Italy profile

Overview

Final energy consumption climate corrected in 2023 was 107.6 Mtoe, -1.9% compared with 2022 and -0.9%/year since pre-COVID-19 pandemic 2019. Transport sector was the largest consuming sector over 2010-2023, except 2019. In 2023, the transport sector absorbed 35% of total final energy consumption (+3 percentage points since 2010). In 2023, energy consumption in residential sector decreased by 7.4% compared with 2022: the share reduced by 2 percentage points since 2010. Services sector grew by 4% in 2023. Buildings represent 40% of total final energy consumption in 2023 (-1 percentage points since 2010). The share of industry decreased from 24% in 2010 to 22% in 2023 (-5.4 Mtoe).

Energy efficiency of final consumers, as measured by ODEX, improved by 22% over 2000-2023 (1.1%/year). Efficiency improvements have been faster over 2010-2018 (1.4%/year) than since 2019 (0.8%/year). The highest progress in energy efficiency was achieved by industry: 1.6%/year since 2000, faster over 2004-2012 (2.6%/year). The transport sector improved by 23% over 2000-2023, it showed rapid improvements over 2013-2018 (3.0%/year) due to an increase in passenger traffic that was greater than energy consumption, and slow progress after 2018 (0.6%/year). The residential sector had slower energy efficiency progress since 2015 (0.8%/year) compared with the period 2010-2015 (1.7%/year).

Cumulated annual energy savings in 2023 were 28.7 Mtoe since 2000. Industry was the largest contributor with 11.6 Mtoe in 2023 (41%), followed by transport sector with 9.2 Mtoe (32%), by residential sector with 6.2 Mtoe (22%) and services sector with 1.6 Mtoe (6%). Over 2009-2017 annual additional savings have increased significantly.

Total energy supply decreased by 37 Mtoe from 2010 to 2023 (-22%). The drop was due to all its components: in particular, final consumption decreased by 18 Mtoe, consumption of power sector by 9 Mtoe, other transformation by 6 Mtoe and non-energy uses by 5 Mtoe. The largest contributor to this reduction is the final consumption, which accounts for almost 50% of the total decrease in primary energy consumption. The decrease by net consumption of the power sector is mainly due to change in power mix (-5 Mtoe) and efficiency of thermal power plants (-4 Mtoe).

Final energy consumption decreased from 123 Mtoe in 2010 to 105 Mtoe in 2023. The drop of 18 Mtoe was principally due to energy savings that reduced the final energy consumption by 17 Mtoe. The activity raised final consumption of 3 Mtoe counterbalanced by structural changes in branches (-3 Mtoe). Climate effect cut energy consumption by 6 Mtoe counterbalanced by other effects for 5 Mtoe.

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

Energy consumption of building (with climatic corrections) was 43.4 Mtoe in 2023, -4% compared with 2022. Consumption raised significantly at +3%/year over 2000-2008 (50,5 Mtoe in 2008): this growth was mainly due to services sector (+5%/year). Building consumption decreased since 2018 (-3%/year): residential buildings contributed more than other buildings. Residential buildings accounts for approximately 65% of final energy consumption in 2023. 

Energy consumption of households (with climatic corrections) decreased since 2010 at -1.2%/year. All end-uses reduced consumption: space heating at -0.9%/year, water heating at -3.1%/year, cooking at -0.5%/year and electrical appliances and lighting at -1.7%/year. Air-conditioning increased at 5.2%/year but it’s only 2% of consumption. The structure of consumption by end–use is quite stable: space heating accounts approximately 70% of consumption.

The households energy consumption per m2 for space heating (with climatic corrections) has reduced by 1.5%/year since 2008 from 10 koe/m2 to 8.0 koe/m2 in 2023. Since 2021 the decrease is faster, 7%/year. The reduction is probably due to the mild climate and to the change to a more efficient heating system.

Energy consumption per dwelling decreased from 0.45 toe/dw to 0.34 toe/dw over 2010-2023 (-2.1%/year). Consumption reduced for all end-uses, except air-conditioning: -3.6%/year for water heating, -2.2%/year for electrical appliances, -1.0%/year for cooking since 2010. In 2023 electrical appliances absorbed 38% of consumption (stable from 2010), water heating 32% (-6 percentage points), cooking 24% (+3 points) and air-conditioning 6% (+3 points).

