the remaining Natura 2000 marine sites as special areas of conservation (SACs), set and meet site-specific conservation objectives and ensure the network is effectively managed; ·improve the efficiency with which environmental financing is implemented. Despite some progress made in recent years on municipal waste management, in particular with a steady and consistent increase in recycling and composting, the waste sector in Italy still has significant shortcomings, as illustrated by several infringement procedures against Italy. These include the ’landfill case’ and the ’Campania case’ subject to fines levied by the Court of Justice of the European Union (CJEU). More action is needed to ensure that waste disposal in Italy is carried out in compliance with EU law. The recovery and resilience plan (RRP) brings important reforms with a national circular economy strategy and a national waste management programme, plus flagship recycling investments that are expected to improve implementation of environmental norms on the ground. On the Natura 2000 network, some marine SACs still need to be designated. The conservation status of habitats and species of EU interest must also be improved by fully implementing Natura 2000, using regional prioritised action frameworks to better integrate EU funds, and planning investments more strategically. There are insufficient funds for biodiversity in the RRP to cover the needs; thus the shortfall must be made up from other EU funds and national sources. Italy has had advanced practices for natural capital, environmental accounting and well-being indicators for many years, which are now bolstered through support from the Commission’s technical support instrument and the EIR peer to peer tool. On air quality, Italy has made limited progress in reducing emissions as a whole, despite agreements between the national and regional governments in the Po Valley, an EU Clean Air Dialogue on 3-5 June 2019 and a high profile LIFE integrated project (PREPAIR). Substantial exceedances of the limit values for both PM10 and NO2 continued in 2020. Around 20% of the RRP is allocated to measures on sustainable energy and transport which will improve air quality. Progress can also be made through a broader tax-shift from labour to environmental and other tax bases, including the gradual elimination of environmentally-harmful subsidies. On water management, Italy has made limited progress in reducing the number of non-compliant agglomerations under the Urban Waste Water Treatment Directive with financial penalties imposed by the CJEU. More investments are needed to achieve progress. Nitrates hotspots also need to be cleaned up in northern Italy and drinking water quality must be improved in Lazio. The RRP will support significant investments in land-use planning (to reduce soil sealing), flood control, reducing leakage and investing in urban wastewater treatment. High water consumption is a concern in southern regions, particularly from agriculture. Furthermore, several marine descriptors are in a poor or very poor state. EU financing continues to provide substantial support to reduce the gap in environmental implementation. Italy is due to receive over EUR 190 billion from its RRP (2021-2026) in grants and loans and EUR 42 billion from cohesion policy (2021-2027). Italy’s overall environmental financing for investments is estimated to reach 0.48% of GDP a year (less than the EU average of 0.7%) in 2014-2020, with 80% coming from national sources. Overall environmental investment needs for the coming period are estimated to reach at least 0.67% of Italy’s GDP a year, suggesting an environmental investment gap of over 0.19% of GDP to be addressed by focusing on the country’s environmental implementation priorities. Italy has improved its capacity to absorp EU funds for environmental measures except in Sicily and Calabria. Total fines related to waste and water issued by the CJEU have exceeded EUR 620 million since 2015.



Part I: Thematic areas 1. Circular economy and waste management Measures towards a circular economy The new Circular Economy Action Plan adopted in March 2020 is one of the main building blocks of the European Green Deal. The EU’s transition to a circular economy will reduce pressure on natural resources and will create sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss. The Action Plan announces initiatives along the entire life cycle of products, aiming to reduce the EU's consumption footprint and to double the EU's circular material use rate by 2030. It targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and the resources used are kept in the EU economy for as long as possible. The circular material use rate is a good indicator of an economy’s circularity, as it includes all the materials that are fed back into our economy. There are major differences in the circularity rate between EU countries. To help achieve the EU circular economy action plan’s goal of doubling the EU circular material use rate by 2030, ambitious measures targeting the whole product life cycle are needed at Member State level. Such measures range from sustainable product design to increase the durability, reparability, upgradability and recyclability of products, to other measures such as remanufacturing, increasing the circularity in production processes, recycling, boosting eco-innovation and increasing the uptake of green public procurement. Italy’s circular (secondary) use of material was 17.1% in 2017 and 21.6% in 2020, way above the EU average of 12.8%, as shown in Figure 1. It also demonstrates a steady increase in secondary material usage over recent years in the country. Figure 1 – Circular material use rate (%), 2010-2020

Resource productivity expresses how efficiently the economy uses material resources to produce wealth. Improving resource productivity can help minimise the negative impacts on the environment and reduce dependency on volatile raw material markets. As shown in Figure 2, with EUR 3.54 generated per kg of material consumed in 2020, resource productivity in Italy is well above the EU average of EUR 2.09 per kg. This positive performance comes on the back of a continuous increase in Italy’s resource productivity over the last decade. Figure 2: Resource productivity 2010-2020 Circular economy strategies The Commission encourages Member States to adopt and implement national/regional circular economy strategies covering the whole life cycle of products. This is because such strategies are one of the most effective ways to progress towards a more circular economy. Since the launch of the online Circular Economy Platform in 2017, national, regional or local authorities have used the platform to share their strategies and roadmaps. With regard to the country’s circular economy strategy, as part of the recovery and resilience plan’s reforms (RRP), Italy adopted in June 2022 a new national strategy for circular economy, which is expected to cover the entire lifecycle of products. The strategy includes action to help create a new digital waste traceability system, tax incentives to support recycling and the use of secondary raw materials, revision of environmental taxation, right to reuse and repair, reform of the extended producer responsibility and consortia system, support for existing regulatory tools, and support for the industrial symbiosis project through regulatory and financial instruments. Italy has a national circular economy network and held a fourth annual conference on 5 April 2022. Italy also adopted in June 2022 a national programme for waste management (PNGR) with the intention of providing technical support to local authorities by the government to implement the environmental regulations and to draw up plans and projects on waste management. Finally, it intends to fund flagship projects, including on the circular economy. In 2021, the Commission’s technical support instrument is supporting a project on the circular economy in Italy. Italy does not have a specific sectorial strategy for plastics, textiles or construction, although some are addressed by the RRP flagship projects. mentioned above. Many LIFE projects in Italy bear on examples of circular economy; some of these were showcased during the 2019 GreenWeek: one is on recycled football stadium seats in Pontedera and the Stadio Olimpico (Rome) appropriately named TACKLE . An innovative partnership has been established for waste management for the City of Rome in 2022. Eco-innovation A successful transition to a circular economy requires social and technological innovation. This is because the full potential of the circular economy can only be reached when it is implemented across all value chains. Eco-innovation is an important enabling factor for the circular economy. New approaches to product design and new business models can help produce systemic circularity innovations, creating new business opportunities. In 2021, Italy ranked 10th on the 2021 Eco-Innovation scoreboard, with a total score of 124, resulting in an average eco-innovation performance (Figure 3). In two out of five areas , namely eco-innovation activities and resource efficiency outcomes, Italy performed above the EU average. It performed below the EU average on eco-innovation inputs, eco innovation outputs, and socio-economic outcomes. One problem facing the Italian economy is that it has few domestic natural resources, and the cost of imported raw materials and their impact on the final cost of products is high. The EIR 2019 had a priority action to increase the risk capital for eco-innovation in SMEs. Awareness of environmental sustainability increases with company size, with for instance, 91% of firms with 50 or more employees separating their waste collection, 71% of companies monitoring energy use and 56% monitoring water use.The ”Transition 4.0“ initiative within the RRP offers incentives, including risk capital, to support the circular economy investments of companies . This means that some progress has been made on the 2019 priority action.



Figure 3 – Eco-innovation performance, 2010-2019

Green public procurement (GPP) Public procurement accounts for a large proportion of European consumption, with public authorities’ purchasing power representing around 14% of EU GDP. Public procurement can help drive the demand for sustainable products that meet reparability and recyclability standards. Italy adopted its first green public procurement (GPP) national action plan in 2013. Italy was the first Member State to set, in 2016, an extensive obligation for contracting authorities to include minimum environmental criteria in their purchases. So far it has defined minimum environmental criteria (MEC) for 18 product categories. The obligation to ‘buy green’ applies to all contracting authorities. Italy plans to bring in a monitoring system , but no official data are yet available. The RRP envisages further supporting MEC under GPP, as part of the national strategy for circular economy. There are also activities at regional level. On 21 June 2019, Italy (CONSIP) organised an EIR peer to peer event on circular purchasing and participated at another event on models of communication on the value of ecolabels on 21 October 2020 (in Croatia).

