Italy profile

Overview

The final energy consumption climate corrected in 2022 was 112.7 Mtoe, almost in line with pre-COVID pandemic consumption in 2019 (-1.2%) and below the consumption in 2000 (-5.6%). In 2022 the largest consuming sector was transport with 32% of total final energy consumption (1 percentage points decrease since 2000). Over the period 2000-2022 the share of residential and services sectors grew by 4.4 and 5.4 percentage points, respectively: the building sector, comprising residential and services sectors, represents 43% of total final energy consumption in 2022. The share of industry decreased from 31% in 2000 to 22% in 2000 (-12 Mtoe).

Energy efficiency of final consumers, as measured by ODEX, improved by 20% over the period 2000-2022 at an average of 1% per year. The highest progress in energy efficiency was achieved by the industry: 1.4% per year over the period 2000-2022. The improvement in transport sector was quite constant, 1.2% per year, with however an acceleration in the years 2015-2018 due to an increase in passenger traffic that was greater than energy consumption. The residential sector had a slower energy efficiency progress (0.7% per year over 2000-2022).

In July 2024, Italy submitted the final update of the NECP with a significant reduction in primary and final energy consumption due to the planned measures: in particular, increase in the rate of renovation of buildings (in line with Directive (EU) 2024/1275) with the electrification of consumption, insulation of dispersing surfaces, and heat pumps as the main heating system. Tax incentives will be revised to take into account investment priorities and effectiveness in terms of improvement. The Plan estimates overall energy savings over the period 2021-2030 equal to 73.4 Mtoe. L.D. n. 73/2020 transposes the EU directive 2018/2002 on the Energy Efficiency First Principle into the Italian regulatory framework. The L.D. provides incentives for SMEs for the implementation of energy management systems ISO 50001 and for energy audits every two years until 2030, extends to 2030 the National Energy Efficiency Fund and Programme for the Energy Renovation of the buildings of the Central Public Administration (PREPAC). Ministerial Decree 10 August 2022 allocated 2 billion euros for the Fund for development and cohesion (FSC 2021-2027) to finance investments to help decrease direct GHG emissions through electrification, the use of renewable hydrogen instead of fossil fuels, and the reduction of energy consumption.

Buildings

The household energy consumption per m2 for space heating has decreased by 0.7%/year since 2008 from 10 koe/m2 to 9.06 koe/m2 in 2022. The consumption per dwelling for the other end-uses has decreased rapidly since 2010 to 0.37 toe/dw in 2022 (-1.7%/year for a total of -18%). In particular the decrease was quite significant for water heating (-2.8%/year) and for appliances (-2.2%/year). The consumption per dwelling for air cooling doubled over the period 2010-2022.

The energy consumption of households grew by 2.4 Mtoe between 2000 and 2022. This increase was mainly due to two factors: more dwellings (+5.7 Mtoe) and greater comfort and lifestyle (+4.9 Mtoe, especially more appliances per dwelling). The effects of energy consumption increase were counterbalanced by energy savings (-5.6 Mtoe) and other effects (-2.1 Mtoe). These “other effects” combine two effects acting in different directions: the increasing use of ambient heat from heat pumps (+0.8 Mtoe) and behavioural changes (-2.9 Mtoe). Climate effects had a slight increasing impact of 0.3 Mtoe.

Energy consumption per employee in service sector had a growing trend over the period 2000-2022: 1%/year with the peak in 2018 due to ambient heat counting. The electricity consumption per employee grew by 1.6%/year between 2000 and 2022, with a net slow down since 2011 (only +0.3%). Since 2021 electricity consumption includes the electricity consumption for heat pumps.

