EUROPEAN COMMISSION Brussels, 4.4.2019 SWD(2019) 123 final COMMISSION STAFF WORKING DOCUMENT The EU Environmental Implementation Review 2019





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 2019:

A Europe that protects its citizens and enhances their quality of life



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This report has been written by the staff of the Directorate-General for Environment, European Commission. Comments are welcome, please send them to ENV-EIR@ec.europa.eu More information on the European Union is available at http://europa.eu . Photographs: p. 13 — ©GettyImages/DieterMeyrl, p. 15 — ©iStock/ueuaphoto, p. 18 — ©iStock/Aleh Varanishcha, p. 20 — ©iStock/fbxx, p. 29 — ©iStock/PARNTAWAN For reproduction or use of these photos, permission must be sought directly from the copyright holder. ©European Union, 2019 Reproduction is authorised provided the source is acknowledged.



Table of Contents Executive summary

Part I: Thematic areas 1.Turning the EU into a circular, resource-efficient, green and competitive low-carbon economy Measures towards the circular economy Waste management Climate change 2.Protecting, conserving and enhancing natural capital Nature and biodiversity Maintaining and restoring ecosystems and their services Estimating natural capital Invasive alien species Soil protection Marine protection 3.Ensuring citizens’ health and quality of life Air quality Industrial emissions Noise Water quality and management Chemicals Making cities more sustainable Part II: Enabling framework: Implementation tools

4.Green taxation, green public procurement, environmental funding and investments Green taxation and environmentally harmful subsidies Green public procurement Environmental funding and investments 5.Strengthening environmental governance Information, public participation and access to justice Compliance assurance Effectiveness of environmental administrations International agreements Sustainable development and the implementation of the UN SDGs Executive summary Italy and the Environmental Implementation Review (EIR) In the 2017 EIR Report, the main challenges identified with regard to implementation in Italy were: ·improve waste management, in particular by reducing landfilling and increasing separate collection of waste in the southern regions; ·improve urban waste-water treatment through appropriate investment; ·reduce particulate matter and nitrogen dioxide emissions by reducing traffic congestion and biomass burning; ·designate the remaining Natura 2000 sites as special areas of conservation and ensure that the Natura 2000 network is managed so that it achieves favourable conservation status for all species and habitats. Italy organised four thematic EIR seminars in 2017-2018 on general issues, waste, air and water. There has also been a dialogue held between the Commission and Italy about the EU's action plan on nature. The Commission launched in 2017 the TAIEX-EIR Peer-to-Peer (EIR P2P), as a new practical tool facilitating peer-to-peer learning between environmental authorities. Italy has profited of EU support with the EIR peer to peer programme activities on air pollution and forests. The regionalised structure of Italy means responsibilities are shared between the national and regional levels. This means that effective coordination is needed within a system of multi-level governance. The government’s environmental programme must be achieved. Progress in meeting the challenges since 2017 report

There has been some progress on waste management, with a steady and consistent increase in recycling and composting over the past 7 years. However, more effort will be necessary to comply with EU recycling targets after 2020. The Italian government continues to clean up its irregular landfill sites. Some of these sites have prompted the Court of Justice of the European Union (CJEU) to levy financial penalties against Italy since 2014. Italy also continues to be subject to fines for failing to create an appropriate waste-management network in Campania although progress has been made by the region. Progress has been made in the development of a circular economy national strategy and an action plan on sustainable consumption and production in the light of the 2017 sustainable development strategy. On water management, despite planning and the appointment of a special commissioner, there has been only limited progress in reducing the number of non-compliant agglomerations under the Urban Waste Water Treatment Directive. This has led to the imposition of fines by the CJEU. Investments must continue in land-use planning (to reduce soil sealing) and in flood control. On air quality there has been limited progress in reducing emissions as a whole, and agreements between the national government and regional governments have been concluded. These agreements have included planning measures (such as limited traffic zones), fiscal incentives and technical improvements to cars. However, for both particulate matter and NO2 there were exceedances reported for 2016 and 2017. The main reason for exceedances is Italy’s high level of road traffic, with over 80 % of trips made by private car, as well as inefficient domestic combustion. Progress must also be made in reducing subsidies to company cars, achieving parity between petrol and diesel fuel prices, and investing in more sustainable modes of transport. On the Natura 2000 network there are still some special areas of conservation waiting to be designated. The conservation status of habitats and species of EU interest must also be improved by fully implementing the Natura 2000 instruments, using the regional prioritised action frameworks to better integrate EU funds, and planning investments more strategically. The 2019 EIR shows that Italy could make more efficient use of EU funds and loan opportunities, by avoiding reallocation from the environment to other sectors and by increasing fund absorption with targeted capacity-building activities. Examples of good practice ·Italy has created specialised environmental police forces to deal with crime. ·The Ministry of Environment has been effective in promoting LIFE projects. Three of the most noteworthy LIFE projects are GESTIRE 2020 (to protect nature in Lombardy); PREPAIR (to improve air quality in the Po valley basin); and the Alien Species Awareness Programme (ASAP). ·Spatial maps used for air quality modelling and downloadable data for analysis in Milan. ·Green roofs which have the potential to reduce flooding by half. ·Regional level good practices to promote better water and waste management. ·On circular economy, stakeholders platforms, best practice exchanges, public/private alliances as well as awareness raising initiatives have proliferated in the last two years. Part I: Thematic areas 1.Turning the EU into a circular, resource-efficient, green and competitive low-carbon economy Measures towards the circular economy The Circular Economy Action Plan emphasises the need to move towards a life-cycle-driven ‘circular’ economy, reusing resources as much as possible and bringing residual waste close to zero. This can be facilitated by developing and providing access to innovative financial instruments and funding for eco-innovation. Following the adoption of the Circular Economy Action Plan in 2015 and the setting up of a related stakeholder platform in 2017, the European Commission adopted a new package of deliverables in January 2018. This included additional initiatives such as: (i) an EU strategy for plastics; (ii) a Communication on how to address the interplay between chemical, product and waste legislation; (iii) a report on critical raw materials; and (iv) a framework to monitor progress towards a circular economy. The EU has identified four parts to the circular economy. It has also created 10 indicators – and a variety of sub-indicators – to monitor these parts. According to the EU’s monitoring framework for a circular economy, Italy was one of the top performers in the EU for one of these sub-indicators in 2016, when its circular-material use-rate was 17.1 %. Italy also had a higher percentage of persons employed in circular economy sectors than the EU average in 2016 (2.05 in Italy, 1.73 in the EU).