EU Ecolabel and the eco management and audit scheme (EMAS) The number of EU Ecolabel products and EMAS-licensed organisations in a given country provides some indication of the extent to which the private sector and national stakeholders in that country are actively engaged in the transition to a circular economy. It also shows how committed public authorities are to supporting instruments designed to promote the circular economy. As of September 2021, Italy had 13 181 products out of 83 590, and 301 licences out of 2 057, registered in the EU Ecolabel scheme, showing a very high take-up of both products and licences. Moreover, 1 034 organisations in 4 120 sites in Italy are currently registered in EMAS, the European Commission's eco-management and audit scheme. Since the last EIR report in 2019, Italy has regsitered 3 252 new products under the EU Ecolabel, and 51 new organisations have registered in EMAS. By contrast, 24 fewer Ecolabel licences were registered in 2020 than in 2019. Waste management Turning waste into a resource is supported by: (i) fully implementing EU waste legislation, which includes the waste hierarchy, the need to ensure separate collection of waste, the landfill diversion targets, etc.; (ii) reducing waste generation and waste generation per capita in absolute terms; (iii) limiting energy recovery to non-recyclable materials and phasing out landfilling of recyclable or recoverable waste. This section focuses on the management of municipal waste for which EU law sets mandatory recycling targets. Preventing products and materials from becoming waste for as long as possible is the most efficient way to improve resource efficiency and to reduce the environmental impact of waste. Waste prevention and re-use are the most preferred options, and are therefore at the top of the waste hierarchy. The amount of municipal waste generated is a good indicator of the effectiveness of waste prevention measures. After falling for a period, municipal waste generation in Italy has started to increase in recent years. It came to 504 kg/year/inhabitant in 2019, although it remains close to the EU average (501 kg/year/inhabitant), as shown in Figure 4. This indicates that Italy’s economic growth is not yet decoupled from its generation of waste. Figure 4: Municipal waste by treatment in Italy, 2010-2019 Figure 4 also shows municipal waste by treatment, in terms of kilos per inhabitant. The situation varies by region, but managing waste efficiently at national level remains an important challenge for Italy. The partnership agreement 2021-27 cites 2019 data that shows landfilling is still excessive in the least developed regions (31%) and in the transition regions (39.7%), as compared to the most developed regions (14.8%), and concludes that great efforts by certain regions are needed to meet the 10% national target for landfilling by 2035. Nevertheless, Italy has made slow but steady progress over the past decade with a steady increase in recycling (in 2019 with 51% compared with EU average of 48%) as shown in Figure 5 and a decrease in landfilling (21% in 2019) The Italian government’s intention under their waste policy is to increase recycling capacity, which, in turn, should reduce the demand for new incineration plants.. The RRP also contains investments for new waste plants and upgrading of existing plants.

Figure 5: Recycling rate of municipal waste, 2010-2019 As mentioned above, the centre and south of the country perform less well on waste management than the north. Campania continues to pay fines for poor waste management, following a CJEU ruling for its previous waste-management policies. Some progress has been made in Campania to put in place a functional waste management network, with a one third reduction in the daily fine set since June 2021. Moreover, based on information available to the Commission, it appears that a significant number of irregular and substandard landfills operate in Italy. These sites are illegal or do not meet the EU landfilling standards (e.g. they lack pre-treatment of waste or do not process the organic waste fraction) and present serious risks to human health and the environment. Italy was already fined by the CJEU in 2014 for over 200 irregular landfills, and in April 2022, Italy was still paying a fine for 29 irregular landfills; 75% are located in the southern regions. In its judgement issued on 29 March 2019 for a separate case, the CJEU ruled that Italy had failed to ensure the definitive closure and rehabilitation of a further 44 landfills, that do not comply with the requirements under the Landfill Directive. In the meantime, the Commission has ascertained that, though Italy has regularly closed 32 landfills, it has failed to close and rehabilitate the 12 remaining landfills. The Commission therefore called on Italy to comply with EU rules on landfills. Italy is not considered at risk of missing the EU 2020 targets for the reuse and recycling of waste, but continuous efforts are needed to meet the subsequent EU targets. The Commission is currently finalising its analysis of progress on the recommendations from the 2018 Early Warning Reports and an analysis of progress in achieving the 2025 waste recyling targets. This report will be presented at the end of 2022 and will assess the progress made to date. Italy (CINSEDO/Emilia Romagna) used the EIR peer to peer tool to organise an exchange with Belgium (Flanders) on waste management on 26 October 2020. The Italian Zero Waste Communities is worthy of mention, funded by LIFE. Implementation of the 2018 waste legislative package Italy has notified transposition of the 2018 waste package to the Commission. A conformity assessment is now ongoing. Waste management plans and waste prevention programmes are instrumental to achieve sound implementation of the EU’s waste legislation. They set out key provisions and investments to ensure compliance with existing and new legal requirements (e.g. waste prevention, separate collection for a number of specific waste streams, recycling and landfill targets). Revised plans and programmes were due on 5 July 2020. Italy has waste management plans at regional (19) or autonomous province level (2) and some regions have special waste plans (8) for special or hazardous wastes, making a total of 29 plans. Italy has also a national waste prevention programme for 2013-2020, which is also replicated at regional level. On 24 June 2022, Italy adopted the national waste management programme. On 23 June 2021, Italy issued a decree for a waste prevention programme for packaging for 2019-2023. Since the 2019 EIR, Italy has also issued decrees covering end-of-life for processing nappies and tyres. There are currently no geographical gaps in terms of coverage for municipal and special waste plans in Italy but some plans have clear-cut gaps in terms of their policy coverage to bring them into line with the 2018 revision of the Waste Framework Directive. The aforementioned PNGR will be coherent with the waste management plans. Italy has not yet ratified the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships or the International Convention for the Control and Management of Ships' Ballast Water and Sediments. In the 2019 EIR Italy had five priority actions in the field of waste. It has made no progress on the priority to harmonise the low-level of regional landfill taxes across the country. It has made limited progress on the priorities to introduce new policy and economic instruments to promote waste prevention, product re-use and increasing recycling rates, but there are milestones in the Council decision of 13 July 2021 adopting the RRP to meet EU recycling targets at national level and separate collection rates at regional level, so no priority action is proposed for 2022. Italy has made some progress on closing irregular landfills with a steady rate of closure, but this is not completed. Therefore some priority actions are repeated. Italy also received a general priority action in 2019 with regard to signing and ratifying outstanding international agreements. 2022 priority actions ·Harmonise and increase regional landfill tax rates. ·Implement the national waste management programme and ensure regional waste management plans are in line with the revised Waste Framework Directive. Complete closure of non-compliant landfills.

·Ratify international Conventions on ship recycling and on ballast water and sediments. 2. Biodiversity and natural capital The 2030 EU biodiversity strategy adopted in May 2020 aims to put the EU’s biodiversity on a path to recovery and sets out new targets and governance mechanisms to achieve healthy and resilient ecosystems. In particular, the strategy sets out ambitious targets to: (i) protect a minimum of 30% of the EU’s land area and 30% of its sea area and integrate ecological corridors, as part of a true trans-European nature network; (ii) strictly protect at least a third of the EU’s protected areas, including all remaining EU primary and old-growth forests; (iii) effectively manage all protected areas, defining clear conservation objectives and measures, and monitoring them appropriately. The strategy also sets out an EU nature restoration plan – a series of concrete commitments and actions to restore degraded ecosystems across the EU by 2030, and manage them sustainably, addressing the key drivers of biodiversity loss. The Habitats and the Birds Directives are key legislative tools to meet the targets in the EU’s biodiversity strategy for 2030, and are the cornerstone of the EU legislation aimed at conserving of the EU's wildlife. In 2021 Italy’s Ministry for the Ecological Transition started preparing a new national biodiversity strategy for 2030, in line with the contents and targets of the EU biodiversity strategy for 2030. The previous strategy was last reviewed in 2016. Italy has not yet ratified the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS) to the Convention on Biological Diversity for which it had a priority action in 2019. According to information available to the Commission, Italy is proposing legislation to do so in the shortterm; therefore no priority action is proposed in 2022. Nature protection and restoration Natura 2000, the largest coordinated network of protected areas in the world, is the key instrument to achieve the objectives in the Birds and Habitats Directives. These objectives are to ensure the long term protection, conservation and survival of Europe's most valuable and threatened species and habitats and the ecosystems they underpin. The setting up of a coherent Natura 2000 network, the designation of Sites of Community Importance (SCI) as Special Areas of Conservation (SAC) and the setting conservation objectives and measures for the Natura 2000 sites are key milestones towards meeting the objectives of the Directives. Setting up a coherent network of Natura 2000 sites Italy hosts 132 habitat types and 340 species covered by the Habitats Directive. The country also hosts populations of 124 bird taxa listed in Annex I to the Birds Directive. By 2021, 19.1% of the territory of Italy was covered by Natura 2000 (EU average 18.5%), see Figure 10. Special Protection Areas (SPAs) classified under the Birds Directive cover 13.4% of the territory (EU average 12.8%) and SCIs under the Habitats Directive cover 14.3% (EU average 14.2%) of Italy’s territory. The latest assessment of the Italian Natura 2000 network shows that insufficiencies remain in designating several species and habitat types under the Habitats Directive as well as a number of bird species under the Birds Directive. Therefore, Italy must still complete its Natura 2000 network, in particular the marine network. As a consequence, on 9 June 2021, the Commission sent Italy a letter of formal notice to urge the national authorities to take the measures needed to comply with the requirements of these two Directives. Considering both Natura 2000 and other nationally designated protected areas, Italy legally protects 21.4% of its terrestrial areas (EU27 average 26.4%) and about 5.4% of marine areas (EU27 average 10.7%). Figure 6 shows the situation at EU level for terrestrial and marine sites in terms of meeting the EU biodiversity strategy 2030 target of 30%.

Figure 6: Marine & terrestrial protected area coverage 2021



Figure 7: Natura 2000 terrestrial protected area coverage, 2021 Designating Special Areas of Conservation (SACs) and setting conservation objectives and measures The six-year deadline set under the Habitats Directive to designate SCIs as SACs and set appropriate conservation objectives and measures has expired for all sites in Italy. Nevertheless, 12 SCIs have not yet been designated as SACs. Site specific conservation objectives and measures have not been adopted for all designated SACs and the quality of those adopted does not fulfil the required standards. An infringement procedure is ongoing to address these problems. Progress in maintaining or restoring favourable conservation status of species and habitats The results of the Article 17 report on the Habitats Directive and the Article 12 report on the Birds Directive on progress towards maintaining or restoring favourable conservation status of species and habitats are key to measure the performance of Member States. According to the report submitted by Italy on the conservation status of habitats and species covered by Article 17 of the Habitats Directive for the period 2013-2018, the share of assessments of habitats in good conservation status in 2018 was 9.9%, less than the 22.2% reported under the previous reporting period (2007-2012), see Figure 8. For protected species, the share of assessments in good conservation status in 2018 was 43.4%, an increase on the 39.6% reported in the previous period (2007-2012), see Figure 9. On the conservation of birds, the population of 47% of breeding species showed short-term increases or were stable (for key wintering species, this figure was 44%). At the same time, the share of habitats in a bad conservation status rose to 38.7% and the share of assessments for species in bad conservation status remained stable at around 16%. The categories of habitats in the worst conservation status are freshwater habitats, grasslands and dunes habitats. Freshwater fish species have been reported as the species group in the worst conservation status. The main pressure on habitats and species identified in Italy’s report are agriculture, alien species and the development, construction and use of residential, commercial, industrial and recreational infrastructure and areas.

