Orrick, Herrington & Sutcliffe LLP

[co-authors: Costanza Scarascia Mugnozza, Maria Concetta Molica]*

With the goal to deploy the full potential of the newly approved National Recovery and Resilience Plan (the “PNRR”), on 28 May 2021, the Italian Government approved the Law Decree no. 77 of 31 May 2021, so called “Semplificazioni bis” (i.e. Simplification – the “Decree”). Now, both Chambers of the Italian Parliament, Representative and Senate, shall convert the Decree into Law within 60 days.

The Decree aims at simplifying and speeding up the administrative procedures, a crucial challenge for the full implementation of the goals included in the PNRR, especially the “Green Revolution and Ecological Transition” (i.e. Mission 2 of the PNRR).

It should be first noted that the Decree is composed by two main parts: Part I headed “Governance of the PNRR” (i.e. Arts. 1 - 11), and Part II headed “Rules for accelerating and simplifying procedures and strengthening administrative capacity” (Arts. 17 – 67). In particular, the latter part includes, inter alia:

Title I - Ecological Transition and Acceleration of Environmental and Landscape Procedures (Arts. 17-37);

Chapter I - Environmental Impact Assessment (“EIA”) of State Competence (Arts. 17-22);

Chapter II – EIA of Regional Competence (Arts. 23-24);

Chapter III - Competence in EIA, Monitoring and Environmental Consultation (Arts. 25-27);

Chapter IV - Strategic Environmental Assessment (Art. 28);

Chapter V - Landscape Matters Provisions (Art. 29);

Chapter VI - Acceleration of Procedures for Renewable Sources (Arts. 30-32);

It is worth also mentioning Title IV on “Public Procurement” (Arts. 47-56) and Title VI on the “Modifications to the Law of 7 August 1990 no. 241” (i.e the Law on the Administrative procedure) (Arts. 61-63).

TITLE I – CHAPTER I

Focusing on the main Articles introduced by the new Decree, it is worth mentioning Article 17 that sets up a new PNRR – PNIEC Technical Committee (“PNRR - PNIEC Technical Committee”). The Decree provides that the members of the Committee will be appointed within 60 days from the entry into force of the Decree.

Moreover, in such context, it should be mentioned Article 18, which modifies article 7-bis of the Legislative Decree no. 152/2006 (“Italian Environmental Code”). Indeed, such Article 18 introduces the Annex I-bis which identifies those strategic projects for the energy transition, included in the PNRR and crucial for meeting the goals of the PNIEC, as projects of public interest, irreversible and urgent. The aim is to ensure a faster procedure for such projects under the responsibility of the PNRR – PNIEC Technical Committee. Annex I-bis lists, inter alia, hydroelectric, geothermal, wind and photovoltaic plants (on onshore and offshore); plants for the production of energy from the sea and plants for the production of bioenergy from solid biomass, bioliquids, biogas, residues and waste.

Furthermore, it is worth stressing that Article 17, paragraph 2, amends Article 8, paragraph 2-bis, of the Italian Environmental Code. Such Article provides that projects that are subject to national EIA procedure which are (i) included in the PNRR, (ii) financed with the complementary fund and (iii) those listed under Annex I-bis introduced by Article 18 of the Decree (the “PNRR - PNIEC Technical Committee Projects”) fall within the competence of the new PNRR -PNIEC Technical Committee. Therefore, according to what set forth above, since photovoltaic plants as well as wind plants are listed in the Annex I-bis, photovoltaic and wind plants that are of national competence fall under the assessment of the PNRR - PNIEC Technical Committee.

Hence, wind plants with a capacity above 30 MW and, in light of a specific provision of the new Decree (i.e. Article 31, paragraph 6), photovoltaic plants with a capacity above 10 MW undergo the EIA and are under the responsibility of the mentioned Technical Committee.

The new Decree's EIA provisions immediately became object of lively debate.

In particular, in relation to photovoltaic plants above 10 MW (previously subject only to the verification of eligibility to EIA, the “Screening”), for the new economic initiatives, it is questionable that the immediate applicability of the EIA procedure is limited by the timing for the appointment of the PNRR - PNIEC Technical Committee (i.e. 60 days from the entry into force of the new Decree). Indeed, this appears not to be in line with the aims of speed and simplification of the new Decree.

Concerning procedures already undertaken (i.e. Screening, or, in most cases, PAUR procedures), due to the lack of a transitional rule, it is not clear if such procedures will fall under the scope of application of the EIA or it is to be expected that (likewise the previous Law Decree no. 76/2020, the so called “Decreto Semplificazioni I”) the new regulation will apply only to authorization procedure undertaken after the entry into force of the conversion law of the new Decree.