In November 2017, the Ministry of Environment and the Ministry of Economic Development published a joint document ‘Towards a model of circular economy in Italy’. This strategic document is functional to the implementation of the national strategy for sustainable development, which was adopted by the Italian government on 2 October 2017. Together, these two documents represent a valuable contribution towards promoting the circular economy in Italy, providing a general framework. Following the publication of the framework document, a public consultation took place. The consultation identified the need to revise regulations, create new economic instruments, raise awareness, and boost research and development on the circular economy. On 30 July 2018 a public consultation has been launched on monitoring framework for resource efficiency and circular economy prepared by the Ministry of Environment, the Ministry of Economic Development and the National Agency for New Technologies, Energy and Sustainable Development (ENEA). The consultation ended on 31 October, the results are now being processed. . The circular economy is also a key component of ‘Industria 4.0’, the name given to the government’s economic development plan. Circular economy appears as a clear priority in the update note for the 2018 budget. The European Social Fund and the European Regional Development Fund (ERDF) are also supporting the improvement of the regions' capacity to plan and manage the transition of the local territorial systems towards the circular economy, respectively through the use of integrated policy tools as well as with opportunities to invest in the circular economy. At the University of Tuscia in Civitavecchia (Roma) the first-degree course in Circular Economy has started. Another significant development in Italy’s promotion of the circular economy is the entry into force in June 2018 of ‘Made Green in Italy’, a voluntary system for assessing the environmental footprint of products. Other important initiatives, such as the environmental footprint programme, were mentioned in the 2017 EIR. Awareness of the circular economy concept and of the opportunities it can bring is growing in Italy. Some examples of this growing awareness are described in the report ‘100 Italian circular economy stories’, which lists best practices from large companies, small and medium sized enterprises (SMEs), local authorities and civil society. Important events are taking place nationally, including in the south. The EU is providing other support, such as the ERDF supported FORCE project, which encourages cities to cooperate to promote the circular economy. This project involves the city of Genoa taking a lead on the issue of wood waste. The 2018 ‘Restarter’ project encourages the creation of a circular economy for second-hand clothes. In addition, the National Council of the Green Economy has encouraged the creation of the States General of the Green Economy, a grouping of 66 business organisations that represent the green economy in Italy. In November 2017, eight large Italian companies (Enel, Intesa Sanpaolo, Novamont, Costa Crociere, Salvatore Ferragamo group, Bulgari, Fater e Eataly) have launched an Alliance for Circular Economy and signed a ‘poster’ to identify and disseminate national best practices on circularity. Such an Alliance aims at reinforcing the commitment to continuous improvement of Italian companies in terms of innovation, competitiveness and environmental performance along the entire value chain. In November 2018, Confindustria presented the document ‘The role of Italian industry in the circular economy’ which highlights the crucial role that the industry can plays to facilitate the transition towards the circular economy. The States General of the Green Economy also works in collaboration with the Ministries of Environment and Economic Development. They meet yearly and presented the 2018 report on green economy in the last meeting in November 2018. Italy’s Sustainable Development Foundation also produces regular reports on the green economy, and on 4 May 2018, it launched the Circular Economy Network with the support of 13 companies and consortia. Furthermore, ENEA has launched in 2018 the Italian Circular Economy Stakeholder Platform that, like the European one, is a network of networks with the objective of creating a point of national convergence of initiatives, experiences, criticalities, perspectives of the Italian system on circular economy. On 21 April 2017 a cooperation agreement was signed for the constitution of an "Industrial Symbiosis National Network (SUN)" between ENEA and the Ministry of Environment, the Ministry for Economic Development, Confindustria, several Italian universities and various associations operating in the field of the environment. In the special Eurobarometer survey of October 2017 on attitudes of EU citizens towards the environment, 93 % of Italians said they were highly concerned about the effects of plastic products on the environment (the EU-28 average is 87 %), and 93 % of Italians said were concerned about the impact of chemicals (the EU-28 average is 90 %). Moreover, 79 % of Italians supported greater EU investment in environmental protection (this was less than the EU-28 average of 85 %). Italians appear to support circular economy initiatives and environmental protection measures. Private investment, jobs and gross value added in circular economy sectors of the economy have increased in Italy from EUR 17 438 million in 2008 to EUR 17 756.6 million in 2015. In terms of resource productivity (how efficiently the economy uses material resources to produce wealth), Italy performs better than the EU average. In 2017, it produced an average of EUR 3.10 per kg of material resources (the EU average is EUR 2.04). Figure 1 shows that Italy has seen a small but steady increase in resource productivity since 2010; there has been some decoupling with economic growth over the same period. It also had the fourth-highest resource productivity in the EU in 2017. Figure 1: Resource productivity 2010 - 2017 Overall, around 345 000 Italian companies invested in the green economy between 2011 and 2017, and around 24.9 % of all Italian businesses and 30.7% of manufacturing can be considered ‘green’ in 2017. The rate of innovation of these green businesses was twice that of other businesses in 2017. Recent research on more than 600 waste-water treatment plants in Italy, covering approximately 25 % of the country’s total load of treated sewage, reveals that just 40 % of plants engage in some form of material or energy recovery. The research identified three primary driving forces that promote resource-recovery: technical reliability, economic feasibility, and socio-legislative acceptance. As of September 2018, Italy had 9929 products and 325 licences registered under the EU’s ecolabel scheme out of 71 707 and 21607 licences in the EU, the second-highest figure after Spain. Moreover, 983 organisations from Italy are currently registered in EMAS, the European Commission’s eco-management audit scheme. SMEs and resource efficiency SMEs are the backbone of the Italian economy. But Italy performs badly on some indicators for the environmental performance of its SMEs (see Figure 2), for which it received a Suggested Action in the 2017 EIR. On a positive note, the share of Italian SMEs that generate most of their turnover from green products or services is higher than the EU average. The percentage of SMEs taking resource-efficiency measures in Italy has increased between 2015 and 2017. Since 2008, policy progress in promoting the environmental performance of SMEs has been moderate. Italy has formulated its main policies and strategies within the framework of EU and international commitments. Regulation and legislation took the form of support measures and financial incentives, such as green and white certificates, feed-in premiums for photovoltaic electricity, reduction of electricity costs for small companies, and tax deductions for upgrading the environmental performance of buildings. Only 16% of SMEs offer green product or services, less than the EU average (25%). Smaller firms have fewer resources and less capital. They therefore face more challenges in meeting the high cost of research, and in accessing European and national funding.

Figure 2: Environmental performance of SMEs Several of these incentives were repeatedly changed, which has created some uncertainty in the markets. SMEs were not a specific target of these incentives, but they are among the beneficiaries. The latest Eurobarometer survey ‘SMEs, resource efficiency and green markets’ shows improvements have been made on some of the main indicators. Public support for Italian SMEs seems to be acknowledged by the survey respondents, as 64 % of ‘green’ SMEs are satisfied with the assistance they receive from the government (compared to an average of 58 % in the EU-28). 17 % of Italian SMEs make more than 75 % of their turnover from green products or services. This is better than the EU-28 average: only 14 % of EU-28 SMEs make more than 75 % of their turnover from green products or services. While the average number of employees working in green jobs in the EU is 4, in Italy it is 2.6. For the year 2018 it is expected that 63.5% of the new contracts for design and research are green, demonstrating the ever closer link between the green economy and business innovation. Nonetheless, the Eurobarometer shows there is still room for improvement. For example, only 44 % of Italian SMEs have invested up to 5 % of their annual turnover in becoming more resource efficient (compared to an EU average of 50 % of SMEs). And only 20 % of Italian SMEs say they offer green products of services (or are planning to do so in less than two years) compared to an EU average of 33 % of SMEs. Over the 2014-2020 programming period, the ERDF will invest in research and innovation and SME competitiveness. Its investment criteria are based on national and regional ‘smart specialisation’ strategies. For Italy, the national strategy identifies five focus areas, including energy, the environment and sustainable industry. For example, the Piedmont ERDF operational programme 2014-2020 is contributing to a loan fund to support innovative projects for environmental sustainability. Nationally, the government’s ‘Start Up’ and ‘Innovative SMEs’ initiatives have been supported by the annual budget 2017 and Industria 4.0 . Development contracts are being put into place to help businesses invest more productively in the environmental field. This EU and national support is helping SMEs to become more resource efficient. Eco-innovation Italy ranked 19th on the European Innovation Scoreboard 2018, with a 2-point improvement since 2010. The country has a better position in the Eco-innovation Scoreboard 2017, when Italy moved up in the EU-28 ranking from 10th to 7th place (Figure 3). As mentioned in the 2017 EIR, there are two barriers to eco-innovation and the circular economy in Italy. The first barrier is structural, and includes problems in the economy and technology. The second barrier is caused by policy and regulation. For an advanced economy, Italy has very few natural resources. Italy has a strong manufacturing sector, but the cost of imported raw materials and their impact on the final cost of products is high. For this reason, eco-innovative initiatives might be a way to increase the productivity of resource use and promote eco-innovation in processes, products and consumption. Figure 3: 2017 Eco-innovation index (EU=100) SMEs have fewer resources and less capital. They therefore face more challenges in meeting the high cost of research, and in accessing European and national funding. However, according to the 2017 ‘Green Italy’ report, 354 580 Italian companies invested in green products and technologies in the period 2011-2016 (or expect to do so by the end of 2017). This is 27.1 % of all Italian companies in the country, and 33.8 % of companies in manufacturing. In 2018, about 207 thousand companies have invested, or intended to do so by December, on sustainability and efficiency. 79% of manufacturing companies have developed innovation activities. Among the companies investing in the green, 26% have already taken measures related to 'Industria 4.0'. Figure 4: Italy’s eco-innovation performance 2019 priority action ·Increase the available risk capital for eco-innovation in SMEs.

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; and

(iii) limiting energy recovery to non-recyclable materials and phasing out landfilling of recyclable or recoverable waste. This section focuses on management of municipal waste for which EU law sets mandatory recycling targets . Municipal waste generation has slightly decreased in 2017 in Italy. At 489 kg per year per inhabitant, it is now above the EU average estimate of 487 kg per year per inhabitant. Figure 5 depicts municipal waste by treatment type in Italy in kg per capita. It shows there has been a steady increase in recycling and composting, and a decrease in landfilling. A significant obstacle to eco-innovation in the country remains the low rate of R&D and investment. The availability of risk capital for both the creation and continuation of eco-innovative projects remains scarce. This problem is due to the low level of public support for SMEs that wish to take part in the green economy. Figure 6 shows that 48 % of municipal waste was recycled in 2017 (including composting and material recycling), although there are large differences between regions. This is equivalent to the EU average of 46 % and slightly below the EU target to recycle 50 % of material waste by 2020. Italy is not considered at risk of missing the 2020 targets for reuse/recycling of waste. There has been a steady increase in recycling and composting rates over the past 7 years. However, more effort will be necessary for Italy to comply with the recycling targets planned for the period after 2020, although some regions will have to make more efforts than others do as described later in this section. Figure 5: Municipal waste by treatment in Italy 2010-2017 In 2017, 23 % of municipal waste was landfilled (the EU average was 24 %). Landfilling of municipal waste has been consistently decreasing since 2002 in favour of other more environmentally friendly treatment options (so higher in the ‘waste hierarchy’), including separate collection and recycling. Incineration rates are also falling. 19 % of waste was incinerated in 2017, below the EU average of around 28 %. As stated in the 2017 EIR, the Italian government continues to clean up the irregular landfill sites that have been the cause of financial penalties from the CJEU since 2014. Waste policies in Italy are implemented at regional, provincial and municipal levels under national umbrellas. Despite overall progress in separate collection and recycling, the differences in performance at the local level can be high. High recycling rates are common in the north of the country, and in some parts of the centre and south. For example, in the province of Benevento in Campania, 70.9 % of waste is separated and recycled, while in the province of Oristano in Sardinia, 71 % of waste is recycled. However, in general the centre and south of the country perform less well in waste management than the north. Campania is continuing to pay fines for poor waste management, after it was sanctioned by the CJEU for its previous waste-management policies. However, steady progress has been made in Campania to put in place a functional waste management network. A protocol was signed in November 2018 to deal with the so-called ‘land of fires’ containing an action plan. Figure 6: Recycling rate of municipal waste 2010-2017 Emilia-Romagna has a separate collection rate of 61.8 %, and Lombardy’s rate is 60.8 % (these are average rates, but the separate collection rates are much higher in some parts of these regions). Only 4.7 % of Emilia-Romagna’s municipal waste is landfilled, and 0.64 % of Lombardy’s municipal waste is landfilled. Both these regions are therefore well positioned to meet the new EU waste targets. These targets state that at least 55 % of municipal waste should be recycled by 2025, rising to 60% by 2030 and 65 % by 2035. For landfill, the new target is for only 10 % of municipal waste to be landfilled by 2035. It should be noted that landfill taxes vary between regions. Several Italian regions have already embedded a holistic circular economy approach into their regional waste planning. Public services have been made less complex by reducing the number of waste disposal areas or ATOs (Ambiti Territoriali Ottimali di Smaltimento) in some regions. The annual budget law 2018 provides a credit for businesses of 36 % for purchasing recycled plastic. Ex-ante conditionality has been applied to the ERDF 2014-20 to ensure that regions in need of waste-management infrastructure (the southern regions) have a waste management plan in conformity with EU law. Whilst most eligible regions have now fulfilled this ex-ante conditionality, this is still not the case for Sicily. In addition, the European Fund for Strategic Investments (EFSI) is being used to improve environmental infrastructure for waste. ERDF investments in 2014-2020 for waste projects are only aimed at activities at the top of the ‘waste hierarchy’. They therefore exclude funding for landfill and incineration. As mentioned in the 2017 EIR decree were passed in 2016 for incineration and for measures to create an integrated system for organic municipal waste. A new decree on re-use centres is being planned. A pilot project on deposit schemes is also being planned. Rates of separate collection and recycling of municipal waste are constantly growing across Italy, as shown in Figure 7. In the province of Treviso, one example of best practice is the integrated waste-management system, which begins with kerbside waste collection (separated recycling waste — including organic waste — and a pay-as-you-throw scheme for residual waste). These measures alone increased the recycling rate to over 85 % in 2013 and residual waste per person of 53 kg/year. As mentioned in the 2017 EIR, Italy applies extended producer responsibility (EPR) for packaging waste through CONAI, the national organisation for packaging makers. Figure 7: Regional separate collection rates On waste prevention, Italy adopted the national waste prevention programme in 2013. On the basis of this programme, each region has adopted regional prevention plans that promote greater use of green public procurement and recycling. The government has indicated that the country’s waste prevention programme might be revised to align it more closely with circular economy considerations.