The Commission receives many complaints about poor implementation of the Nature Directives in Italy, namely the lack of effective protection of designated sites (from several types of development projects and activities) and of protected species (e.g. poaching of wild birds). Figure 8: Assessments on conservation status for habitats for 2007-2012 and 2013-2018 reporting periods Figure 9: Assessments on conservation status for species for 2007-2012 and 2013-2018 reporting periods The LIFE programme has been widely used in Italy for nature purposes. Three notable example projects are: the integrated project GESTIRE 2020 for action plans on Habitats Directive species of flora, bats and amphibians and guidelines on invasive alien species (IAS); LIFE BRENTA 2030, which concerns green infrastructure/nature-based solutions for the Brenta river, also supporting the Water Framework Directive. This project provides an innovative business model that allows the financing and therefore the perpetuation of the actions foreseen by the project itself.; and LIFE WolfAlps which won a LIFE Award in 2019. Italy has also the highest number (23) of projects in the EU funded under Interreg for Natura 2000 . As part of the RRP, in 2022 Italy will bring in administrative simplifications and it will develop digital services for visitors to national parks and marine protected areas. In the 2019 EIR Italy had four priority actions to: finalise SCIs and SPAs for marine areas and to finalise conservation objectives of sites where only limited progress has been made. Italy adopted new national guidelines to implement assessment procedures under the Habitats Directive in December 2019 but they are not yet fully transposed or implemented in all regions, so there is limited progress on this front. Another priority action was to provide resources from competent authorities to implement conservation measures and species specific action plans. Here Italy has made limited progress. The last priority action was to fully implement the national action plan to cease the illegal killing of birds; only limited progress made here. Bringing nature back to agricultural land and restoring soil ecosystems Agricultural land The biodiversity strategy works alongside the new farm to fork strategy and the new common agricultural policy (CAP) to support and achieve the transition to fully sustainable agriculture. The biodiversity and farm to fork strategies have set four important targets for 2030: - a 50% reduction in the overall use of – and risk from – chemical pesticides; - a 50% reduction in the use of more hazardous pesticides; - a 50% reduction in losses of nutrients from fertilisers while ensuring there is no deterioration of soil fertility (which will result in a 20% reduction in the use of fertilisers); - bring back at least 10% of agricultural area under high-diversity landscape features and increase areas under organic farming to at least 25%.

As shown in Figure 10, Italy has an estimated 15.97% of area under organic farming, which is above the EU average of 9.07% (2020). Figure 10: Share of total utilised agricultural area occupied by organic farming per Member State in 2020 Italy’s rural environment is diverse due to the wide range of morphological regions. In northern regions and flat regions in the south of the country, there is intense agriculture. In mountainous regions, it is more extensive. Italy faces issues with soil erosion, flood risk, climate change (droughts and extreme weather events) and eutrophication. The farmland bird index shows a decline from 92 in 2011 to 77 in 2017 (2000 = 100). Soil ecosystem Soil is a finite and extremely fragile resource. It is increasingly degrading in the EU. The new EU soil strategy, adopted on 17 November 2021, stresses the importance of soil protection, of sustainable soil management and of restoring degraded soils to achieve the Green Deal objectives as well as land-degradation neutrality by 2030. This entails: (i) preventing further soil degradation; (ii) making sustainable soil management the new normal; (iii) taking action for ecosystem restoration One factor degrading the land is the area of soil that is sealed or artificialised (Figure 11). The net land taken per year in the period 2012-2018 can be seen as a measure of one important pressure on nature and biodiversity - land use change - which constitutes at the same time an environmental pressure on people living in urbanised areas. Despite a reduction in the last decade (land take was over 1000 km2/year between 2000-2006), land take in the EU28 still amounted to 539km2/year between 2012-2018 . The net land take concept combines land take with land return to non-artificial land categories (re-cultivation). Although some land was re-cultivated in the EU28 in the period 2000-2018, 11 times more land was taken. Italy ranks above the EU average on net land take, with 55.2 m2/km2 in 2012-2018 (against the EU27 average of: 83.8 m2/km2). In 2018, Italy updated its reporting on land degradation following the next Performance Review and Implementation System (PRAIS3) reporting platform under the United Nations Convention on Combating Desertification (UNCCD). It listed actions to combat degradation. Figure 11: Land take and recultivation in EU27 (m2/km2) 2012-2018

Furthermore, Italy has committed to set land degradation neutrality targets under the UNCCD. The 2019 EIR mentioned that a law on containing the loss of land and re-using soil that has been built on is with the Parliament; this is still the case. The partnership agreement 2021-27 notes that the diffused presence of polluted sites, if decontaminated, represents an opportunity for new productive investments and services, without increasing soil take, especially in the southern Italy. Forests and timber The EU Forest Strategy for 2030 adopted in July 2021 is a part of the ’Fit for 55’ Package. The Strategy promotes the many services that forests provide. Its’ key objective is to ensure healthy, diverse and resilient EU forests, which contribute significantly to strengthened biodiversity and climate ambition. Forests are important carbon sinks and their conservation efforts are vital for the EU’s vision of achieving climate neutrality by 2050. Out of the 27% of EU forest area protected under the Habitats Directive, less than 15% of assessments show a favourable conservation status. Bad conservation status increased from 27% to 31% in the EU compared to 2015. In Italy, forests cover 29.97% of land . 93 000 ha in Italy is covered by primary forests. In Italy, over 90% of the assessments reveal areas in a bad to poor status, see Figure 12. Figure 12: Conservation status of forests protected under the Habitats Directive in EU Member States, 2013-2018 (% assessments) The EU Timber Regulation (EUTR), prohibits the placing on the EU market of illegally harvested timber. In accordance with the EUTR, EU Member States competent authorities must conduct regular checks on operators and traders, and apply penalties for non-compliance. With the amendment of Article 20 of the EUTR, biennial reporting became annual and covers the calendar year as of 2019. Between March 2017 and February 2019, Italy carried out 1 501 checks on domestic timber operators. It also carried out 285 checks on operators importing timber. It is estimated that Italy had 30 210 operators placing imported types of timber on the internal market over the reporting period. The new Deforestation Regulation38 will repeal and replace the EU Timber Regulation, as it will essentially integrate and improve the existing system to monitor the legality of timber. Invasive alien species (IAS) IAS are a key cause of biodiversity loss in the EU (alongside changes in land and sea use, overexploitation, climate change and pollution). Besides inflicting major damage on nature and the economy, many IAS also facilitate the outbreak and spread of infectious diseases, posing a threat to humans and wildlife.

The implementation of the EU Invasive Alien Species Regulation and other relevant legislation must be stepped up. The biodiversity strategy for 2030 aims to manage recognised invasive alien species and decrease the number of ‘red list’ species they threaten by 50%. The core of Regulation (EU) 1143/2014 on invasive alien species (the IAS Regulation) is the list of IAS of EU concern. The total number of IAS of Union concern is currently 66, of which: 30 are animal species; 36 are plant species; 41 are primarily terrestrial species; 23 are primarily freshwater species; 1 is a brackish-water species and 1 is a marine species. According to a 2021 report on the implementation of the IAS Regulation, progress was being made towards certain objectives such as creating a coherent framework for addressing IAS at EU level and increasing awareness of the problem of IAS. The report also identified some challenges and areas for improvement. However, given that implemention deadlines for the IAS Regulation were staggered from July 2016 to July 2019, it is still too early to draw conclusions on several aspects of implementation. Another 2021 report on the baseline distribution of IAS shows that from the 66 species on the EU list, 39 have been observed in the environment in Italy. The spread can be seen in Figure 13. Figure 13: Number of invasive alien species of EU concern, based on available georeferenced information for Italy, 2021 An infringement case is ongoing for Italy since it failed to draw up and implement a single action plan or a set of action plans fulfilling the requirements specified in Article 13 of the IAS Regulation by 13 July 2019 and to transmit it to the Commission without delay. Italy is involved in the EU-wide LIFE Stop Vespa project which aims to use radar to trace the route of the Vespa velutina. The LIFE ASAP project aims to increase the awareness of IAS and to promote the correct and efficient management of IAS by public entities in Italy. 2022 priority actions ·the completion of the Natura 2000 network, namely its marine component; ·setting appropriate, site-specific conservation objectives and measures, and full implementation of them, in line with the specific needs and priorities identified in the updated prioritized action frameworks (PAFs) adopted by the regions; ·more effective enforcement of the nature protection provisions, greater administrative capacity and improved management of designated sites. Marine ecosystems