The Budget Law 2025 reduced the tax deductions for building renovations from 50% to 36% in 2025 and 30% in 2026-2027. In 2023 energy savings from tax deduction amounted to 2.04 Mtoe/year of energy. The Superbonus measure has been gradually weakened from 2023. In August 2022, the Italian government added EUR 500 million to the Fund for development and cohesion (total fund EUR 2 billion). This will finance investments for electrification, use of renewable hydrogen instead of fossil fuels, and the reduction of energy consumption. These projects are divided for 80% in Southern Italy and 20% in the Centre and North Italy. The Component C3 of Mission 2 of NRRP allocated 15.36 billion euros for buildings renovation across 3 lines of action: energy efficiency improvements of school buildings and judiciary buildings, energy efficiency improvement and seismic renovation of public and private residential buildings, district heating. The renovation will affect over 100,000 buildings, for over 36 million square meters. 

Transport

Road transport for passengers and freight is the main mode of transport, 95% of energy consumption. In 2022 cars covered 52% (59% in 2000) of total consumption, followed by road freight for 37%. Over the period the share of rail and air transport consumption remained almost constant while water redused by 54%.

The share of passenger traffic by car was 81.6% in 2022, followed by bus with 10.9% and rail with 7.6%. The share of cars decreased by 1.2 percentage points since 2000 while the share of rail increased by 1.2 percentage points. The share of bus remained stable.

The share of freight transport by road was 87.8% in 2022, slightly down from 2000 (-0.8% points), while the share of rail transport increased by 0.9% points since 2000 to 12.2% in 2022. The share of water transport was negligible.

Over the period 2000-2022, transport energy consumption reduced by 3.4 Mtoe (-8.5%). Energy savings (9.2 Mtoe) and decrease in activity (-1 Mtoe), due to a drop in passenger and freight traffic, led to a cut in energy consumption, which was partially counterbalanced by an increase in the share of road transport (“modal shift”) (0.6 Mtoe) and other effects (6.2 Mtoe), mainly low load factor in passenger and goods traffic.

The 2023 Budget Law established a new fund for sustainable mobility aimed to achieve the emissions targets. The fund has an allocation of 2.2 billion euros for the period 2023-2034 intended to finance the renewal of buses, hydrogen trains, intermodality in the freight transport of goods, alternative fuels for ships and airplanes, the transformation of airports, the renewal of road transport vehicles. MIT-MEF Interministerial Decree n. 166/2023 set “Sea Modal Shift” replacing Marebonus: new incentive program for maritime companies to road/sea shift in short-medium range maritime transport: 21.5 million euros annually for years 2023-2026. The MIT Decree n.134/ allocates 22 million euros annually for Ferrobonus incentives for years 2023-2026. In 2023 energy savings amounted to 3.5 Mtoe/year of final energy.

Industry

Over 2000-2022 energy consumption of industry decreased by 1.8%/year, from 36.8 Mtoe in 2000 to 24.7 Mtoe in 2022. All branches had significant decreases, especially non-metallic minerals (-43%), chemicals (-35%) and steel (-32%). The share of energy intensive branches (chemicals, steel, non-metallic minerals, non-ferrous metals and paper) was around 60% in 2022.

The unit consumption of steel decreased by 1.5%/year over the period 2000-2022: some fluctuations were observed due to non-used production capacity and the economic crisis. The unit consumption of cement reduced by 2.3%/year: it remains quite stable over the period 2007-2014. The unit consumption of paper is at 2000 levels.

The energy consumption of industry in 2022 was 12 Mtoe less than in 2000 (-32.6%). This decrease was mainly driven by energy savings (-10 Mtoe) and by a lower industrial activity, mostly due to the economic crisis and recession in years 2007-2015, which reduced consumption by 4 Mtoe. The effect of the structural changes towards less intensive branches contributed to lower consumption by 2.2 Mtoe.

The Transition Plan 5.0, established by art. 38 of Legislative Decree 19/2024 and converted into Law 56/2024, grants a tax credit to enterprises that invest in innovation projects resulting in a reduction in energy consumption. The tax credit is proportional to the expenditure incurred for the investments made and the reduction in energy consumption. The Plan provides a total of approximately 13 billion in the two-year period 2024-2025. The measure is included in NECP 2024.