2019 priority actions ·Introduce new policy and economic instruments to: (i) promote waste prevention, (ii) make product re-use and waste recycling more economically attractive and (iii) shift re-usable and recyclable waste away from landfilling. ·Harmonise regional landfill tax rates. ·Increase recycling rates by focusing on the effectiveness of the separate collection obligation. ·Improve the functioning of Extended Producer Responsibility Systems, in line with the general minimum requirements on EPR. ·Close and rehabilitate the non-compliant landfills as a matter of priority. Climate change The EU has committed to undertaking ambitious climate action internationally as well as in the EU, having ratified the Paris Climate Agreement on 5 October 2016. The EU targets are to reduce greenhouse gas (GHG) emissions by 20 % by 2020 and by at least 40 % by 2030, compared to 1990. As a long-term target, the EU aims to reduce its emissions by 80-95 % by 2050, as part of the efforts required by developed countries as a group. Adapting to the adverse effects of climate change is vital to alleviate its already visible effects and improve preparedness for and resilience to future impacts. The EU emissions trading system (EU ETS) covers all large greenhouse gas emitters in the industry, power and aviation sectors in the EU. The EU ETS applies in all Member States and has a very high compliance rate. Each year, installations cover around 99 % of their emissions with the required number of allowances. For emissions not covered by the EU ETS, Member States have binding national targets under the effort sharing legislation. Italy’s greenhouse gas emissions were below its annual emission allocations (AEAs) in each of the years 2013-2017, as shown in Figure 9. For 2020, Italy’s national target under the EU Effort Sharing Decision is to reduce emissions by 13 % compared to 2005. For 2030, Italy’s national target under the Effort Sharing Regulation will be to reduce emissions by 33 % compared to 2005. See Figure 9. The national energy strategy from November 2017 notably foresees a 28% renewables target for in final energy consumption and 30% target in energy savings by 2030 as well as the doubling of R&D investments in in clean-energy technologies to € 444 million in 2021. Those objectives are however being currently revised by the new government, also in light of the new EU energy and climate targets for 2030. The Italian National Energy and Climate Plan (NECP), to be finalized by the end of 2019, is expected to further strengthen and detail national policy measures to meet the EU’s 2030 targets for energy and climate. Italy adopted a low-carbon development strategy in 2013 as part of the previous national energy strategy. This low-carbon development strategy outlined various ways to support the progressive decarbonisation of the economy, and meet the target of reducing greenhouse gas emissions by between 80 % and 95 % from 1990 levels by 2050. A new National Long Term Strategy will, however, have to be prepared by January 2020, in the context of the finalisation of the Italian NECP. Figure 8: Change in total greenhouse gas emissions 1990-2017 (1990=100 %) Transport represents almost a quarter of the EU’s GHG emissions and is the main cause of air pollution in cities. Greenhouse gas emissions from transport in Italy increased by 1 % from 2013-2016 as shown in Figure 10. Figure 9: Targets and emissions for Italy under the Effort Sharing Decision and Effort Sharing Regulation The Regulation on fluorinated greenhouse gases (F-gas) requires Member States to run training and certification programmes, introduce rules for penalties and notify these measures to the Commission by 2017. By 10 January 2019, Italy has not notified neither such training programmes, nor rules on penalties, but has signalled that this will happen soon. The accounting of GHG emissions and removals from forests and agriculture is governed by the Kyoto Protocol. A preliminary accounting exercise shows net credits of, on average, -13.7 Mt CO2-eq, which corresponds to 11.8% of the EU-28 accounted sink of -115.7 Mt CO2-eq. The EU Strategy on adaptation to climate change, adopted in 2013, aims to make Europe more climate-resilient, by promoting action by Member States, better-informed decision making, and promoting adaptation in key vulnerable sectors. By adopting a coherent approach and providing for improved coordination, it seeks to enhance the preparedness and capacity of all governance levels to respond to the impacts of climate change.

The Italian National Adaptation Strategy to Climate Change (NAS) was adopted on June 2015 with a Directorial Decree of the Environment Ministry. A National Adaptation Plan (NAP) is currently under development through a consultative process. The NAP elaboration stared in 2016 and its finalization is tentatively planned for the first half of 2019. The NAP will provide institutional support to national and local authorities, for the integration of adaptation measures within spatial and sectorial planning. The NAP comprises: a context analysis on current and future climate variability; an evaluation of impacts and vulnerability of the main sectors identified; a risk assessment; adaptation actions at national level; tools for institutional and stakeholders participation and for monitoring and evaluation of adaptation actions. In order to provide access to climate change adaptation relevant information, data and documents and to support local decision making, a national platform is currently under preparation, using Climate-ADAPT as model. In the framework of CReIAMO PA Project "Skills and Networks for Environmental Integration and for the Improvement of Public Administration Organizations", in 2018 the Environment Ministry started the activities on “Strengthening of administrative capacity for adaptation to climate change”, with the aim to support regions and municipalities with guidelines for developing local climate change adaptation strategies or plans and for training administrators on climate changes adaptation. Figure 10: Greenhouse gas emissions by sector (Mt. CO2-eq.). Historical data 1990-2015. Projections 2016-2030 As of May 2018, more than 4 000 cities and municipalities in Italy have committed to the Covenant of Mayors, a grouping of cities that seek to promote energy efficiency and use more renewable energy. 220 of these cities have committed to adaptation planning and actions as part of the Covenant of Mayors. The city of Bologna is one of the cities that have completed a local adaptation strategy as part of this commitment. The total revenues from the auctioning of emission allowances under the EU Emission Trading Scheme (ETS) over the years 2013-2017 were EUR 2 341million. Italy has not yet used the revenues generated from the auctioning of allowances in the year 2016. However, such revenues have already been committed according to the principles enlisted in ETS Directive, article 10. Indeed, according to Legislative Decree 30/2013, article19 (3), the revenues generated from the auctions are allocated on yearly basis, through specific decrees of the Ministry for the Environment Land and Sea co-signed by Ministry of Economic Development and Ministry of Finance. These decrees can only be issued in the year n+1, after the conclusion of the auctions for the year n and the verification of coherence between auctioned allowances and revenues generated. The Ministerial decrees that redistribute 2016 revenues are currently being finalized National legislation stipulates that 50 % of the revenues should be used for climate-related purposes. Beyond climate change, energy-policy choices can have significant environmental impacts as well as bring some acceptability issues. For instance, the 2016 referendum on oil and natural gas drilling was for several months at the centre of the Italian political debate. Similarly, projects like the trans-Adriatic pipeline have generated media interest and local protests in Apulia, with residents opposing the project. 2019 priority action In this report, no priority actions have been included on climate action, as the Commission will first need to assess the draft national energy and climate plans which the Member States needed to send by end of 2018. These plans should increase the consistency between energy and climate policies and could therefore become a good example of how to link sectorspecific policies on other interlinked themes such as agriculture-nature-water and transportairhealth.