The EU Biodiversity Strategy 2030 aims to substantially reduce the negative impacts on sensitive species and habitats in marine ecosystems and to achieve good environmental status as well as eliminate or reduce the incidental catches of protected, endangered, threatened and sensitive species to a level that allows species recovery and conservation . The Marine Strategy Framework Directive (MSFD) requires Member States to achieve good environmental status (GES) for their marine waters. To that end, Member States must draw up marine strategies for their marine waters, and cooperate with Member States sharing the same marine region or sub-region. These marine strategies comprise different steps to be developed and implemented over six-year cycles. The MSFD also requires Member States by 15 October 2018 to define a set of GES characteristics for each descriptor (Article 9), and to provide an initial assessment of their marine waters (Article 8). The Commission then assesses whether this constitutes an appropriate framework to meet the requirements of the Directive. The Commission assessed Italy’s 2018 determinations of GES for each MSFD’s 11 descriptors and determined their level of adequacy in relation to the Commission Decision on criteria and methodological standards on Good Environmental Status of marine waters. A good or very good score indicates that the national determinations of GES are well aligned with requirements of the Commission GES Decision, providing qualitative and quantitative national environmental objectives to be achieved for their marine waters (Figure 14). Figure 14: Level of adequacy of GES determination by Italy (MAD, MIC and MWE regions) with criteria set under the Commission GES Decision - Article 9 (2018 reporting exercise) Italy is included in three marine sub-regions: ·In MAD-Mediterranean: Adriatic Sea, 6 out of 11 determinations of GES were assessed as good or very good. The national determination of GES by Italy is coherent for 6 out of the 11 descriptors. ·In MIC- Mediterranean: Ionian Sea and Central Mediterranean Sea, 6 out of the 11 determinations of GES were assessed as good or very good. The national determination of GES by Italy is coherent for 6 out of 11 descriptors. ·In MWE- Mediterranean: Western Mediterranean Sea, 6 out of the 11 determinations of GES were assessed as good or very good. The national determination of GES by Italy is coherent for 6 out of the 11 descriptors. The MSFD also requires that Member States make an assessment of the current environmental status of their marine waters in relation to the determination of GES. A good or very good score indicates that a Member State has good capabilities to assess their marine environment in accordance with the requirements set out in the Commission GES Decision (Figure 15). Figure 15: Level of adequacy of national assessment of Italy’s marine environment (MAD, MIC and MWE regions) with criteria set under the Commission GES Decision - Article 8 (2018 reporting exercise) In the marine sub-region MAD-Mediterranean: Adriatic Sea, 6 descriptors out of the 11 were scored as good or very good. Italy’s assessment of its marine environment is coherent with the requirements set under the Commission GES Decision for 6 out of the 11 descriptors. In the marine sub-region MIC-Mediterranean: Ionian Sea and Central Mediterranean Sea, Italy scored 5 descriptors out of the 11 as good or very good. Italy’s assessment of its marine environment is coherent with requirements set under the Commission GES Decision for 5 out of the 11 descriptors. In the marine sub-region MWE-Mediterranean: Western Mediterranean Sea, Italy scored 5 descriptors out of the 11 as good or very good. Italy’s assessment of its marine environment is coherent with requirements set under the Commission GES Decision for 5 out of 11 descriptors. In the partnership agreement for 2021-27, Italy plans to take actions under the EMFAF to improve marine stocks, illegal fishing and reducing pollution including marine litter.

Italy has used the LIFE programme for notable projects such as CLEAN SEAS addressing marine litter and LIFE SEPOSSO for a project on sea grass Posidonia (the results of which are taken forward in the RRP). Indeed, Italy plans under the RRP to have mapped 90% of the seabed and coastal zones by 2025 with 20% restored by action under 22 large-scale projects. Italy has not yet ratified the Protocol for the Protection of the Mediterranean Sea against Pollution Resulting from the Exploration and Exploitation of the Continental Shelf and the Seabed and its Subsoil (Offshore Protocol to the Barcelona Convention) or the Protocol on Integrated Coastal Zone Management in the Mediterranean (ICZM) (Protocol to the Barcelona Convention). In the 2019 EIR, Italy had four priority actions. Three are considered fulfilled: one on providing the reporting due under the MSFD; and two on providing more information about measures to address pressures, where some progress has been made. Italy also received a general priority action in 2019 on signing and ratifying outstanding international agreements. As highlighted in the Commission’s report on the implementation of the MSFD, although regional cooperation has improved since adoption of the MSFD, more cooperation is needed to attain full regional coherence of the marine strategies, as required by the Directive. Furthermore, in March 2022, the European Commission published a Communication with recommendations for Member States. According to the Commission’s assessment, Member States must step up action to determine good environmental status and use of the criteria and methodological standards set out in the Commission GES Decision. The above considerations form the basis for the 2022 priority actions. 2022 priority actions ·ensure regional cooperation with Member States sharing the same marine (sub)region to address predominant pressures; ·implement the recommendations made by the Commission in the staff working document accompanying the communication on recommendations per Member States and region on the 2018 updated reports for Articles 8, 9 and 10 of the MSFD; ·ratify the Offshore Protocol to the Barcelona Convention and the ICZM Protocol to the Barcelona Convention. Ecosystem assessment and accounting The EU biodiversity strategy for 2030 calls on Member States to better integrate biodiversity considerations into public and business decision making at all levels and to develop natural capital accounting. The EU needs a better-performing biodiversity-observation network and more consistent reporting on the condition of ecosystems. In Italy, law 221/2015 on environmental measures for promoting the green economy and limiting the excessive use of natural resources, established the adoption of annual reports in order to promote measure of physical and economic aspects of natural capital stocks and flows. It also brought in ex ante and ex post assessments of the effects of public policies on natural capital and ecosystem services. The second report was detailed in the 2019 EIR. The fourth report was published in April 2021. This report is very much aligned with the priorities under the RRP and estimates that environmentally harmful subsidies damaging biodiversity accounted for at least EUR 28 billion in 2018. The third report was published in 2019. Pressure on natural capital, habitat fragmentation and land use of natural and semi-natural ecosystems are analysed at national and eco-regional scale, as they are primary concerns in ecosystem conservation and health. Great attention is devoted to the impact of climate change on forest ecosystems and to forest fires and drought, very topical and highly sensitive issues for Italy. Italy has provided updated information and therefore has made encouraging progress since January 2016 (Figure 16). This assessment is based on 27 implementation questions and updated every six months. Progress on ecosystem accounting implementation is assessed at national scale based on 13 questions. Figure 16:, January 2016-

3. Zero pollution Clean air EU clean-air policies and legislation need to significantly improve air quality in the EU, moving the EU closer to the quality recommended by the WHO and curbing emissions of key air pollutants. Air pollution and its impacts on ecosystems and biodiversity should be further reduced with the long-term aim of not exceeding critical loads and levels. This requires strengthening efforts to reach full compliance with EU clean-air legislation and defining strategic targets and actions for 2030 and beyond. The 2030 zero-pollution action-plan targets are to reduce the health impacts of air pollution by 55% and to reduce the EU ecosystems threatened by air pollution by 25%, compared to 2005.

The EU has developed a comprehensive suite of clean air legislation , which sets health-based air quality standards and emission reduction commitments for a number of air pollutants. However, at the same time, air quality in Italy continues to give cause for serious concern. The latest available annual estimates (for 2019) by the European Environment Agency indicate some 49 900 premature deaths (or 504 500 years of life lost (YLL)) attributable to fine particulate matter concentrations, 3 170 (33 200 YLL) to ozone concentrations and 10 640 (107 600 YLL) to nitrogen dioxide concentrations . Emissions of key air pollutants have decreased significantly in Italy over the last years, while GDP growth continued (see Figure 17). According to the latest projections as submitted under Article 10(2) of the National Emission reduction Commitments Directive (NECD). Italy projects to reach its commitments on reducing emissions of all air pollutants covered by the Directive for the period 2020-2029 and for 2030 onwards. The latest inventory data submitted by Italy, prior to review by the Commission, indicate that Italy is in compliance with the emission reduction commitments for all pollutants in 2020. Italy submitted its national air pollution control programme (NAPCP) on 22 September 2020. Figure 17 Emissions of main air pollutants/GDP in Italy 2005-2019 Figure 18 shows emissions of PM2.5 and NOx by economic sector. Figure 18: PM2.5 and NOx emissions by sector in Italy, 2019 Italy has not yet ratified the amended Gothenburg Protocol, Heavy Metals Protocol and POPs Protocol under the UNECE Air Convention. For 2020, Italy registered exceedances above the limit values established by the Ambient Air Quality Directive for nitrogen dioxide (NO2) in 10 air quality zones and for particulate matter (PM10) in 33 zones. In addition, the target values for ozone concentration were not met for several air quality zones. Persistent breaches of air quality requirements, which have severe negative effects on health and environment, are being followed up by the European Commission through infringement procedures (mainly over PM10 and NO2 exceedances) covering all Member States concerned. This included Italy for exceeding the limit values for PM10, PM2.5 and NO2 limit values. For exceedances of PM10 limit values and for NO2, the CJEU has delivered judgements,C-644/18; COM vs Italy for PM10 and C-573/19; COM vs Italy for NO2, confirming non-compliance with Directive 2008/50/EC. The aim is that appropriate measures are put in place to bring all air quality zones into compliance. The agreements (pacts) reached between the government and the regions to manage air pollution across the country can help, including the measures taken after the Turin Clean Air Dialogue in June 2019 . Italy has used the LIFE programme notably for the PREPAIR integrated project, which assesses air quality in the Po Valley (also mentioned in the 2019 EIR). In the 2019 EIR, Italy received four priority actions. The first was related to taking specific action under the NAPCP and the national energy and climate plan (NECP); here Italy has made limited progress so it is reiterated. The second and third actions addressed reductions of nitrogen oxides and particulate matter, including through planning, fiscal and energy choices; here Italy has made some progress notably through the RRP, but there is a need to comply with WHO and EU standards. The fourth priority action was to upgrade and improve air quality monitoring and ensure timely reporting; here Italy has made some progress with the NAPCP being adopted. Italy also had a general priority action in 2019 on signing and ratifying outstanding international agreements. 2022 priority actions · take action under the NAPCP to reduce emissions from the main sources mentioned above; ·ensure full compliance with the EU air quality standards and maintain the reduction in emissions of air pollutants, and reduce adverse air pollution impacts on health and economy with a view to reaching WHO guideline values in the future;

