We The Italians | Italian report: GreenItaly 2023

Italian report: GreenItaly 2023

Italian report: GreenItaly 2023

  • WTI Magazine #170 Dec 18, 2023
  • 689

We cannot afford the slow and uncertainties with which the implementation of the 2030 Agenda is proceeding. Even in some policies in our country. Think of the delay on renewable energy.

Take action immediately, not postponing but anticipating and accelerating investments in the green transition and renewable energy, can not only increase the our country's financial stability, but can reduce the medium-term costs for households, banks, and institutional investors and future-proof the made in Italy of the future.

But where do we stand? In the United States, the energy transition campaign launched in 2022 with the signing of the Inflaction Reduction Act (IRA) and an endowment of 370 billion of incentives over 10 years that are estimated to mobilize 3 trillion in investment private sector, plus 100 billion from the Environmental Protection Agency (Epa) for emission reductions from gas and coal-fired power plants along with transparency regulations, outline the contours of a new industrial policy in response to China on the strategic frontier of the economy of the future.

China, now a leading manufacturer of electric cars, batteries and photovoltaic panels, after the announcement in 2020 at the UN of reaching peak emissions by 2030 and carbon neutrality by 2060, is developing a new finance green, which will play a key role in achieving peak emissions of carbon by 2030 and the goal of neutrality in 2060, which is estimated to need 570 billion a year.

Europe, which has focused its model on cohesion, green transition and digital, despite resistance from some political cultures and productive categories production, has interpreted this as a challenge to increase the competitiveness of the Union. A major discontinuity for our economy, called to innovate products and services to align with the new standards and to create a workforce skilled workforce for the energy transition.

EU Commission President Ursula Von Der Leyen highlighted how the battery industry will create more than 800,000 specialized jobs in the next two years alone. The energy industry will need more than one million skilled workers by 2030, double of the current ones. In the wind industry alone, it is estimated that the world will need to recruit 800 new technicians in the next five years. On the renewables front, 2023 saw an acceleration in power world that is expected to continue in 2024. Renewable energy had already contributed 29.9 % of global electricity generation in 2022, with solar and wind reaching a new record high.

In the European Union, the issue of energy security following the invasion Russian invasion of Ukraine has strengthened renewables: in 2022 for the first time, solar and wind surpassed gas in electricity generation. While in 2023, for the first time in May, solar and wind generation allowed to surpass the contribution of electricity generation from fossil fuels (oil, gas, coal).

Unfortunately, Italy is still too slow in developing of renewables, which help reduce the imports on which we depend and stabilize prices. In fact, Italy is a net importer of energy (80 % of its total energy supply). The slowing factor is always bureaucratic, with slow regions and "cultural" issues still undermining the growth of renewables. In fact, in 2022, power from renewable sources of 3 GW, compared to Germany's 11 and Spain's 6, a figure far from the target of about 8-9 GW per year to be installed by 2030. These are numbers still too low compared to the needs but also compared to what the Italian industrial system could guarantee. Wind power is growing very little and on the off-shore we are still stuck with the only plant off the coast of Taranto (Apulia). However according to Terna data in the first seven months of 2023, operating solar capacity grew by as much as 2.7 GW (+113 % compared to the same period in 2022), again driven by small-scale installations.

A boost to photovoltaics may come from the completion by next year of Europe's largest photovoltaic panel plant by Enel Green Power in Catania (Sicily), which will have when fully operational a capacity production capacity of 3 GW per year and will employ 1,000 direct employees and as many in allied industries.

Italy, on the other hand, confirms its leadership on the material recovery front, a field in which the country, poor in raw materials, has long excelled. The capacity in the recycling of total waste (urban and special) in Italy has reached a record 83.4 % (2020), a rate far higher than the other major European economies, Germany (70 %), France (64.4 %) and Spain (59.9 %), and the EU average (52.6 %).

Among the virtuous supply chains was that of papermaking, a sector with a great tradition in manufacturing recycling, which in 2021 saw it reach an all-time high in the use of pulp (62.9 %). Also in the used mineral oil sector, Italy is confirmed in 2022 excellence in Europe with 98 % of the total collected regenerated into bases for lubricants, light oils and other petroleum products.

Italy is also the world's fourth largest producer of biogas - from organic fraction, sewage sludge and agricultural sector - after Germany, China and the United States, proving proof of Italy's potential in the valorization of secondary matter.