2.Protecting, conserving and enhancing natural capital Nature and biodiversity The EU biodiversity strategy aims to halt the loss of biodiversity in the EU by 2020. It requires full implementation of the Birds and Habitats Directives to achieve favourable conservation status of protected species and habitats. It also requires that the agricultural and forest sectors help to maintain and improve biodiversity. The Commission held a two-day dialogue with the Italian government on 12-13 February 2018 to discuss natural capital and biodiversity. The dialogue was part of the EU's action plan for nature, people and the economy. The dialogue was a chance to discuss all the main implementation problems related to the Habitats and Birds Directive in Italy and to agree on appropriate follow-up (road map). Biodiversity strategy The national biodiversity strategy (‘Strategia Nazionale per la Biodiversità’) was adopted in 2011. Italy now plans to update this strategy, reflecting the commitments agreed to in the nature dialogue (these include a commitment to draw up national strategic conservation objectives that would help Italy achieve favourable conservation status for its habitats and species). Setting up a coherent network of Natura 2000 sites

In Italy, 2 613 sites have been designated under the Habitats and Birds Directives. By the end of 2017, 19 % of the country’s national land area was covered by Natura 2000 (the EU average was 18.1 %). By the end of 2017, Italy’s marine Natura 2000 designations covered 6 859 km². Italy has still not designated enough of its marine area for the relevant habitat types and species covered by the nature directives. To remedy this, Italy has committed to identify and designate the necessary sites by the end of 2019.This will include special protection areas for marine birds. Designating Natura 2000 sites and setting conservation objectives and measures The Commission receives many complaints about Italy's implementation of the Nature Directives. These complaints concern the degradation of designated sites; the poor quality of appropriate assessments under Article 6(3) of the Habitats Directive, and insufficient enforcement of species protection. This poor implementation of the Nature Directives damages nature but it also affects business and legal certainty. Italian authorities, in consultation with the Commission, have drafted new national guidelines for the implementation of provisions in Article 6(3) and 6(4) of the Habitats Directive. These new guidelines are meant to improve, clarify, harmonise and streamline the implementation of the site impact assessments across all Italian regions. Moreover, the previously cited CReIAMO PA project is aimed at strengthening the administrative capacity on procedure according the article 6(3) of the Habitats Directive. Progress in maintaining or restoring favourable conservation status of species and habitats Considering that Member States report every 6 years on the progress made under both directives, no new information is available on the state of natural habitats and species, nor on progress made in terms of improving the conservation status of species and habitats in Italy, as compared to the 2017 EIR. Italy acknowledges that the lack of appropriate resources for land management and conservation measures is a major obstacle to it achieving the objectives of the Nature Directives. This obstacle could be partly removed by administrative capacity-building and more effective mainstreaming of nature-conservation measures and objectives in other sectoral policies, at regional and national level. In the 2007-2013 period, funding from the ERDF and the European Agricultural Fund for Rural Development (EAFRD) for nature-conservation measures was particularly low (see Section 4). At regional level the Prioritized Action Frameworks (PAF) play a strategic role to ensure effective integration and adequate resources planning to finance Natura 2000 conservation measures. A LIFE Integrated Project (GESTIRE 2020) is currently under way which will create an integrated management structure for achieving conservation objectives for the Lombardy Natura 2000 regional network, a real implementation of the PAF that will be disseminated also to other regions. The project aims to update the Lombardy prioritised action framework in the following ways: coordinating management; integrating regional policies; training personnel; raising public awareness; and planning measures to conserve biodiversity, such as enhancing connectivity and tackling invasive alien species. For the next financial period 2021-2027, the Ministry for Environment is putting in place actions for improving preparation and use of the new PAFs. In 2018 the Ministry of Environment activated under the budget of the ERDF National Operational Programme (PON) Governance the project ‘Mettiamoci in RIGA’ aimed to support the administrative governance of the Natura2000 sites.A national action plan against the illegal trapping, killing and trade of wild birds was adopted by Italy in March 2017. Its implementation started immediately with high engagement of administrations and stakeholders, working to increasing controls and enforcement mainly on the identified blackspots, propose legal improvements, increase of knowledge and public awareness. On the hunting of bird species with declining populations or unfavourable status, Italy has been working to draft management plans for a number of such species (such as the skylark, rock partridge, grey partridge, turtle dove, black grouse, Barbary partridge and red-legged partridge). Measures to improve the collection of ‘hunting-bag’ data and the assessment of the sustainability of hunting are also ongoing. 2019 priority actions ·Finalisation of SCI and Special Protection Areas (SPA) designations for marine areas. Finalisation of SAC designations and of sites’ conservation objectives and measures. ·Adoption and implementation of new national guidelines to implement assessment procedures under Article 6(3) and 6(4) of the Habitats Directive. Build administrative capacity for their implementation. ·Provide adequate resources and build capacity of competent authorities (at regional and site level) to fully implement site conservation measures and species action plans. ·Full implementation of the national action plan against illegal trapping, killing and trade of wild birds. Maintaining and restoring ecosystems and their services

The EU biodiversity strategy aims to maintain and restore ecosystems and their services by including green infrastructure in spatial planning and restoring at least 15 % of degraded ecosystems by 2020. The EU green infrastructure strategy promotes the incorporation of green infrastructure into related plans and programmes. In Italy, the 2013 law on the development of green urban areas aims to promote green areas for providing ecosystem services (air quality, reduction of hydrological risks, soil protection and culture). The law identifies a set of measures to accomplish this. These measures include green urban planning and monitoring; support to local-level initiatives. As mentioned in the 2017 EIR, the 2014 Charter of Rome on Natural and Cultural Capital highlights the importance of green infrastructure for the green economy and for its natural, cultural, social and economic benefits. In February 2017, the Italian Natural Capital Committee published the first report on the state of natural capital in Italy. This first report collected information on the conservation status of water, soil, air, biodiversity and ecosystems. It also contained a map of ecosystems and an assessment of their conservation status to serve as the first step in identifying restoration priorities to restore, maintain and improve ecosystem services. Ecological network policies are being developed at regional level (e.g. Lombardy) and municipal level (e.g. Rome) which regulate spatial planning at various degrees. On agricultural policies, green infrastructure is mentioned in several EAFRD regional programmes and related measures. The 2014-2020 ERDF and EAFRD regional programmes contain measures to invest in nature-based solutions for flood-risk management. The ERDF is also providing EUR 13.4 million for a green infrastructure project in Basilicata. Various Italian cities participate in Horizon 2020 projects. For example, Mantova is part of the URBAN GreenUP project, which aims to support the co-development of ‘renaturing’ urban plans. These plans focus on climate-change mitigation and adaptation; efficient water management; and the implementation of nature-based solutions. Another project that promotes biodiversity is the Re-Cereal project, which is a RegioStars 2018 finalist co-financed by the ERDF under the Austria-Italy cooperation programme. Re-Cereal aims to reintroduce gluten-free cereals in the Alps to improve biodiversity and healthy eating. The EU has provided guidance on the further deployment of green and blue infrastructure in Italy and a country page on the Biodiversity Information System for Europe (BISE) . This information will also contribute to the final evaluation of the EU Biodiversity Strategy to 2020. By the end of 2018 Italy was to deliver the Report on ‘resource mobilisation’ in conjunction with its sixth national report of the Convention on Biological Diversity (CBD) implementation. Reporting to the CBD on financial flows is important, as it clarifies the financial positions of the EU and the Member States in the CBD. This reporting also helps to support good practice in other countries. Estimating natural capital The EU biodiversity strategy calls on Member States to map and assess the state of ecosystems and their services in their national territories by 2014, assess the economic value of such services and integrate these values into accounting and reporting systems at EU and national level by 2020. Italy started assessing its national ecosystems in 2014. The country recently completed its ‘biophysical evaluation’, which resulted in a map of Italy’s ecosystems. Italy is currently conducting an assessment of its ecosystem services. The second report on the state of natural capital in Italy was published in February 2018. It contained significantly more detailed information on natural capital and ecosystem services. In particular, the biophysical evaluation of terrestrial ecosystems at the regional and regional level has been improved, also with an updates of the state of conservation of some of them. Moreover, the focus on biophysical values of natural capital stocks in the marine ecoregions emphasized the first results of an experimental project of an environmental accounting system for Italian marine protected areas. Concerning the pressures on natural capital, habitat fragmentation and land use of natural and semi-natural ecosystems are analysed at national and eco-regional scale, as primary concerns in conservation and functionality of ecosystems. Attention is devoted to the impact of climate change on the forest ecosystems and to forest fires and drought. The Report also included an exercise to determine an initial framework on biophysical assessment and economic accounting for some ecosystem services in Italy: crop pollination, recreational services, and water purification, carbon sequestration. Moreover, attention was been dedicated to ex-ante and ex-post evaluations of the impact of public policies on the natural capital. The report proposes recommendations and policy interventions for the short and medium term. The third report was expected in February 2019, after the drafting of this report. In September 2018, at the Mapping and Assessment of Ecosystems and their Services (MAES) working group meeting held in Brussels, Italy presented an assessment showing that it had made some progress since January 2016 in its implementation of MAES suggestions (Figure 11). The assessment was part of the ESMERALDA project, which is co-financed by Horizon 2020. The assessment is based on 27 implementation questions and updated every six months. Figure 11: Implementation of MAES (September 2018) Although the EU ‘business and biodiversity’ platform has not yet launched, the long lasting initiative ‘Ecomondo’ provides a good example of involving private sector in green business. Ecomondo is an annual international event with an innovative format that brings together all sectors of the circular economy in a single platform.