·accelerate the ratification of the amended Gothenburg Protocol, Heavy Metals Protocol and POPs Protocol under the UNECE Air Convention. Industrial emissions The main objectives of EU policy on industrial emissions are to: (i) protect air, water and soil; (ii) prevent and manage waste; (iii) improve energy and resource efficiency; (iv) clean up contaminated sites. To achieve this, the EU takes an integrated approach to the prevention and control of routine and accidental industrial emissions. The cornerstone of the policy is the Industrial Emissions Directive (IED) . The Commission tabled a proposal in April 2022 . The revision seeks to improve the Directive’s contribution to the zero-pollution objective, as well as its consistency with climate, energy and circular economy policies. The overview of industrial activities regulated by the IED set out below is based on data reported to the EU Registry (2018). In Italy, around 6 470 industrial installations are required to have a permit based on the IED. The distribution of installations is shown in the Figure 19. The industrial sectors in Italy with most IED installations in 2018 were intensive rearing of poultry and pigs (33%), followed by the waste management sector, including landfills (20%), the production and processing of metals (15%), chemicals production (6%) and mineral production (6%). Figure 19: Number of IED industrial installations per sector in Italy (EU Registry, 2018) The industrial sectors identified as contributing the largest burden to the environment for emissions to air were the energy sector for sulphur oxides (SOx), nitrogen oxides (NOx) and arsenic (As); the production and processing of metals (in particular iron and steel) for cadmium (Cd), chromium (Cr), copper (Cu), mercury (Hg), nickel (Ni), lead (Pb), zinc (Zn), particulate matter (PM2.5) and dioxins; the mineral industry for NOx and PM2.5; surface treatment using organic solvents for non methane volatile organic compounds (NMVOCs); and intensive rearing of poultry and pigs for ammonia (NH3). The breakdown is shown in Figure 20. Figure 20: Emissions to air from IED sectors and rest of national total air emissions in Italy, 2018

The European Environment Agency has identified two thermal power stations, Centrale Termoelettrica Federico II and Enel Produzione SpA, which are among the 30 industrial facilities in Europe generating the highest absolute damage costs from emissions of the main air pollutants and greenhouse gases aggregated over the five year period 2013-2017. The iron and steel plant, ILVA SpA in Taranto, ranked 32 among all facilities in 2017. The environmental burden for industrial emissions to water mainly result from the chemicals sector and other waste management activities for total nitrogen, phosphorous and total organic carbon; from refineries and food and drink industries for polycyclic aromatic hydrocarbons (PAH), and from the chemical sector, ferrous metals and other waste management activities for heavy metals. The breakdown, based on E-PRTR data, is given in Figure 21. Figure 21: Relative releases to water from industry in Italy, 2018 The EU approach for enforcement under the IED creates strong rights for citizens to have access to relevant information and to participate in the permitting process. This empowers citizens, and NGOs, to ensure that permits are appropriately granted and the conditions of these permits are compiled with. As part of environmental inspection, competent authorities carry out site visits at IED installations to take samples and to gather necessary information. According to Article 23(4) of the IED, site visits must be carried out between once a year and once every 3 years, depending on the environmental risks posed by the installations. In 2018, Italy carried out 2 665 site visits, the majority of which to the waste management sector, including landfills (38%), followed by installations for the intensive rearing of poultry or pigs (15%), production and processing of metals (15%) and the chemicals sector (10%); see Figure 22. Figure 22: Number of inspections in IED installations in Italy in 2018 The development of best available techniques (BAT) reference documents (BREFs) and BAT conclusions ensures good collaboration between stakeholders and enables better implementation of the IED. Since the last EIR report, BAT Conclusions were adopted for waste incineration, for the food, drink and milk industries and for surface treatment using organic solvents including wood and wood products preservation with chemicals. The Commission relies on the efforts of national competent authorities to implement the legally binding BAT conclusions and associated BAT emission levels in environmental permits. This should result in considerable and continuous reductions in pollution. On 29 October 2018, Italy participated in the EIR peer to peer workshop on ammonia emissions from agriculture. In 2019, Italy had priority actions to review permits so that they comply with new adopted BAT conclusions and to strengthen control and enforcement to ensure compliance The Commission gave follow up to the reporting by Italy to the EU Registry, which did not lead to any specific findings. The Commission is currently verifying the reported information with Italy on the permits granted for each installation in the scope of the IED. In 2019, Italy also received a priority action to address emissions to air from the ILVA steel mill in Taranto, where there has been limited progress. 2022 priority actions ·continue addressing emissions to air from the ILVA steel mill in Taranto. Major industrial accidents prevention – SEVESO

The main objectives of EU policy on the prevention of major industrial accidents are to: (i) control major accident hazards involving dangerous substances, especially chemicals; (ii) limit the consequences of such accidents for human health and the environment; (iii) continuously improve prevention, preparedness and response to major accidents. The cornerstone of the policy is Directive 2012/18/EU (the Seveso-III Directive) . The overview below of industrial plants regulated by the Seveso-III Directive (hereafter ‘Seveso establishments’), is based on data reported to the eSPIRS database (2018) and the Italy report on implementation of the Seveso-III Directive for the period 2015-2018 . In Italy, among the 994 Seveso establishments, 479 are categorised as lower-tier establishments (LTE) and 515 as upper-tier establishments (UTE) – based on the quantity of hazardous substances likely to be present. The UTE are subject to more stringent requirements. Changes in the number of Seveso establishments in Italy are illustrated in Figure 23. Figure 23: Number of Seveso establishments in Italy, 2011, 2014 and 2018 According to Italy, an external emergency plan (EEP) is required for 512 UTEs. In 2018, 466 UTEs had an EEP and 190 of these EEPs had been tested over the last three years. The summary is shown in Figure 24. The establishment of EEPs is essential to enable the proper preparation and effective implementation of the necessary actions to protect the environment and the population in the event of a major industrial accident. Figure 24: Situation regarding EEP in Italy, 2018 The information to the public referred to in Annex V to the Seveso-III Directive – especially about how the public concerned will be warned in the event of a major accident; the appropriate behaviour in the event of a major accident, and the date of the last site visit – are permanently available for 30% of Seveso establishments in Italy. The share of UTE for which information on safety measures and requisite behaviours were actively made available to the public over the last years are presented in Figure 25. This is an important provision of the Seveso-III Directive as the knowledge of these information by the public may reduce the consequences of a major industrial accident. Figure 25: Share of UTE for which information on safety measures and requisite behaviours were actively made available to the public in Italy, 2011, 2014 and 2018

2022 priority actions ·strengthen control and enforcement to ensure compliance with Seveso-III Directive provisions, especially on information to the public and on EEPs. Noise The Environmental Noise Directive provides for a common approach to avoid, prevent and reduce the harmful effects of exposure to environmental noise, although it does not set noise limits as such. The main instruments it uses in this respect are strategic noise mapping and planning. A relevant 2030 zero pollution action plan target is a reduction by 30% of the share of people chronically disturbed by transport noise compared to 2017. Excessive noise from aircraft, railways and roads is one of the main causes of environmental health‐related issues in the EU. It produces ischaemic heart disease, stroke, interrupted sleep, cognitive impairment and stress. In Italy, based on a limited set of data, environmental noise is estimated to cause at least around 1 800 premature deaths and 8 500 cases of ischaemic heart disease every year. Moreover, some 1 million people suffer from disturbed sleep. In Italy, the share of people exposed to noise increased by 1% between 2012 and 2017. On the basis of the latest full set of information that has been analysed, noise mapping of agglomerations, roads and railways is complete . In the 2019 EIR, Italy received two priority actions to complete noise maps and action plans, where there has been some progress as detailed above. Therefore no priority actions are proposed for 2022. Water quality and management EU legislation and policy requires significant reduction of the impact of pressures on transitional, coastal and fresh waters (including surface and ground waters). Achieving, maintaining or enhancing good status of water bodies as defined by the Water Framework Directive will ensure that EU citizens benefit from high standards for safe drinking and bathing water, and that the nutrient cycle (nitrogen and phosphorus) is managed in a more sustainable and resource-efficient way. Water Framework Directive The Water Framework Directive is the cornerstone of the EU water policy in the 21st century. The Water Framework Directive and other water related legislation set the framework for sustainable and integrated water management, which aims at a high level of protection of water resources, prevention of further deterioration and restoration to good status. By March 2022, all Member States had to report the third generation of River Basin Management Plans (RBMPs) under the Water Framework Directive. Italy has recently adopted and reported its third generation RBMPs. The Commission will assess the reported status and progress, checking how the findings identified in the assessment of the second generation RBMPs have been addressed. In December 2021, the Commission published the sixth Implementation Report, which provides an interim assessment on progress of the implementation of the programmes of measures and on monitoring of the new priority substances. The assessment report for Italy concluded that a comprehensive overview of progress in implementating Italy’s programme of measures (PoMs) is lacking, given that reported data only refer to three out of Italy’s eight river basin districts (RBDs) (Eastern Alps RBD, Central and South Apennines RBDs). However, it is noted that measures have started in five of the eight RBDs, and in other areas, all planned measures have either started or been completed. Based on the second generation RBMPs reporting and data published 2020, in Italy 41.8% of all surface water bodies achieved good ecological status (with 18.4% unknown status) and 71.7% have good chemical status (with 19.8% in unknown status). For groundwater, 30.3% failed to achieve good chemical status and 19.0.% are in a poor quantitative status. Figure 26 below illustrates the proportion of surface water bodies in Italy and other European countries that failed to achieve good ecological status. Figure 26: Proportion of surface water bodies (rivers, lakes, transitional and coastal waters) in less than good ecological status per River Basin District Figure 27 shows the proportion of surface water bodies in Italy and other European countries that failed to achieve good chemical status. For Italy, it is 8.5%, if one includes water bodies failing due to substances behaving as ubiquitous PBTs (persistent, bio-accumulative, toxic). Without uPBTs, 3% of surface water bodies fail to achieve good chemical status.

