When assessing the full recovery package (including funds from the EU Recovery Facility, REACT EU and the Complementary Fund), Italy reaches a green spending share of 13%.
According to the government, the RRP achieves a climate spending share of 40%. At the same time, we find that 26% (€49.5bn) may have a positive or negative impact on the green transition depending on the implementation of the relevant measures. We find that Italy’s recovery plan (RRP) achieves a green spending share of 16%, below the EU’s 37% benchmark. In some cases, fossil gas activities can directly access recovery resources, for example through the inclusion of support for gas boilers in energy efficiency investments or support for gas-powered buses, which would lead to a lock-in risk of infrastructure which will slow down the climate transition. There is also a risk that a relatively high share of the recovery funds will be allocated to projects on, for instance, biomethane and hydrogen, which are attributable to the gas sector. In particular, we note that there is a lack of appropriate support for crucial pillars of the energy transition, notably the expansion of renewable energy generation and the direct use of electricity, as well as local sustainable mobility infrastructure.Īltogether, the plan and the associated reforms favour permitting procedures for gas infrastructure while not pushing the electrification of final energy use. Many of the green investments in the plan are only likely to bring about an incremental shift towards a climate neutral economy and look fairly insignificant relative to the needs of an economy-wide transition to climate neutrality.
While the plan includes investments into measures that are relevant to the green transition, there is a significant imbalance in the allocation of funds between sectors and activities. Overall, Italy’s recovery measures fall short of the green transition potential of the recovery funds available. The RRP draws on €235bn in total, with €191.5bn coming from the EU Recovery Facility (€68.9bn grants, the remainder loans), €13bn from the REACT EU Fund, and €30.6bn from a complementary fund using domestic funding sources. The final Italian Recovery and Resilience Plan (RRP) was presented by Prime Minister Draghi on 27 April 2021, after disagreements over an earlier version of the plan led to the dissolution of the previous government.
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