Invasive alien species Under the EU biodiversity strategy, the following are to be achieved by 2020: (i) invasive alien species identified;

(ii) priority species controlled or eradicated; and (iii) pathways managed to prevent new invasive species from disrupting European biodiversity. This is supported by the Invasive Alien Species Regulation, which entered into force on 1 January 2015. The report on the baseline distribution of invasive alien species (IAS) (Figure 12), for which Italy has thoroughly reviewed its data, gives an overview of IAS in the EU. This report shows that, out of the 37 species on the first Union list of alien species, 24 have already been observed in Italy. The most widely observed of these species is the coypu (Myocastor coypus). Italy is also the only Member State with an invasion of the kudzu vine (Pueraria lobata). Figure 12: Number of IAS of EU concern, based on available georeferenced information for Italy Between the entry into force of the Union list on 14 July 2017 and 18 May 2018, Italy has not notified any new appearances of IAS of EU concern, according to Article 16(2) of the IAS Regulation. Italy is one of the few Member States with a local population of Pallas’s squirrel (Callosciurus erythraeus), which may still be eradicated. Italy has launched a LIFE project called the ‘alien species awareness programme’ (ASAP). The project will increase public awareness, and reduce both the intentional and unintentional spread of IAS (with a particular focus on the sale of pets and ornamental plants). Italy has notified the Commission of its competent authorities responsible for implementing the IAS Regulation as required by Article 24(2) of the IAS Regulation. The national act providing a detailed framework of the roles and responsibilities in the Italian system and the relevant provisions on penalties applicable to infringements as required by Article 30(4) of the IAS Regulation entered into force in February 2018. Raising the awareness of the public may help in dealing with this issue. A worrying trend is that a 2018 opinion poll shows that 70 % of people in Lombardy have never heard of the problem of invasive alien species. The Ministry of Environment and Italian Institute for Environmental Protection and Research (ISPRA) have carried out several communication campaigns, and have implemented one dedicated website aimed at informing the public on the different aspects of invasive species . Soil protection The EU soil thematic strategy underlines the need to ensure a sustainable use of soils. This entails preventing further soil degradation and preserving its functions, as well as restoring degraded soils. The 2011 Roadmap to a Resource Efficient Europe states that by 2020, EU policies must take into account their direct and indirect impact on land use. Soil is a finite and extremely fragile resource and increasingly degrading in the EU. The percentage of artificial land in Italy (Figure 13) can be seen as a measure of the relative pressure on nature and biodiversity, as well as the environmental pressure on people living in urbanised areas. A similar measure is population density. When the share in both is high, it can be expected that the challenges to protect natural capital and to ensure well-being of people are also high, and adequate implementation of the relevant EU policy and law is a priority. Italy ranks higher than the EU average as regards artificial land coverage with around 7 % of artificial land (EU-28 average: 4.1 %). The population density is 205.86 km2, which is also above the EU average of 118 . The main threats to soil in Italy are soil sealing, land take and diffuse pollution to the soil. Diffuse pollution to soil is closely linked to water-quality issues (in particular nitrates in the Po valley). Some parts of the country are also prone to landslides and flooding, both of which can damage soil. Isolated industrial locations are suffering from soil contamination. Figure 13: Proportion of artificial land cover, 2015 Contamination can severely reduce soil quality and threaten human health or the environment. A recent report of the European Commission estimated that potentially polluting activities have taken or are still taking place on approximately 2.8 million sites in the EU. At EU level, 650 000 of these sites have been registered in national or regional inventories. 65 500 contaminated sites already have been remediated. Italy has registered 22 100 sites where potentially polluting activities have taken or are taking place, and already has remediated or applied aftercare measures on 2 904 sites. As mentioned in the 2017 EIR, many soil protection measures in Italy are included in policies that are not directly connected to the protection of soil. In 2016, the Italian parliament discussed a decree-law on containing the loss of land and re-using soil that has been built on. Ratifying this draft decree-law is also a priority for the current administration. The 2017 EIR mentioned a number of contaminated industrial sites of national interest which require priority remediation. These sites include Piombino and Taranto. According to the RUSLE2015 model , Italy has an average soil loss rate by water of 8.46 tonnes per hectare per year (t ha−a yr−y) compared to a European mean average of 2.46 t ha−a yr−y, which indicates soil erosion is high on average. Soil organic matter plays an important role in the carbon cycle and in climate change. Soils are the second largest carbon sink in the world after the oceans. Italy has an average concentration of soil organic carbon of 20.9 g/kg (across all land cover types) compared to a European average of 47 g/kg.

Marine protection EU coastal and marine policy and legislation require that by 2020 the impact of pressures on marine waters be reduced to achieve or maintain good environmental status (GES) and ensure that coastal zones are managed sustainably. The Marine Strategy Framework Directive (MSFD) aims to achieve good environmental status of the EU’s marine waters by 2020. To that end, Member States must develop a marine strategy for their marine waters, and cooperate with the EU countries that share the same marine (sub)region. The Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean (Barcelona Convention) greatly helps Italy to achieve the goal of the EU’s Marine Strategy Framework Directive (MSFD). These marine strategies comprise different steps to be developed and implemented over six-year cycles. The latest step in the MSFD required Member States to set up and report to the Commission their programme of measures by 31 March 2016. The Commission assessed whether the Italian measures were sufficient for the country to reach good environmental status (GES). Italy’s programme of measures substantially addresses most of the relevant pressures on its marine environment. Italy also reports on a wide range of existing legal acts, conventions, action plans and commitments that it has made at the EU, regional, subregional and national level as relevant measures for the MSFD. In addition, Italy reports on ‘new’ measures, specifically designed for the MSFDs. These ‘new’ measures aim to tackle the pressures directly or to tackle them indirectly by focusing on communication, training, capacity building and research activities. For example, for biodiversity in the bird population, Italy reports on an existing measure in its action plan to reduce incidental catches of seabirds in fishing gear. This measure is complemented by an indirect new measure on training and awareness-raising measures for fishermen to reduce their by-catch of seabirds. Italy reported its measures in 2017. However, Italy has not reported whether GES is expected to be achieved by 2020. Overall, the Italian programme of measures substantially addresses the requirements of the MSFD. Italy has informed the Commission that it is now finalising the update of the environmental assessment of its marine waters, good environmental status and targets. These updates were due to have been sent to the Commission by 15 October 2018. Italy has signed in 2016 a Cooperation Agreement with UNEP/MAP to develop and implement, also through transnational cooperation, important actions in the field of: marine litter, marine spatial planning, integrated coastal zone management and marine protected areas. The triennial Programme of Works for the implementation of the Agreement is worth of more than EUR 2, 000,000. Seven new coastal areas of Italy have been identified as at risk of flooding due to sea-level rise caused by climate change, according to ENEA, the Italian government’s research and development agency. 2019 priority actions ·Complete information on measures to address pressures, and on whether GES will be achieved by 2020. ·Provide more information about measures, establish more measures that have a direct impact on the pressures and quantify the expected level of reduction of the pressure as a result of these measures. ·Ensure regional cooperation with Member States sharing the same marine (sub)region to address predominant pressures. ·Ensure reporting of the different elements under the Marine Strategy Framework Directive by the set deadline. 3.Ensuring citizens’ health and quality of life Air quality EU clean air policy and legislation require the significant improvement of air quality in the EU, moving the EU closer to the quality recommended by the World Health Organisation. Air pollution and its impacts on human health, 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 air quality legislation and defining strategic targets and actions beyond 2020. The EU has developed a comprehensive suite of air quality legislation , which establishes health-based standards and objectives for a number of air pollutants.

Emissions of several air pollutants have decreased significantly in Italy. The emission reductions between 1990-2014 mentioned in the previous EIR Reports, continued between 2014-2016 with emissions of sulphur oxides (SOx) falling by 11.5 %, emissions of nitrogen oxides (NOx) by 5.4 %, and emissions of volatile organic compounds (NMVOCs) by 2.4 %. Meanwhile emissions of fine particulate matter (PM2.5) have increased by 3.9% and emissions of ammonia (NH3) by 4.3 % between 2014 and 2016. Nevertheless, the emission levels for all these pollutants are within the currently applicable national emission ceilings (see also Figure 14 on the total PM2.5 and NOx emissions per sector). Despite the emission reductions since 1990, additional efforts are needed to meet the emission reduction commitments (compared to 2005 emission levels) laid down in the new National Emissions Ceilings Directive for the period 2020 to 2029, and for any year from 2030 on. Air quality in Italy continues to give cause for severe concern. For the year 2015, the European Environment Agency estimated that about 60 600 premature deaths in Italy were attributable to fine particulate matter concentrations, 3 200 premature deaths were attributable to ozone concentrations, and 20 500 premature deaths were attributable to nitrogen dioxide concentrations . Figure 14: PM2.5 and NOx emissions by sector in Italy For 2017, exceedances above the EU air quality standards were registered for concentrations of nitrogen dioxide (NO2) in 25 air quality zones out of 120 (including Torino, Milano and Firenze). For particulate matter (PM10), exceedances above the EU air quality standards were also registered in 31 air quality zones (including several locations in the Po Valley). In addition, 13 air quality zones have indicated exceedances for fine particulate matter (PM2.5, including several locations in the Po Valley). Finally, target values for ozone (O3) and for benzo(a)pyrene in PM10 were also exceeded. See also Figure 15 on the number of air quality zones in exceedance for NO2, PM2.5, and PM10. Persistent breaches of air quality requirements for PM10 and NO2 have severe negative effects on human health and the environment. All such breaches are followed up by the European Commission through infringement procedures covering all the Member States concerned, including Italy. For exceedances of PM10, the Commission has decided to refer Italy to the CJEU (see COM (2018) 330). The aim in referring Italy to the CJEU is to ensure that appropriate measures are put in place to bring all zones into compliance. Figure 15: Air quality zones exceeding EU air quality standards in 2017 According to the European Court of Auditors (ECA), EU action to protect human health from air pollution has not delivered its expected impact. There is a risk that air pollution is being underestimated in some instances because it may not always be monitored in the right places. Member States are required to report real-time air quality data to the Commission; the ECA noted that Italy only partly reported up to date data. On the other hand, Milan was one of the cities examined and good practices were identified in terms of spatial maps used for modelling and downloadable data for analysis. In 2013 and 2017, the Ministry of Environment entered into agreements with four Italian regions to reduce smog in the Po valley basin. Similar agreements are planned for other Italian regions, including Campania, Lazio, Umbria, Sicily and Tuscany. An agreement was signed for reducing air pollution in Rome, surrounding municipalities and the Valle del Sacco in November 2018 Biomass is challenging issue. Like diesel, biomass must be managed, and eight actions are now planned to manage biomass, including agreements between local regions and the central government. Italy has created areas with limited access for cars (‘zona a traffico limitato’) to reduce motor traffic and air pollution in historic urban centres. Initiatives have been launched to end the use of diesel in cities, for example in Piedmont. An example of best practice is the LIFE integrated project PREPAIR, which includes all regions in the Po valley basin and Slovenia. The project will focus on agriculture, biomass, transport, energy efficiency and air quality. Environmental experts from Italy participated in TAIEX workshops on Monitoring air pollution impacts on ecosystems, 4 – 6 April 2018 in Lisbon and on the effectiveness of Air Quality Plans, 10 – 11 September 2018 in Graz. 2019 priority actions ·Take actions and specific measures under the forthcoming national air pollution control programme as well as National Energy and Climate Plan to reduce emissions from the main emission sources and meet all air quality standards. ·Accelerate reductions in nitrogen oxide (NOx) emissions and nitrogen dioxide (NO2) concentrations by further reducing transport emissions, in particular in urban areas. It may also require proportionate and targeted restrictions on vehicle access to urban areas and/or fiscal incentives. ·Accelerate reductions in particulate matter (PM2.5 and PM10) emissions and concentrations by reducing emissions from energy production and from heat generation using solid fuels. It will also require the promotion of efficient and clean district heating.