Figure 27 Percentage of water bodies not achieving good chemical status Under the IED framework, it should be stressed that Italy achieved a significant reduction over the last decade (24.8%) in industrial releases of heavy metals like Cd, Hg, Ni, Pb and (23.1%) in total organic carbon (TOC) to water. The total volume of water abstracted annually (corresponding to the 2019 baseline) in Italy from surface and groundwater sources is 39 253.45 hm3 . The percentage for water abstraction per sector is 42.15% for agriculture, 23.82% for public water supply, 14.66% for electricity cooling, 19.37% for manufacturing, as illustrated in Figure 28. Italy uses a register to monitor water abstraction. In Italy, abstraction or the use of public water without a permit or licence issued by the competent authority is prohibited. There is a specific administrative procedure to follow to obtain a water abstraction licence, which culminates in the adoption of a specific decision (the licence award) by the competent authority for the geographical area. Italy has a high leakage rate nationally in its water supply system (42% leakage rate in 2018), with issues particularly in the south of the country with Campania at 46.7%,and Sicily at 50% (ISTAT data). Figure 28. Water abstraction per sector in Italy In Italy, the water exploitation index plus (WEI+) was 15.58 in 2017, which is below the 20% that is generally considered as an indication of water scarcity (Figure 29). Though it ranks above the EU average Italy is ranked 6th (from high to low score) in the EU in terms of WEI+ . Figure 29 Water exploitation index plus (WEI+) inside EU in 2017 The increasing demand for water for multiple purposes and the intensification of severe weather conditions due to climate change have put a significant strain on freshwater supplies in Italy. To overcome water shortages, Italy has paid special attention to water reuse in recent years and treated wastewater has been considered as a potential alternative to water supply. Italy’s RRP supports the green transition by planning key investments to improve waste and water management (EUR 11.2 billion). These investments are accompanied by important reforms that aim to improve the efficiency in the use and management of water resources and local public services. Italy has a specific issue with the correct application of Article 4.7 of the Water Framework Directive to hydropower projects. Floods Directive As mentioned above, in December 2021 the Commission published the sixth implementation report on the Directive. It includes a review and update of the preliminary flood risk assessments during the second cycle (2016-2021). According to the assessment report, Italy has developed a detailed national database of flood events and their impacts, providing extensive information for analysis of past floods. Italy also used a broad range of criteria to identify potentially significant future floods and presented a clear, step-by-step process for designating areas of potential significant flood risk (APSFRs) based on past and future flood analyses. However, the assessment identified that Italy did not include clear thresholds for past significant floods and long-term developments, other than climate change, when identifying potential adverse future flood consequences. Italy has not yet adopted and reported the second generation of flood risk management plans (FRMPs) under the Floods Directive. The European Commission will assess progress since the first flood risk management plans and publish a new report, as in 2019. Project examples to deal with flooding have been presented in the EIR 2017 and 2019. The total damage caused by October-November 2019 flooding, including Venice, was EUR 5.6 billion, for which a solidarity fund application is being processed. The partnership agreement for 2021-27 notes that 1.3 million people (2.2% of the population) live in areas at risk from landslides) and 6.2 million people (10.4% of the population) live in areas with a medium risk of flooding. Most of the funds for water in the RRP are earmarked to manage hydrogeological risks (EUR 8.5 billion), which will be accompanied by appropriate governance reforms. The RRP and cohesion policy investments favour nature-based solutions as a default approach. On 29-31 May 2019, Italy participated in a study visit to Hungary under the EIR peer to peer visit on hydrometeorological monitoring and on an early warning system for natural hazards. Drinking Water Directive

On the Drinking Water Directive , no new assessment of the quality of drinking water is available since the 2019 EIR. The quality of drinking water in Italy is an issue with an infringement for exceeding arsenic and fluoride levels in Lazio. The recast Directive entered into force on 12 January 2021, Member States have until 12 January 2023 to transpose it into their national legal system. Italy will have to comply with these reviewed quality standards. Bathing Water Directive On the Bathing Water Directive, Figure 30 shows that in 2020, out of 630 bathing waters, 89.2% were of excellent quality in Italy. Figure 31 shows the evolution. Figure 30: Bathing water quality in Europe in the 2020 season

Figure 31: Bathing water quality 2017-2020 Nitrates Directive The latest Commission report on the implementation of the Nitrates Directive , for 2016-2019 , warns that nitrates are still causing harmful pollution to water in the EU. Excessive nitrates in water are harmful to both human health and ecosystems, causing oxygen depletion and eutrophication. Where national authorities and farmers have cleaned up waters, it has had a positive impact on drinking water supply and biodiversity, and on the sectors such as fisheries and tourism that depend on them. Nevertheless, excessive fertilisation remains a problem in many parts of the EU. According to the latest report on implementation of the Nitrates Directive, referring to the change between the periods 2008-2011 and 2016-2019, groundwater quality has slightly improved since the previous reporting period. The percentage of stations reaching or exceeding 40 or 50 mg nitrates per litre decreased from 5.8% to 5.6% and from 12.7% to 12.6%, respectively. As regards the situation concerning nitrate concentrations in surface water was stable during the period 2008-2011 at 0.3% (exceeding 40 mg nitrate per litre), but it increased from 0.2% to 0.6% (exceeding 40 mg nitrate per litre) during the period 2016-2019 . There are hotspots, with a nitrate concentration above 50 mg/litre with a few hotspots where the levels are increasing. A high number of waters that are found to be eutrophic. A number of ground water monitoring stations with nitrate concentrations above 50 mg/litre and a high level of surface waters found to be eutrophic are located outside the nitrate vulnerable zones (NVZ). Several regions have received derogations in the past (mentioned in the EIR 2019). Urban Wastewater treatment Directive Italy has, over the years, encountered serious difficulties in meeting its obligations under the Urban Waste Water Treatment Directive (UWWTD). Overall, in Italy, the compliance rate is 56% lower than the EU average (76%) in 2018, see Figure 32. Figure 32: The proportion of urban waste water that meets all requirements of the UWWTD (collection, biological treatment, biological treatment with nitrogen and/or phosphorus removal) in compliant urban areas of the UWWTD (‘compliance rate’) Despite the improvement in compliance over the years, for which the use of EU funding has been fundamental, incomplete implementation of the UWWTD has led to several rulings of the CJEU against Italy. A total of 895 agglomerations have been found to be in breach of the EU Directive, affecting a population equivalent of over 26.7 million people. An example of good practice has been to use the EIR peer to peer tool for hosting a workshop (CINSEDO hosted) on exchanging best practices with Belgium (Flanders) on urban wastewater treatment on 26 October 2020, with a follow-up event on sludge on 23 June 2021. In the 2019 EIR Italy had four priority actions. Firstly to harmonise different regional approaches to pressures for the Water Framework Directive; this cannot be evaluated given the lack of an assessment of the third generation RBMPs. The second was to increase metering for water abstraction and review permitting especially in water scarce areas; here Italy has made some progress with regard to the RRP. The third priority was to designate the NVZs that were lacking, where Italy has made limited progress. The last priority was to emphasise climate change considerations in the FRMPs; here too the Commission is currently making an assessment. 2022 priority actions ·New physical modifications of water bodies should be assessed in line with Article 4(7) of the Water Framework Directive. In these assessments alternative options and adequate mitigation measures have to be considered. ·Continue current efforts to further reduce nitrates pollution from agriculture in groundwater. The Commission recommends that Italy reviews the designation of NVZs and include groundwater stations polluted or at risk and areas that drain into waters that are eutrophic when agriculture pressure is significant.

·Complete implementation of the Urban Waste Water Treatment Directive for all agglomerations, by building up the necessary infrastructure. Chemicals The EU seeks to ensure that chemicals are produced and used in a way that minimises any significant adverse effects on human health and the environment. In October 2020, the Commission published its chemicals strategy for sustainability - 'Towards a Toxic-Free Environment' which led to some systemic changes in EU chemicals legislation. The strategy is part of the EU's zero-pollution ambition – a key commitment of the European Green Deal. The EU’s chemicals legislation provides baseline protection for human health and the environment. It also ensures stability and predictability for businesses operating within the internal market. Since 2017, the Commission has gathered information on the enforcement of Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (‘the REACH Regulation’) and the Regulation on Classification, Labelling and Packaging (‘CLP Regulation’). In December 2020, the Commission assessed the Member States reports on the implementation and enforcement of these Regulations, in line with Article 117(1) of the REACH Regulation and Article 46(2) of the CLP Regulation. According to the latest available data, national enforcement structures have not changed much. However, it is apparent from this report that there are still many disparities in implementing the REACH and CLP Regulations, notably on law enforcement. Recorded compliance levels seem to be quite stable over time, but with a slight worsening trend, which is likely to be due to enforcement authorities being more effective in detecting non-compliant products/companies and more non-compliant products being put on the EU market. In August 2021, the Commission published a measurable assessment of the enforcement of the two main EU regulations on chemicals using a set of indicators tracking different aspects of enforcement. Responsibility for checking compliance with both REACH and CLP in Italy rests with the Ministry of Health-DG Health Prevention and with the regions and autonomous provinces. Italy has devised and fully implemented both REACH and CLP enforcement strategies. As a rule, all infringements of REACH are classed as ‘serious’ or ‘very serious’ environmental administrative offences. If the infringement is sufficiently serious, the competent authority may decide to impose further penalties in addition to a fine. That authority may also, where necessary, order the provisional seizure of assets and documents. In Italy, there were 200 inspectors distributed in 21 regions (also responsible for other regulations) in 2019. There is an annual enforcement plan and priorities are based on local needs and competent authority requests, including critical products identified in the EU RAPEX system. Italy has one of the lowest shares of non-compliance cases in the EU as shown in the Figure 33. Figure 33: Percentage % of non-compliance cases out of the total number of REACH and CLP controls during 2019 per Member State and compared to the EU average Italy has not yet ratified the Stockholm Convention on Persistent Organic Pollutants (POPs). Italy had a general priority action in 2019 on signing and ratifying outstanding international agreements. 2022 priority actions ·upgrade the implementation and enforcement administrative capacities towards a zero tolerance to non-compliances; ·ratify the Stockholm Convention on POPs.

