The shift towards circularity is necessary both to improve resource efficiency and to contribute to the reduction of climate-altering emissions.
The goal is to build "a modern, resource-efficient, and competitive economy" through an ecological transition capable of bringing about profound changes in production and consumption systems while ensuring social cohesion and justice.
The Action Plan for the Circular Economy - approved by the European Parliament in February 2021 - is a fundamental pillar of this strategy, aiming to accelerate the transition towards a circular and regenerative economy, including:
- Eco-friendly product design for sustainability, product durability, and reusability, and the use of recycled materials.
- Circularization of production processes, including industrial symbiosis, regenerative bioeconomy, digital resource traceability, and green technologies.
- Specific interventions in sectors with high resource intensity or significant environmental impact, such as plastics, textiles, construction, electronics and ICT, batteries, packaging, food products, and water.
- The "right to repair" and combating premature obsolescence of products.
The National Transition Plan, presented by the Government in October 2021, also emphasizes that "the circular economy is an epochal challenge aiming at the eco-design of durable and repairable products to prevent waste and maximize recovery, reuse, and recycling."
The National Recovery and Resilience Plan (PNRR) outlines two general objectives regarding the circular economy:
- Making the recycling supply chain efficient through interventions to enable the recovery of secondary raw materials.
- Reducing the use of primary raw materials in which the country is deficient, progressively replacing them with secondary raw materials.
The resources directly allocated to the circular economy in Mission 2 (Green Revolution and Ecological Transition) Component 1 (Circular Economy and Sustainable Agriculture) amount to 2.1 billion euros.
Transition 4.0 Plan
Promoting ecological transition and the development of the circular economy is one of the objectives of the Transition 4.0 Plan, which constitutes the main line of intervention for industrial policy within the PNRR.
Compared to the previous Industry 4.0 Plan, the new plan is more oriented towards sustainability and green investments. Additionally, the incentivization methods have been modified, shifting from super-depreciation and hyper-amortization to tax credits that provide faster timelines and a broader range of utilization, including by SMEs.
The "Sostegni ter" Decree, approved by the Government in January 2022, has also raised the limit of eligible costs for obtaining tax credits to 50 million euros when the interventions are aimed at achieving ecological transition objectives.
Activities "for the transformation of business processes according to the principles of the circular economy" eligible for Transition 4.0 tax incentives are listed in the Ministry of Economic Development (MISE) Decree of May 26, 2020. These include eco-design, product durability and repairability, industrial symbiosis, reuse and recycling, disassembly and remanufacturing technologies, material recovery, the production of high-quality secondary raw materials, and product-as-a-service.
- Ecodesign refers to the design of sustainable products that last longer and are designed for reuse, repair, or upgrading to recover their functions, or subjected to high-quality recycling processes to reduce the environmental impact of products throughout their lifecycle.
- Industrial symbiosis involves exploiting synergies among industrial systems within the same economic and territorial scope, characterized by interdependencies related to resources (by-products, waste, waste heat, integrated water cycles).
- Intelligent disassembly and/or remanufacturing technologies and processes regenerate and update post-use component functions, extending the component's utilization cycle with environmentally friendly solutions.
Other Support Measures for Businesses
In addition to the Transition 4.0 Plan, there are other measures and provisions that can contribute to the development of innovative processes based on circular economy principles.
Sustainable Growth Fund
The Sustainable Growth Fund is intended for financing programs and initiatives for innovation and competitiveness in the production system, in the form of subsidized financing. These initiatives are implemented through calls for proposals by the Ministry of Economic Development. Support is available to companies of any size engaged in industrial, agro-industrial, artisanal, industrial service, and research center activities.
Eligible Project Categories Include:
- Product and process innovations related to efficient resource use and waste treatment and transformation.
- Design and prototypical experimentation of integrated technological models aimed at strengthening industrial symbiosis pathways.
- Systems, tools, and technologies for the supply, rational use, and sanitation of water.
- Innovative technological tools capable of extending the product lifecycle.
- New smart packaging solutions that incorporate the use of recycled materials.
Industrial Investments under the Green New Deal
The decree issued by MISE on December 1, 2021, provides financial incentives and non-repayable grants to support industrial investments aimed at implementing research, development, and innovation projects for ecological and circular transition consistent with the objectives of the "Italian Green New Deal."
The available resources amount to 750 million euros, allocated from the Sustainable Growth Fund (FCS) and the revolving fund for supporting business and research investments (FRI), managed by Cassa Depositi e Prestiti.
Incentives can be sought by companies of any size engaged in industrial, agro-industrial, artisanal, industrial service, and research center activities that present projects – including joint projects – for industrial research and experimental development aimed at creating new products, processes, services, or significantly improving existing ones, with a focus on decarbonization of the economy, circular economy, reduction of plastic use and replacement with alternative materials, urban regeneration, sustainable tourism, and adaptation and mitigation of territorial risks related to climate change.
Source: 4th Report on the Circular Economy in Italy