Also good is the performance of the Italian production system, which, for the same value produced, generates less waste, with 46.6 tons of waste per million euro produced (2020) - second only to Spain (41.2) - and a utilization rate of second matter at 18.4 % (2020), very close to that of France (19.8 %).

Added to these is the performance in productivity in the use of raw materials (GDP/Domestic Material Use) with a score of 269 (2022) - vs. an EU average of 151 - and in productivity in energy consumption (GDP/Gross energy) with 160 points - followed by Germany with 155. Also good is the positioning relative to emissions productivity (GDP/CO2eq), with Italy second among the large European economies at 215 points, preceded by France.

Data closely correlated with the growth in quality of goods and services made in Italy, also linked to the central role that design plays in our country: Italy is first in Europe in terms of employment and turnover in the design sector.

This performance is closely linked to investments in products and green technologies. In the five-year period 2018-2022, more than 1 (non-agricultural) company in 3 made eco-investments (510,830 or 35.1 %), 2 out of every 5 in the manufacturing industry (95,410 units, or 40.8%). A comparison with the previous survey period (2014-2018) shows a growth in the number of eco-investor enterprises (the incidence on total enterprises increases from 24.9 % in the first period to 35.1 %).

In the agricultural sector, the percentage of enterprises that have made eco-investments turns out to be 41 % for enterprises in the agriculture (crop and livestock) sector, while smaller percentages are observed for enterprises in forestry (23 %) and fisheries (31 %).

It should also be noted that the growth of green investments in the companies in the Center-South - noted in the latest surveys - has cancelled out the territorial imbalances in the peninsula related to the distribution of ecoinvestor companies.

Looking at economic performance provides a better understanding of the reasons that drive enterprises to invest in green products and technologies. The enterprises eco-investors are in fact more dynamic in foreign markets than those that do not invest (30 % of the former expect an increase in exports in 2023, compared with a smaller 20 % of those who have not invested), they expect in greater numbers an increase in turnover (47 % vs. 40 %) and in hiring (29 % versus 19 %). They also have a greater ability to create associations and network.

In the construction world, the need remains in the field to find measures to improve the energy of buildings and thus reduce, in addition to emissions, the cost of bills for households and businesses. Indeed, the heating of buildings contributes 18 % of CO2 emissions and more than 50 % of particulate matter in Italy, and it is therefore essential to reduce this impact to ensure an effective transition green sector. Among the decarbonization technologies of particular importance are next-generation heat pumps that use, for their operation, energy that comes 75% from nature.

The home-furnishing supply chain continues its path of ecological transition: the 64.1 % of companies purchase renewable raw materials or semi-finished products sustainably, 51.1 % have implemented business models oriented to circularity, and about 70 % have made investments in efficient processes.

The fashion industry needs to innovate as soon as possible to comply to the EU Strategy for Sustainable and Circular Textiles, which defines a set of goals to be achieved by the industry to ensure by 2030 a real circularity of textile products placed on the European market. The fashion sector is therefore working on ecodesign, on reducing its carbon footprint, to improving the integration between production systems and natural capital/biodiversity.

The mechanical engineering sector, the second largest in Europe in terms of employment, is facing the reckoning with the challenge of ecological transition in a mature context that, thanks to the regulatory push on eco-design of products, will be able to accelerate the innovation process.

Increasingly stringent targets, on the other hand, for the automotive supply chain, which is aiming at to the electrification of transport vehicles to align with the decision of the Council European Environment, Climate and Energy Council on banning endothermic engines from 2035. In Italy, in the midst of a sharp contraction in production, electric and hybrids have reached 60 % of total national production (it was 40 % in 2021). The push for electrification has also had its effects for businesses of components, with 1 in 3 companies having positioned themselves in the market for electrified vehicles. Italy is also working to develop a supply chain dedicated to electric public transport vehicles and hydrogen technologies.

Bio-based chemistry, continues its path of research and demonstration in the field of new industrial applications, which are increasingly highlighting the sector's contribution to decarbonization.

Also moving in this direction are important realities of sectors as complex as the steel sector, which is seizing the challenge of steel green and the market opportunities offered by this new production.

GreenItaly tells numbers and stories of a system that now sees in sustainability not only a necessity but an opportunity to compete, to innovate to create cohesion and beauty. Starting with an Italy that is already in the field: as the Assisi Manifesto recalls, "there is nothing wrong in Italy that cannot can be corrected with what is right in Italy."

 

Andrea Prete - President Unioncamere

Ermete Realacci - President Fondazione Symbola