4. Climate action In line with the Paris Agreement and as part of the European Green Deal, the European Climate Law sets the EU target of reaching climate neutrality by 2050 and reducing greenhouse gas (GHG) emissions by 55% by 2030 compared to 1990. The law also limits the contribution that carbon removals can make towards emission reductions in 2030 to ensure a sufficient mitigation effort. The EU and its Member States submitted updated Nationally Determined Contribution (NDC) to the UNFCCC in December 2020. The EU is working across all sectors and policies to cut GHG emissions and make the transition to a climate-neutral and sustainable economy, as well as addressing the unavoidable consequences of climate change. EU climate legislation incentivises emissions reductions from power generation, industry, transport, the maritime sector and fluorinated gases (F-gases) used in products. For road transport, EU legislation requires the GHG intensity of vehicle fuels to be cut by 6% by 2020 compared to 2010 and sets binding GHG emission standards for different vehicle categories . Under the F-gas Regulation, the EU’s F-gas emissions will be cut by two thirds by 2030 compared with 2014 levels. From 2021, emissions and removals of GHGs from LULUCF have been included in the EU emission-reduction efforts. The EU adaptation policy is an integral part of the European Green Deal. From 2021, Member States are required to report on their national adaptation policies , as the EU Climate Law recognises adaptation as a key component of the long-term global response to climate change. Member States will be required to adopt national strategies, and the EU will regularly assess progress as part of its overall governance on climate action. The updated EU adaptation strategy, published in February 2021, sets out how the EU can adapt to the unavoidable impacts of climate change and become climate resilient by 2050. Key national climate policies and strategies Italy has an integrated national energy and climate plan (NECP) for the period 2021-2030, which includes investments and reforms in line with its current target under the Effort Sharing Regulation. The work is also consistent with the report Italy’s Long-term Strategy on Reducing Greenhouse Gas Emissions. According to this document, Italy is on track to reach climate neutrality in line with the EU’s target for 2050. In its RRP, Italy allocates 37.5 % of the plan to climate objectives and outlines crucial reforms and investments to further the transition to a more sustainable, low-carbon and climate-resilient economy. Investments are planned in clean energy production and energy efficiency, sustainable mobility and waste management (more details in section 5). Italy has adopted it national adaptation strategy in 2015. To implement the strategy, it is drafting a national adaptation plan (NAP) with the aim of issuing a more operational and concrete document to support national, regional, and local institutions in drawing up their own sectoral and local adaptation paths. Italy’s greenhouse gas emissions have decreased since 1990 levels, although by less than the EU average. Both emissions per GDP and emissions per capita are slightly below the EU average. Figure 34: Total greenhouse gas emissions (incl. international aviation) in Italy, 1990-2020 Effort sharing target

For emissions not covered by the EU’s emission trading scheme (ETS), Member States have binding national targets under the Effort Sharing legislation. Italy’s target under the EU legislation is to reduce emissions not covered by the EU emissions trading system (such as buildings, road transport, agriculture, small industry and waste) by 13% by 2020 and 33% by 2030 (see Figure 35). The country’s non-ETS emissions in 2019 were lower than its 2020 target. Italy has reached its EU-level and domestic greenhouse gas reduction targets. Under its NECP, Italy intends to achieve slightly more reductions than its current non-ETS target for 2030 of a 33% reduction. Figure 35: Emissions and targets under the Effort Sharing Decision/ Effort Sharing Regulation in Italy, 2020 and 2030 as percentage change from 2005 Figure 36: Emissions, annual emission allocations (AEAs) and accumulated surplus/ deficit of AEAs under the Effort Sharing Decision in Italy, 2013-2020 Key sectoral developments In road transport, the GHG intensity of vehicle fuels in Italy decreased by 3.7% from 2010 to 2019. The country must act swiftly to meet the current EU-wide reduction target of 6% by 2020. There are several types of action that Member States can take in this regard, for example, by further expanding the use of electricity in road transport, supporting the use of biofuels, in particular advanced biofuels, incentivizing the development and deployment of renewable fuels of non-biological origin and reducing upstream emissions before refining processes. In 2019, road transport emissions accounted for 22% of total greenhouse gas emissions of Italy. Emissions in transport decreased by 18% compared to 2005. Figure 37: Greenhouse gas emissions by sector in Italy – historical emissions 1990-2020, projections 2021-2030 Buildings are one of the biggest emitting sources in Italy. Most of the 14.5 million buildings were built before criteria on energy savings and the corresponding legislation were adopted. More energy- efficient buildings will yield substantial energy savings and contribute to the post-COVID recovery of the economy. See Figure 37. In the land use, land use change and forestry (LULUCF) sector, Italy projects a decrease in net removals by 2030. Reported quantities under the Kyoto Protocol for the LULUCF sector in Italy show average net removals of -38.5 Mt CO2-eq for the period 2013-2019. In this regard, Italy contributes with 11.2% to the annual average sink of -344.9 Mt CO2-eq of the EU-27. Accounting for the same period depicts net credits of, on average, -15.7 Mt CO2-eq, which corresponds to 13.6% of the EU-27 accounted sink of -115.0 Mt CO2-eq. See Figure 38. Figure 38: Reported and accounted emissions and removals from LULUCF in Italy

Use of revenues from the auctioning of EU ETS allowances Total revenue from auctioning emission allowances under the EU ETS between 2012-2021 were nearly EUR 8.9 billion. Over 50% of the auctioning revenues was spent on climate and energy purposes. In Italy, the law guarantees that 50% of the revenues is used for climate and energy but only after the year has ended, which can cause underreported spending. The remaining is allocated to the general budget, which funds climate and energy projects, as well as other initiatives. 2022 priority actions ·enhance sustainable transport, especially urban, local and regional sustainable transport, such as the metro system, trams, cycling and regional railways, and electrification of transport; ·Increase the uptake of renewable energy; ·improve energy efficiency in buildings. Further efforts are needed to simplify renovation projects; ·decarbonise industry; ·improve rail connections to ports as ports can play a key role in making Italy a sustainable logistics hub linked by long-distance rail connections and using digital cargo clearance. Part II: Enabling framework: implementation tools 5. Financing Environmental investment needs in the European Union Financing environmental measures is essential for their success. Although most financing comes from national sources, various EU funds contribute significantly, helping to close the financing gaps. Post-2020, environmental implementation will also be supported by the EU’s COVID-19 Recovery Fund (via the RRF) and the ‘do no significant harm’ principle which runs across the EU budget. The renewed commitments made at COP26 (Glasgow, October-November 2021) and the Biodiversity Convention (April-May 2022) will also be reflected in the EU budget. Overall environmental investment gaps (EU27) The EU’s investment needs for the green transition cover a range of interlinked areas. The additional investment needs to the baselines (i.e. the gap between what is needed and what is forecast to be invested if no additional action is taken) for climate, energy and transport were estimated at EUR 390 billion a year (EU27), with a further EUR 130 billion to meet the EU's core environmental objectives . The costs of climate change adaptation can also be significant, and are estimated to reach a total of EUR 35-62 billion (narrower scope) or EUR 158-518 billion (wider scope) per year . Those investment needs to reflect the implementation objectives to 2020 and to 2030 (except for climate adaptation, the costs of which are expected to last over a longer time horizon). A preliminary update of the EU’s core environmental investment gap is provided in Table 1. Almost 40% of the environmental investment needs relate to dealing with pollution, which account for nearly two-thirds of the investment gap if combined with water management. The investment gap in circular economy and waste is estimated to be between EUR 13-28 billion a year, depending on the levels of circularity implemented. The annual biodiversity financing gap is estimated at around EUR 20 billion. Table 1 - Estimated breakdown of the EU’s environmental investment needs, by environmental objective Environmental objective Estimated investment gap (EU-27, per year) EUR billion % Pollution prevention & control 42.8 39% Water management & industries 26.6 24% Circular economy & waste 13.0 12% Biodiversity & ecosystems 21.5 20% R & D & I and other 6.2 6% Total 110.1 100%