·Upgrade and improve the air quality monitoring network, and ensure timely reporting of air quality data.

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; and (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). Industrial facilities that engage in certain types of activities regulated under the Industrial Emissions Directive (IED) are referred to as ‘IED installations’. The below overview of industrial activities regulated by the IED is based on the ‘industrial emissions policy country profiles’ project. Figure 16: Number of IED industrial installations by sector, Italy (2015) In Italy, around 6100 industrial installations are required to have a permit based on Cape II the IED. The industrial sectors in Italy with the most IED installations in 2015 were those engaged in the intensive rearing of poultry or pigs (30 % of total IED installations), followed by the waste-management sector (21 % of IED installations) and the surface-treatment industrial sector (12 % of IED installations). This breakdown is shown in Figure 16. The breakdown of the industrial sectors that place the largest burden on the Italian environment through emissions to the air is shown in Figure 17. The EU approach taken to 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 their conditions respected. The development of Best Available Techniques (BAT) Reference Documents (BREFs) and BAT Conclusions through the exchange of information involving Member States, Industrial associations, NGOs and the Commission ensures a good collaboration with stakeholders and enables a better implementation of IED. The Commission relies on and welcomes the efforts of national competent authorities to implement the legally binding BAT conclusions and associated BAT emission levels in environmental permits, resulting in considerable and continuous reduction of pollution. Figure 17: Emissions to air from IED sectors and all other national air emissions, Italy (2015) By way of example, the implementation of the recently adopted BAT associated emission levels for Large Combustion Plants will -on average and depending on the situation of individual plants- reduce emissions of sulphur dioxide with 25% to 81%, nitrogen oxide with 8% to 56%, dust with 31% to 78% and mercury with 19% to 71% in the EU as a whole. In Italy, environmental burdens to water are mostly caused by the sectors of energy-power, energy-refining, chemicals, metal production, waste management and ‘other activities’. The environmental burdens from hazardous waste generation are mostly caused by the sectors of waste management, metal production and chemicals. And the environmental burdens from non-hazardous waste generation are mostly caused by the waste generation and ‘other activities’ sectors. The Commission has in particular welcomed the good cooperation with the administration to efficiently solve issues due to late implementation of the BAT conclusion prohibiting the use of the mercury cell technique by chlor-alkali plants by 11/12/2017. The challenge identified were emissions to the air from the ILVA steel mill.

2019 priority actions ·Review of permits to comply with new adopted BAT conclusions. ·Strengthen control and enforcement to ensure compliance with BAT conclusions. ·Addressing emissions to air from the ILVA steel mill. Noise The Environmental Noise Directive provides for a common approach to avoiding, preventing and reducing the harmful effects of exposure to environmental noise. Excessive noise from aircraft, railways and roads is one of the main causes of environmental health-related issues in the EU . A limited set of data from 2011 indicates that environmental noise causes at least around 1 500 premature deaths and 6 000 hospital admissions per year in Italy. In addition, noise disturbs the sleep of another 1 800 000 people. Implementation of the Environmental Noise Directive is delayed in Italy and an infringement procedure is still open for noise mapping of 2012 and action plans of 2013. In response to that violation, Italy significantly advanced the strategic noise maps of 2012, and advanced in the adoption of action plans of the agglomerations, major roads, major railways and major airports for 2013. These instruments, adopted after a public consultation had been carried out, should include the measures to keep noise low or reduce it. The city of Orbassano is an example of best practice in noise management. Its efforts have made it a candidate city for the 2017 Green Leaf award, which is given to cities that have worked to improve their environment. Orbassano created an acoustic zoning plan, which sets out noise limit values during the day and night for six different land-use areas. Specific noise strategies were also developed for each part of the municipality. Such acoustic zoning is a requirement of Italian rather than EU law. Florence is another example of best practice – it has used LIFE funding to promote acoustic mitigation. Rimini has planned low-noise roads in the centre in its 2018-2023 Action Plan on Management of Environmental Noise. 2019 priority actions Water quality and management EU legislation and policy requires that the impact of pressures on transitional, coastal and fresh waters (including surface and ground waters) be significantly reduced. Achieving, maintaining or enhancing a good status of water bodies as defined by the Water Framework Directive will ensure that EU citizens benefit from good quality and safe drinking and bathing water. It will further ensure that the nutrient cycle (nitrogen and phosphorus) is managed in a more sustainable and resource-efficient way. The existing EU water legislation puts in place a protective framework to ensure high standards for all water bodies in the EU and addresses specific pollution sources (for example, from agriculture, urban areas and industrial activities). It also requires that the projected impacts of climate change are integrated into the corresponding planning instruments e.g. flood risk management plans and river basin management plans, including programme of measures which include the actions that Member States plan to take in order to achieve the environmental objectives. Water Framework Directive Italy has adopted and reported the second generation of RBMPs under the Water Framework Directive and the European Commission has assessed the status and the development since the adoption of the first RBMPs, including Suggested Actions in the EIR report 2017. The most significant pressures on surface water bodies in Italy are diffuse pollution from agricultural (37%) and urban waste water (20%). For groundwater bodies the most significant pressures are diffuse pollution from agriculture (30%) and then abstraction or flow diversion (19%). Organic pollution, chemical pollution and nutrient pollution have the most significant impacts on surface water bodies (25-26%). For groundwaters, the most significant impacts are chemical pollution (34%), nutrient pollution (29%), and abstraction exceeding available groundwater resource (26%).

Figure 18: Ecological status or potential of surface water bodies in Italy Ecological status has been classified for the large majority of water bodies as illustrated in Figure 18, in contrast to the first RBMPs, where a very large proportion of water bodies were unclassified. There was an increase in the proportion of surface water bodies at good or better ecological status/potential from 25% in the first RBMPs to 42% in the second. Ecological status/potential is less than good for 65% of lakes, 50% of rivers and 95% of transitional waters. This shows that Italy has a long way to go to achieve the good status/potential objectives set in the Water Framework Directive. Between the first and second RBMPs there was a large increase in the proportion of surface water bodies with good chemical status from 18% to 72% and an increase in the proportion failing to achieve good status from 4.8% to 8.5%. Importantly, the proportion with unknown status has reduced significantly from 78% to 20%; this reflects the greater spatial extent of monitoring. The total number of groundwater bodies failing good quantitative status increased significantly (by 15%) from the first to the second RBMPs. This increase is also reflected in terms of groundwater body area failing good status. One reason for this increase is that information from Sicily was not available for the first RBMPs. Most significant pressures are identified in the RBMPs and addressed by measures (key type of measures) – except for Sicily - but there is no clear information regarding scope, timing and funding of measures in the second RBMPs and not all measures from the first Programme of Measure are completed (notably ‘governance’ was indicated as an obstacle for the implementation by Italy). Drinking Water Directive On drinking water, no new data has been available since the 2017 EIR. However, the Commission is aware that individual areas in Italy still have problems with their drinking water (such as the arsenic and fluoride in drinking water in Lazio). Leakage of drinking water can also be a problem. The central and southern cities have a higher level of drinking water leakage than the national average. The highest losses in 2012 were in Catania (56.9 % leakage rate) and Cagliari (58.5 % leakage rate). The national leakage rate in Italy is 39 %. A national plan has been drawn up to upgrade reservoirs and aqueducts. Funding from the EFSI is being used to improve the water supply in Milan and Ancona. Bathing Water Directive Figure 19 shows that in 2017, 89.9 % of the 5 531 Italian bathing waters were of excellent quality, 5.2 % were of good quality and 1.9 % were of sufficient quality (90.8 %, 4.9 % and 1.5 % respectively in 2016). In 2017, 1.4% of Italian bathing waters were of poor quality. Detailed information on Italian bathing waters is available on a national portal and via an interactive map viewer provided by the European Environment Agency. Figure 19: Bathing water quality 2014–2017 Urban Waste Water Treatment Directive In urban waste-water treatment, Italy is lagging behind in compliance with the Urban Waste Water Treatment Directive (UWWTD). This is a cause for concern. Overall in Italy in 2014, 93.8 % of waste water is collected, and 71.9 % of the load collected is subjected to secondary treatment. A total of 976 agglomerations have been found to be in breach affecting a population equivalent of over 28 million people. There has been an overall improvement in compliance of around 15% nationally, but in the southern regions this varies from between 25% in Puglia to 3% in Calabria. Italy appointed an emergency commissioner in 2017 to deal with the infringements. Furthermore, the Calabria region, which has one of the highest levels of infringement, has now set up a database containing all the agglomerations subject to legal procedures for their infringements. This has helped to increase transparency.The CJEU ruled against Italy on 31 May 2018 for its non-compliance with the UWWTD, and ordered the country to pay fines. The investment needs estimated in 2014 by the Italian authorities to ensure adequate urban waste water collection & treatment i.e. compliance with the UWWTD was EUR 3000 million. Italy estimated that about 3000 projects on collecting systems and treatment plants must be developed to comply with the Directive. However, a recent study of the OECD estimates even greater investment needs for both water supply and wastewater treatment at the level of approximately EUR 20,155 million for Italy by 2030. Overall, according to the latest data available, in Italy, 99.2 % of waste water is collected. According to the last Implementation Report based on 2014 data, in Italy the waste water situation was the following:

·for secondary treatment: 11.1 % of the waste water load connected to collecting systems was not adequately treated, ·for treatment more stringent than secondary: 12.9 % of the waste water load connected to collecting systems (in which this treatment is required by the Directive), was not adequately treated. In Italy, integrated water services (public water supply, waste-water treatment and sewerage) are regulated by an independent authority called ARERA, which approves the tariff methodologies and tariff plans of water utilities. Tariff calculation is based both on ex-post reimbursement criteria and on a revenue cap to promote efficiency. The tariffs are drawn up in a transparent fashion. Where utilities comply with the regulatory framework, the Water Framework Directive allows them to fully recover their costs through the revenues they make. This increased legal and regulatory certainty attracts commercial investors. Since 2014, there has been steady growth in investment in the Italian water sector (investment grew by 55 % between 2012 and 2015). As mentioned in the 2017 EIR, a new tariff mechanism issued in 2013 takes into consideration the initial operating circumstances of each water-services operator. The mechanism then provides incentives for the operator to invest in its operating activities and make them more efficient. This incentive is equivalent to EUR 33 per capita per year, and helps to fill the infrastructure gap in sewerage and waste-water treatment. Over 80 % of water investments are now financed through tariffs that allow utilities to fully recover their costs rather than through the public budget. Over the 2016-2019 period, projected investments financed through tariffs amount to EUR 7.8 billion, or EUR 9.9 billion in total when public funds are included. Recent changes to the water supply and sanitation markets have made water more affordable for people on low incomes. A range of new technical and infrastructural quality standards have also been introduced by the government. Future investment needs are forecast to reach these new objectives. Despite being the major water user in the country, the agricultural sector pays lower water prices than domestic or industrial users, providing little incentive for efficient water use. The ERDF 2014-2020 allocations for UWWT is EUR 654.9 million and for drinking water is EUR 883.8 million. The Puglia region is efficiently spending the ERDF for urban wastewater with 236,000 additional population already connected in 2017 compared to its target of 320,000 in 2023; however it appears to be an exception. In Campania, over EUR 800 million has been allocated by the ERDF for water 2014-20. European Investment Bank (EIB) loans are also being used to upgrade and extend urban waste-water treatment, for example in Sardinia in 2018. As mentioned in the 2017 EIR, water scarcity and drought risks exist in Italy. National guidelines were adopted in February 2017 on abstraction and setting up environmental flows. In order to maximise water resources, the operators of acqueducts are reusing urban wastewater for agricultural, industrial and anti-incendiary purposes (e.g. Puglia with the ERDF and under EFSI, Sardinia and Veneto). Nitrates Directive The Commission’s assessment of data on the implementation of the Nitrates Directive for 2012-2015 shows that there are monitoring stations with an average annual nitrate concentration equal or exceeding 50 mg/l in groundwater outside Nitrates Vulnerable Zones (NVZs) in several regions except Valle d’Aosta and Alto Adige. Lombardia and Piemonte received derogations in 2015 until 31 December 2019. Floods Directive The Floods Directive established a framework for the assessment and management of flood risks, aiming at the reduction of the adverse consequences associated with significant floods. Italy has adopted and reported its first FRMPs under the Directive and the European Commission conducted an assessment. The Commission’s assessment found that good efforts were made with positive results in setting objectives and devising measures focusing on prevention, protection and preparedness. The assessment also showed that, as was the case for other Member States, Italy’s FRMPs do not yet include measures that are clearly prioritised and linked to the objectives set and an as complete as possible estimation of the cost of measures with identification of specific sources of funding. In addition, there is scope for reinforcing climate change considerations in its FRMPs including coordination with the NAS. In 2016, there were 31 flood incidents registered all over the national territory. According to data collected by ISPRA the damage caused by floods (and landslides) were at least EUR 1.96 billion (2016) & EUR 1.31 billion (2017). In November 2018 Italy was hit again by floods and landslides with EUR 6 million made available from all sources. The 2017 EIR described in detail the national operational plan for the mitigation of hydrogeological risk in the period 2015-2020. In March 2017, EUR 2 billion was put aside within the plan for the mitigation of hydrogeological risk through 500 projects. . The ERDF has co-financed control of flood risks in Veneto, reducing flood risk by 75% in Vicenza. The ERDF has also provided EUR 1 million for the URAMET project to provide harmonised meteorological data from violent storms in French and Italian coastal regions caused by climate change. Italy is using funding from the ERDF and EAFRD to co-finance nature-based flood defences. An example of this green infrastructure is the Payment of Ecosytem Services (PES) scheme (the LIFE supported ‘Bosco Limite’ project) in the province of Padua. There is a EUR 800 million loan from the EIB to mitigate hydrogeological risks. The EIB is also financing a specific loan to deal with flood risk upriver from Florence, which was hit by a severe flood in 1966. 2019 priority actions

·Take steps to harmonise different regional approaches, in particular for the definition of the significance of pressures in relation to of the Water Framework Directive. ·Reinforce metering for all abstractions, and review abstraction permits systems, especially in areas with water scarcity problems. ·Designate missing nitrate vulnerable zones. ·Take steps to reinforce climate change considerations in its Flood Risk Management Plans including coordination with the National Climate Change Adaptation Strategy. Chemicals The EU seeks to ensure that by 2020 chemicals are produced and used in ways that minimise any significant adverse effects on human health and the environment. An EU strategy for a non-toxic environment that is conducive to innovation and to developing sustainable substitutes, including non-chemical options, is being prepared. The EU’s chemicals legislation provides baseline protection for human health and the environment and ensures stability and predictability for economic operators within the internal market. The 2016 European Chemicals Agency (ECHA) report on the operation of REACH and CLP showed that enforcement activities are still evolving. In the Forum for Exchange of Information on Enforcement, coordinated enforcement projects have shown that the effectiveness of the enforcement activities can still be improved, in particular regarding registration obligations and Safety Data Sheets where a relatively high level of non-compliance has been found. Whilst improving, there is room for further improvement of national enforcement activities as regards harmonisation throughout the Union, including controls on imported goods. It is also clear that enforcement is still weak in some Member States in particular with respect to control of imports and supply chain obligations. The architecture of enforcement capabilities continues to be complex in most EU countries. The enforcement projects also revealed some differences among Member States (e.g. some tend to systematically report higher compliance than the EU average and others lower). A 2015 Commission study highlighted already the importance of harmonisation in the implementation of REACH at Member State level, in terms of market surveillance and enforcement, as a critical success factor in the operation of a harmonised single market . In March 2018, the Commission published an evaluation of REACH. The evaluation concludes that REACH delivers on its objectives, but that progress made is slower than anticipated. In addition, the registration dossiers often are incomplete. The evaluation underlines the need to enhance enforcement by all actors, including registrants, downstream users and in particular for importers, to ensure a level playing field, meet the objectives of REACH and ensure consistency with the actions envisaged to improve environmental compliance and governance. Consistent reporting of Member State enforcement activities was considered important in that respect. The Italian Competent Authority for REACH is the Ministry of Health. The national Inter- Ministerial Decree 22 November 2007, O.J. n.12 of 15 January 2008 establishes the cooperation between the Competent Authority and other administrations (Ministry of Environment, Ministry of Economic Development, National Institute of Health, National Institute for Environmental Protection and Research and Regions) . Italy is one of the main producers of chemicals in Europe. The Italian chemical industry is concentrated in the north of the country, close to European markets and local customer companies. SMEs play a very significant role in many European countries, but their presence is particularly significant in Italy, where they account for 39 % of the total value of chemicals production. Furthermore, a high number of micro-firms (smaller than SMEs) are producing chemicals in Italy, higher than any other Member State . Pesticides have been found in two thirds of the Italian surface-water samples investigated by ISPRA, and the problem is particularly severe in the north-east of Italy. The chemicals most present in surface waters were glyphosate and its metabolite AMPA. The Environment Ministry has annonced a rexamination of discharge limits for polyfluoroalkyl substances (PFAS) and other chemicals ; following an emergency in 2017the Veneto region used the acqueduct system to reduce concentrations in the worst hit areas. Italy’s technical coordination committee (CTC) is an example of best practice in national-level governance of the REACH Regulation. The CTC gathers relevant branches of the public administration to agree a common position at both the national and EU level. To share this governance experience, a website has also been set up, allowing a continuous dialogue to take place among all relevant stakeholders. Italy is using the Commission’s Enterprise Europe Network to improve awareness of companies of their REACH roles and the obligations, a particular challenge considering the high number of micro and SMEs in the chemical sector . Italy has undertaken a variety of actions to promote the substitution of hazardous chemicals between 2010 and 2018. In 2017, two dedicated events were organised with the participation of ECHA and the Commission, and a survey among industry players was launched to learn more about cases of substitution. In 2018, two new workshops were planned and a working party on substitution was set up within the Ministry of Health . REACH inspectors have been trained in Italy by ECHA . Several LIFE projects on chemicals have also been supported in Italy. There is also an ongoing infringement procedure against Italy for the non-conformity of Italian legislation with Directive 2010/63/EU on the protection of animals used for scientific purposes. Inter alia, Italy introduced more stringent measures, thus going beyond the range of normative discretion allowed by the Directive. Making cities more sustainable