Over 2010-2023 electricity consumption per dwelling (with climatic corrections) decreased by 12% from 2626 kWh/dw to 2310 kWh/dw at -1.0%/year. Electricity is mainly used for electrical appliances and lighting but the share is decreasing: the share reduced by 11 percentage points from 2010 (76%) to 2023 (65%). On the other hand, thermal uses and air conditioning are increasing: in 2023 thermal uses accounted for 25% (6 percentage points increase since 2010) and air conditioning for 11% (+6 percentage points).

Energy consumption of households decreased by 8.7 Mtoe over 2010-2023. Main drivers of this reduction are energy savings (-5.2 Mtoe), climate effect (-4 Mtoe) and large homes (-0.5 Mtoe). More dwellings and more appliances per dwelling contributed to increasing energy consumption by 2.2 Mtoe and 1.3 Mtoe, respectively. The other effects also reduced the energy consumption by 2.4 Mtoe.

Energy consumption for space heating reduced by 6.4 Mtoe from 2010 to 2023. The main drivers of this decrease are energy savings (-2.4 Mtoe) and climate effect (-4 Mtoe), followed by other effects (-2 Mtoe) and larger homes (-0.3 Mtoe). These reductions are counterbalanced by more dwellings (+1.5 Mtoe) and the penetration of central heating (+0.9 Mtoe).

Energy consumption per employee in services reduced by 1.4%/year since 2008 with positive peak in 2018 (+6.5%) due to ambient heat counting and negative peak in 2020 (-6.6%) due to COVID-19 pandemic. The decreasing trend depends on decrease in energy consumption and growth in employment. Electricity consumption per employee grew until 2012 (+3%/year) and then stabilized around 5,400 kWh/emp. 

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. In 2024 energy savings from tax deductions for buildings amounted to 2.5 Mtoe/year of final energy.

Transport

The transport sector’s energy use declined by 3% from 2010 to 36.9 Mtep in 2023. Cars and road freight remained dominant (52% and 35%, respectively). Maritime transport’s role diminished (–2 pp), while air transport expanded (+2 pp), and other modes showed little change.

The share of passenger traffic by car was 83% in 2023, followed by bus with 10% and rail with 7%. The share of cars grew by 1 percentage points since 2010 as that of rail while the share of bus decreased by 2 percentage points from 2010.

The share of freight transport by road was 88% in 2023, 3 percentage points decrease since 2010, while the share of rail transport increased by 3 points since 2010 to 12% in 2023. The share of water transport was negligible.

Energy consumption of cars per passenger-km decreased by 12% over 2000-2023. After a rapid decrease between 2010 and 2017, the indicator increased to reach its 2010 level in 2023, with 0.028 koe/pkm.

The energy consumption in transport reduced by 1.3 Mtoe from 2010 to 2023. The main drivers of this reduction are energy savings (-6.1 Mtoe) partially counterbalanced by other effects (+4.9 Mtoe), mainly low load factor in passenger and goods traffic. Activity (0.3 Mtoe) and modal shift (-0.3 Mtoe) contributed slightly to the energy consumption variation between 2010 and 2023.

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 2024 energy savings amounted to 3.7 Mtoe/year of final energy.

Industry

Between 2000 and 2023, industrial energy consumption declined from 36.9 Mtoe to 23.4 Mtoe, reflecting an average annual reduction of 2%. The most pronounced decrease occurred during 2004–2014, with consumption falling at an average annual rate of 4%.The drop was different across the different industrial branches: it decreased by 2.6%/year in non-metallic minerals, -2.3%/year in chemicals, -1.6%/year in steel and -0.9%/year in paper.

The unit consumption of steel decreased by 1.1%/year over the period 2000-2023: some fluctuations were observed due to non-used production capacity and the economic crisis. The unit consumption of cement reduced by 1.2%/year: it remains quite stable over the period 2007-2014. The unit consumption of paper is at 2000 levels.

In 2023, industry consumed 5.4 Mtoe energy less than in 2010 (-18.9%). This decrease was mainly driven by energy savings (-4.2 Mtoe), by structural changes towards less intensive branches (-2.9 Mtoe) and by a reduction in industrial activity (-1.4 Mtoe). Other effects, mainly non-used production capacity, increased the energy consumption by 3 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.