Investments in New Recycling Technologies in Italy Are Increasing, but Regulatory Contradictions Must Be Overcome

In Italy, the waste sector is now in a phase of maturity, with stable growth and a consolidated ability to attract investments (an average of 16% per year between 2017 and 2022).

However, obstacles to the growth of the industry in Italy persist due to a legislative framework that creates uncertainty and discourages investments and that is characterized by contradictions in the distribution of competences between the State, Regions and Authorities, by the uncertain definition of the perimeter of ARERA regulation and by the slowness of the legislation in incorporating market innovations.

These are just some of the findings that emerged from the report of the Observatory on the Recycling and Waste Industry of Agici, present in Rimini as part of Ecomondo, the international fair dedicated to the green economy and the circular economy. However, the analysis also highlighted how in recent years there has been a trend to invest in new recycling technologies in Italy, linked to the growing interest of the financial world, which is investing in the waste sector also driven by the demand for green investments with a focus on ESG objectives.

Taking into account all types of facilities, from storage to treatment, recycling, waste-to-energy and landfill, in 2022 there were 9,406 active waste management plants in Italy, mostly small: 62% of the total, in fact, is smaller than 50,000 tons per year. 94% of the plants are owned by private companies, mostly small (85% have a turnover of less than 25 million euros) and which own few plants (81% own only one plant).

In this context there is room for market aggregation in Italys: focusing on a limited sample, the study analyzed the strategies of 38 companies, active in 6 distinct supply chains with different degrees of market maturity. The analysis highlighted a growth trend between 2017 and 2022 both for turnover (10 billion euros in 2022) and for investments (1.2 billion euros in 2022).

Furthermore, 219 operations were mapped between 2017 and 2024 that show a trend towards aggregations and investments in new recycling technologies in Italy. This is made possible by the growing interest of the financial world, which is investing in the waste sector also driven by the demand for green investments with a focus on ESG objectives .

This growth trend must be supported by removing some regulatory contradictions that create uncertainty and discourage investments in Italy

The report presented today suggests a complete rethinking of waste legislation, building a simple and stable framework over time with an increasing role for regulatory and market authorities. Furthermore, the paradigm of public support for the recycling industry must be overturned: no longer a distorting system based on direct incentives for recycling output, but an indirect stimulus based on the growth in demand for secondary raw materials.

“The Italian waste management supply chain is undergoing a gradual transformation, favoring all the conditions necessary to aggregate skills, market shares, but above all capital,” declared Marco Carta, Director of the Observatory on the Recycling and Waste Industry of Agici.

“The main obstacles are still the strong contradictions in the attribution of skills between the State and Regions and Authorities. Operators are able to produce innovation and recycle new materials, but it is necessary to create the conditions for further growth. In such a context, the watchword is to simplify, first and foremost the regulations and skills, to facilitate and support the market.”

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(Featured image by Shirley810 via Pixabay)

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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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