EU policy on the urban environment encourages cities to put policies in place for sustainable urban planning and design. These should include innovative approaches to urban public transport and mobility, sustainable buildings, energy efficiency and urban biodiversity conservation. Europe can be seen as a Union of cities and towns: around 75% of the EU population are living in urban areas and this figure is projected to rise to just over 80% by 2050. The urban environment poses particular challenges for the environment and human health, whilst also providing opportunities and efficiency gains in the use of resources. Municipalieites are stimulated to become greener through the Green Capital Award , the Green Leaf Award and the Green City Tool . Financing greener cities Italy has allocated 5 % of its ERDF budget for 2014-2020 to sustainable urban development. It also has a national ERDF operation programme dedicated to metropolitan cities for the period 2014-2020. In addition, Italy participates in the Urban Development Network. The town of Portici in the Naples metropolitan area won a Urban Innovative Action (UIA) on urban air quality in October 2018. Participation in EU urban initiatives and networks So far, no Italian city has either won or been shortlisted for the European Green City or Green Leaf Award. For the Green City award, Reggio Emilia applied in 2016, Bologna and Florence applied for 2019 and Prato applied for in 2020. For the Green Leaf award, Grottaglie applied in 2018, Aosta, Orbassano and San Miniato applied in 2017 and Siena applied in 2015. Italian cities are involved in 26 thematic networks dealing with urban issues through the ERDF-supported URBACT initiative to promote sustainable urban development. Italian cities are coordinating various URBACT networks: Cesena is coordinating ‘Jobtown’, which seeks to promote employment and opportunities for young people. Genoa is coordinating ‘Interactive Cities’, a network for improving digital-media, social media and user-generated content. Naples is coordinating the ‘Second Chance’ network, which seeks to make better use of vacant buildings and building complexes. It is also coordinating the CTUR network for the recovery of urban and harbour heritage. Piacenza is coordinating the ‘MAPS’ (Military Assets as Public Spaces) network. San Donà di Piave is coordinating the ‘CityCentreDoctor’ network to revitalise city centres. Turin is coordinating the ‘Building Healthy Communities’ network. Venice is leading the ‘MILE’ network for regions seeking to promote economic change. Italian cities are also heavily involved in initiatives such as Eurocities and the EU Covenant of Mayors. In addition, Italian cities are involved in various EUsupported ‘smart cities’ initiatives, especially on energy. All of these efforts should be encouraged, as slightly more than 19.4 % of people in Italian cities in 2017 reported that they lived in an area affected by pollution, grime or other environmental problems. This compared to an EU average of 20.0 %. The change in these percentages in recent years is shown in Figure 20. The Sustainable Development Foundation published a report in 2017 specifically looking at the challenges for the green economy in cities. Legambiente publishes an annual report on the urban ecosystem. The annual reports by CENSIS are another source of information on urban social trends of environmental relevance. The EU funded PASTA project compared citizen concerns about air pollution in 7 European cities. The results revealed that, on average, 58% of participants were worried about the health effects of air pollution with the figure for Rome being 72%. Figure 20: People in Italian cities reporting that they live in an area affected by pollution, grime or other environmental problems Nature and cities 11 % of the Natura 2000 network in Italy is within urban areas, below the EU average of 15 % (see Figure 21). The indicator for access to green areas(where a higher number means greater or easier access) are Milan: 6.9, Naples: 4.1 and Rome: 11.7. Of the 14 metropolitan cities in Italy, the greenest is Genoa with an indicator of 17.3, and the least green is Messina with an indicator of 0.9. The Italian statistics agency ISTAT does not have more up-to-date information on urban green space. A study on sustainable urban drainage systems in Avola, Sicily showed that green roofs can be more effective than permeable paving for controlling flood risk. In the study, green roofs halved the volume of flooding over a 10-year period, while permeable paving only slightly reduced the incidence of flooding. Figure 21: Proportion of Natura 2000 network in Functional Urban Areas (FUA)

The annual budget law of 2018 provides a green bonus of 36 % on the costs up to EUR 5 000 for restructuring and irrigating gardens and green areas in building complexes. Urban sprawl In 2009, Italy had the highest weighted urban proliferation (WUP) with 2.18 UPU/m2 compared to a European average (EU28+EEA4) of 1.64 UPU/m2. This represented an increase of 4.59 % from 2006 to 2009. Urbanisation is highest in the north, with Lombardy having a WUP of 4.30 UPU/m2. Traffic congestion and urban mobility Passenger cars account for a large share of Italy’s ‘modal split’ (the percentage of passenger kilometres travelled within a country, on private passenger cars, trains, buses or coaches). The total number of passenger cars in 2015 in the modal split was 80.7 % (EU average: 81.3 %). Italy also scores high on ownership of passenger cars. Italy had 625 passenger cars per thousand inhabitants in 2016, well above the EU average of 505 passenger cars. There is a dedicated ERDF national programme for metropolitan cities 2014-2020. The 2015 Environmental Act also provides funds for sustainable transport in cities. According to INRIX, a transport-data analytics company, the average number of peak-travelling-time hours spent in traffic congestion in Italy in 2017 was 15. Rome was ranked as the most congested city with a figure of 39 hours. People in Italy spent almost 38 hours in traffic congestion in 2016, an increase from 35.5 hours in 2014. Just over half of people (56 %) who live in cities walk every day, compared to the European average of 68 %. 66 % of Italian city-dwellers say they use a car every day, compared to the EU average of 50 %. On public transport, 13 % of urban Italians use public transport daily, which is below the EU average of 16 %. When asked how often they cycle in the city, 13 % of Italian city-dwellers cycle at least once a day, compared to an EU average of 12 %. ‘Smart mobility’ means increasing the sustainability, efficiency and effectiveness of the transport system, primarily through improved connectivity. A 2017 study examined sustainable transport on a national level in Italy from 2005 to 2015 to see how sustainable urban mobility plans or SUMPS (proposed by the Commission in 2013) were implemented. SUMPS provide the framework for ERDF investments, and in Italy a decree requires municipalities with more than 100.000 inhabitants to prepare and adopt such plans within two years. The researchers looked at 22 Italian cities to assess changes in public transport, cycle lanes, bicycle-sharing and car-sharing schemes. Public transport showed the least change in the study, with demand remaining constant between 2005 and 2015. The main improvements to public transport were in technology, such as smart-phone apps to buy tickets and check timetables. For cycle lanes, the northern Italian cities generally showed greater bike-path development, although Cagliari and Palermo extended their bike paths and cycle infrastructure. The study also showed that bike-sharing schemes expanded rapidly during the ten-year period. Car sharing has also become more widely available in Italy, according to the study. In 2005, car sharing was only available in four cities, but by 2015 the availability of car sharing in these cities had increased, and five more cities had developed schemes. However, the researchers point out that the success of car-sharing schemes is linked to good public-transport systems, as the two services are complementary. ‘Park-and-ride’ services have also been developed in most cities. The study showed that electric modes of transport were still limited in Italy and electric vehicles made up only 0.01 % of all cars in the cities studied in 2015. Not all Italians have easy access to public transport. In 2012, the percentage of the population having a very high or high level of difficulty in accessing public transport was 37.5 % in rural areas, 36 % in towns and suburbs and 22.7 % in cities. The ERDF-supported flagship project for a tram system in Florence is still under construction. EIB loans are being used in Naples to complete the city’s metro system. The ERDF is also being used in Lombardy to promote the construction of cycle lanes and the installation of recharging points for cars. As mentioned in the 2017 EIR, the government has set up national observatories for shared mobility and on local public transport. The Connecting Italy (‘Connettere Italia’) strategy for transport infrastructure and logistics, continues to be implemented. The national reform programme 2018 also refers to various transport and logistics plans of relevance to urban areas. Part II: Enabling framework: implementation tools 4.Green taxation, green public procurement, environmental funding and investments

Green taxation and environmentally harmful subsidies Financial incentives, taxation and other economic instruments are effective and efficient ways to meet environmental policy objectives. The circular economy action plan encourages their use. Environmentally harmful subsidies are monitored in the context of the European Semester and the energy union governance process. Italy’s environmental tax revenues amounted to 3.33 % of Gross Domestic Product (GDP) in 2017 (the EU 28 average was 2.4 % of GDP), as shown in Figure 22. Energy taxes amounted to 2.65 % of GDP, with the EU average being 1.84 %. In the same year, environmental tax revenues accounted for 7.85 % of total revenues from taxes and social-security contributions (EU-28 average: 5.97 %). Labour tax revenues as a share of total tax revenues was in line with the EU average, at 49.1 % in 2016. The tax burden on labour was 42.6 % in 2015. Consumption taxes remained relatively low (26.5 % of tax revenues, placing Italy 24th in the EU-28). This suggests there is significant potential for shifting taxes from labour to consumption and in particular to environmental taxes. In the European Semester (the Commission’s annual assessment of Member States), the Commission has repeatedly highlighted the potential in Italy to increase certain environmental taxes. It recommended greater environmental taxes in both 2017 and 2018. Nevertheless, there are several instances of Italy implementing sound fiscal measures on the environment. A good example is the phytosanitary production