EU funding will also help bridge the investment gaps when accounting for the new commitments made under the United Nations Framework Convention on Climate Change at the COP 26 (Glasgow, 31 October to 12 November 2021), or the Biodiversity Convention COP15 (April-May 2022), under nature-based solutions and investments. Environmental investment needs in Italy There is a clear shift of investment priorities in Italy to supporting climate policies, as can be seen in the RRP. The focus is on sustainable energy and transport to reduce greenhouse gases. There is also much unfinished business in Italy with investments needed in water and waste infrastructure, biodiversity and nature. Climate investment priorities address the needs or ‘investment gaps’ in a wide set of economic sectors such as energy renovation of housing, e-mobility and transportation infrastructure. The following environmental investment needs have been identified by sector: Pollution prevention & control The EU’s first Clean Air Outlook under the clean air programme estimated that the total air pollution control costs for Italy to reach the NECD emission reduction requirements (ERRs) by 2030 amount to EUR 7 382 million per year, including EUR 5 588 million for capital investment (assuming the achievement the 2030 climate and energy targets are met). The EU’s second Clean Air Outlook suggested that, the EU would largely achieve the reductions of air pollutant emissions that correspond to the obligations under the NEC Directive for 2030 if: (i) all relevant legislation adopted up to 2018 (including all air pollution and the 2030 climate and energy targets set in 2018) delivered its full benefits and (ii) if Member States also implemented the measures announced in their NAPCPs. The only exception is for ammonia (NH3) for 15 Member States. Water management According to the OECD study ‘Financing a Water Secure Future’ (2022), despite near universal public water supply connection rates, water availability in Italy remains an issue in some regions. Similarly, compliance with wastewater treatment standards (which is below the EU average) belies significant regional disparities in service coverage and levels. There are four infringements open for wastewater, and fines are being paid for one of them. Italy faces significant future flood risks, especially in northern river basins. Italy suffers medium-to-high water stress, leading to intense use of water. Northern regions, in general, receive more rain than southern regions and furthermore, 70% of Italy’s groundwater is located under northern regions. Many southern regions rely on water imported from farther north. EU funding has provided a significant share of public funding over the past decade. It is also estimated that Italy will need to invest an additional cumulative EUR 12 487 million by 2030 over baseline levels for drinking water and sanitation – corresponding to around EUR 1 250 million investment need (capital expenditure) per year, with around 90% relating to wastewater . Moreover, the recent 6th Water Framework Directive and Floods Directive Implementation Report and the financial - economic study accompanying it, are also a relevant source of information in this domain. The Italian authorities also identified high investment needs for the coming period to reach compliance with the UWWTD with EUR 184 billion. This covers works on wastewater treatment plants, with an estimated investment cost of EUR 151 billion and works on collecting systems and/or IAS (Individual and other Appropriate Systems) with a estimated investment cost of EUR 33 billion. Waste & circular economy According to a Commission study to meet the recycling targets for municipal waste and packaging waste, Italy still needs to invest an additional EUR 2 304 million (around 330 million per year) between 2021-2027 (beyond the baseline investment) in collection, recycling reprocesses, bio-waste treatment, waste sorting facilities and digitilising waste registries . This includes costs for bio-waste treatment facility replacement of EUR 348 million for 2021-2027. However, these does not cover the investment needed for other key waste streams (plastics, textiles, furniture) or to unlock a higher uptake of circularity and waste prevention across the economy. Biodiversity & ecosystems The priority action frameworks (PAF) for Italy shows that nature protection costs (including Natura 2000) in 2021-2027 are EUR 3 481 million - or EUR 497.3 million per year (with 225.7 million annual running costs and 271.7 annual one-off costs). This excludes additional costs to implement the 2030 biodiversity strategy, including on increased protection and restoration. EU environmental funding 2014-2020 The multiannual financial framework (MFF) for 2014-2020 allocated almost EUR 960 billion (in commitments, 2011 prices) for the EU. The commitment to green transition included a 20% climate spending target and funding opportunities for the environment under the European Structural and Investment (ESI) Funds . The 2014-2020 budget was subsequently topped up with over EUR 50 billion (current prices) from the REACT-EU programme for cohesion policy action against COVID-19 . Italy received EUR 59.7 billion from the ESI Funds in 2014-2020 to invest in job creation and a sustainable and healthy European economy and environment. The planned direct environmental investment amounted to EUR 4.3 billion with a further EUR 1.8 billion in indirect environmental investment, bringing the total to EUR 6.1 billion. Figure 39 gives an overview of (planned) individual ESI Funds earmarked for Italy (EU amounts, without national amounts). The REACT-EU investments include improving sustainable transport and improving water supply (reducing leakages by districts, distrettualizzazione) as well as supporting sustainable productive processes and circular economy. Figure 39: 2014-2020 ESI Funds allocated to Italy, including environmental investments

Table 2: 2014-2020 environmental investments under the ESI Funds in Italy Instrument Allocations for the environment (EUR million) Under Cohesion policy (ERDF) Direct environmental investments water waste air quality biodiversity and nature land rehabilitation climate and risk management Indirect environmental investments renewable energy energy efficiency other energy sustainable transport sustainable tourism business development, R&I 4 424.6 2 615.8 991.5 223.1 7.6 154.9 164.0 1 074.7 1 808.9 27.6 488.6 66.9 1 118.4 49.8 57.6 Under EAFRD/rural development Direct environmental investments water climate and risk management Indirect environmental investments renewable energy energy efficiency 1 497.9 1 475.2 269.2 1 206.0 22.7 21.0 1.7 Under EMFF Direct environmental investments environment protection & resource efficiency Direct environmental investments business development, R&I 198.5 196.1 196.1 2.5 2.5 Under ESI Funds total Direct environmental investments Indirect environmental investments 6 121.0 4 287.0 1 834.0 In Sicily, there has been a reallocation of funds away from hydrogeological risks and coastal erosion, dams for water supply and to clean-up polluted sites; funds earmarked for actions to end infringements have not been reduced (for urban wastewater or irregular landfills), and it should be noted that the changes mainly affect energy efficiency. The underperformance of Thematic Objective 4 (low carbon) in 2014-2020 and the reduction of its budget consequently is worrying, in light of the upcoming greater focus on Priority Objective (PO) 2 (low carbon) due to the thematic concentration for 2021-2027. Furthermore, in Sicily, as noted in the 2019 EIR, the ex-ante conditionality for waste for the 2014-2020 period has still not been met, which has blocked reimbursement. Calabria also has difficulties absorbing the funding, especially ERDF for urban wastewater treatment. Sardinia has drawn up for the period 2014-2020 a specific model of environmental sustainability for the ERDF and EAFRD under the SEA procedure. The SRSP (former TSI) supported in 2019 a project to re-prioritise and improve the absorption of structural funds at local level. In Italy, the environmental authority ensures that environmental considerations are integrated into operational programmes in term of sustainability; furthermore, there is a network of environmental and managing authorities . Funding for the environment from ESI Funds has also been also supplemented by other EU funding programmes available to all Member States, such as, the LIFE programme, the Horizon 2020 or loans from the European Investment Bank (EIB), that add up to an estimated total of EUR 10.8 billion of EU environmental financing for Italy for the period 2014-2020 The LIFE programme is entirely dedicated to environmental and climate objectives. It finances demonstration and best practice actions for green solutions to be deployed. In 2014-2020, Italy received EU support for 155 LIFE projects (for nature and environment) for an amount of EUR 268.9 million from the LIFE programme (out of 1 028 EU-27 LIFE projects with a total EU contribution of EUR 1.74 billion) . In 2014-2020, Horizon 2020 allocated about EUR 205.7 million to Italy (in particular, for circular economy, climate action, natural resources and ecosystems), which is about 3.7% of Italy’s total allocation . From the European Fund for Strategic Investments (EFSI), Italy received EUR 1.0 billion in direct environmental investment and a further EUR 48.4 million as indirect environmental investment. This brings Italy’s total amount for the environment to some EUR 1.1 billion out of its total allocation of EUR 7.5 billion . Italy received EUR 3.8 billion for direct environmental investments, specifically, for water and sewerage and some for waste, out of all EIB loans to Italy (EUR 70.5 billion) . The country ranks first in the EU in terms of the amount of total EIB lending. In 2020, the EIB provided EUR 24.2 billion in funding to fight climate change at EU level, 37% of its total financing. It also provided EUR 1.8 billion (3% of its financing) for broader environmental lending. EU environmental funding 2021-2027 The 2020 European Green Deal Investment Plan (EGDIP) calls for EUR 1 trillion in green investments (public and private) by 2030. The MFF for 2021-2027 and the NextGenerationEU spending programme will mobilise EUR 2.018 trillion (in current prices) to support the COVID-19 recovery and the EU's long-term priorities, including environmental protection . Following the EU Green Deal’s pledge to ‘do no harm’ and the Interinstitutional Agreement on the 2021-2027 MFF , 30% of the EU budget will support climate efforts, while biodiversity will receive 7.5% of the EU budget (as of 2024) and 10% (as of 2026). To reach these targets, more financial resources will need to be allocated to biodiversity, specifically under the 2021-2027 cohesion policy and the 2023-2027 common agricultural policy. Sustainable finance significantly increases transparency on environmental sustainability (a goal promoted by the EU Taxonomy) . It also strengthens non-financial reporting requirements and facilitates the issuance of green bond (by the EU green bond standard ). Reinforced by the renewed sustainable finance strategy (2020) , it will increase investment flows to climate and the environment. The new strategy on adaptation to climate change can help close the insurance protection gap, which currently leaves many risks from climate-related events uninsured . The EIB will align 50% of its lending for climate and environment projects by 2025 with an EUR 250 billion contribution to the EGDIP by 2027. Table 3 gives an overview of the EU funds earmarked specifically to Italy for the 2021-2027 period. These funds are supplemented by other EU funding programmes available to all Member States. Table 3: Key 2021-2027 EU funds allocated to Italy (current prices) Instrument Country funding allocation (million EUR) Cohesion policy ERDF ESF+ ETC (ERDF) Total: 43 114.5 26 614.9 14 535 934.9 Just