Therefore, there is a real risk of stall both with respect to the new procedures and - and above all - with respect to the authorization procedures initiated before the entry into force of the new Decree.

It would be appropriate and highly desirable that such issues are addressed by the legislator through the conversion law.

For what concerns the EIA procedure, Article 20, inter alia, sets specific deadlines for the adoption of the EIA decision: i) with respect to the PNRR- PNIEC Technical Committee Projects, the PNRR-PNIEC-Technical Committee shall decide within 30 days from the conclusion of the public consultation pursuant to Article 24 of the Environmental Code which gives the opportunity to those who have interests to raise issues and remarks on the project. In any case, the Commission shall decide within 130 days from the publication of the documentation necessary for requiring the EIA procedure and listed in Article 23. Within the following 30 days, the General Director of the Ministry for Ecological Transition shall adopt the EIA decision after acquiring the agreement of the General Director of the Ministry of Culture within 20 days ii) for the other projects that fall within the competence of the State, within the term of 60 days from the conclusion of the public consultation pursuant to mentioned Article 24 of the Environmental Code, the competent authority adopts the EIA decision after acquiring the agreement of the General Director of the Ministry of Culture within 30 days. If it is necessary to carry out assessments of complexity, the competent authority, through a reasoned decision, provides the extension of the EIA procedure up to a maximum of 30 days. The competent authority will timely notice the proposer the reasons of the extensions and the deadline within the final measure will be issued.

In case of inactivity before the conclusion of the procedure by the PNRR-PNIEC-Technical Committee, the subject entitled to substitute powers after the acquisition of the ISPRA’s opinion within 30 days, provides for the adoption of the omitted measure within the following thirty days.

Moreover, in case of inactivity of the General Director of the Ministry of Ecological Transition, before the conclusion of the procedure by the Committee, or in case of delay of the competent General Director of the MiBACT participating to the procedure, the subject entitled to substitute powers provides for the adoption of the measure within its competence in the following thirty days.

TITLE I – CHAPTER II

One of the main reforms, introduced by the Decree, regards the “Sole Regional Authorization” (“provvedimento autorizzatorio unico regionale” – “PAUR”) legal framework. Indeed, Article 23 of theDecree introduces a new Article (Article 26-bis) to the Italian Environmental Code. The main purpose of reform is to accelerate the issuance of the PAUR by introducing a preliminary stage through a preliminary steering committee (Article 14, paragraph 3, of the Law no. 241/1990).

The mentioned steering committee is functional to define the contents of the Environmental Impact Studies and to identify all the necessary conditions for the construction and operation of the plant. Indeed, at the end of the preliminary steering committee emerges a clear definition of the conditions and responsibilities of each administrative authorities. Therefore, under the steering committee, each proposer will be able to elaborate a duly environmental impact studies compliant to the main features, location, and dimension of the project of the plant. It is worth noting that each entities and administrative authorities involved in the procedure will be able to have a preliminary knowledge of the project. Hence, the examination phase carried out by each administration, along with the PAUR procedure, will be faster.

Finally, the last paragraph of the Article 26-bis provides the possibility to reduce the duration of the PAUR procedure. In fact, in case of an agreement between all the administrative authorities and entities involved in the procedure, after the preliminary steering committee, they can decide to halve the terms of the decisional steering committee pursuant to Article 27-bis, paragraph 7, of the Italian Environmental Code.

Moreover, it should be stressed that the PAUR legal framework has been amended also by Article 24 of the Decree. Indeed, such Article by modifying Article 27-bis of the Italian Environmental Code ensures a greater involvement of the “public subject” (“pubblico interessato”) in the PAUR procedure. In fact, inter alia, now the public subject can raise any remarks related to the urban planning variation as well as to the environmental strategic assessment.

Finally, Article 24 introduces the following procedure:

  • if the regulations, for the issuance of one or more authorization titles, requires an executive project or
  • if the implementation of the plant requires verifications, re-examinations, or authorizations after the realization of the work itself

during the steering committee, the competent administration indicates the conditions to be verified for the issuance of the authorization title. The conditions justifying the issuance of the PAUR, indicated within the steering committee, can therefore be reasonably modified, or integrated only in the presence of significant elements emerged during the subsequent procedure for the issuance of the authorization.

TITLE II - CHAPTER III

It is worth noting that Article 25 of the Decree introduces the possibility to request to the Ministry of Ecological Transition to define the competence in specific cases.

In fact, in the case of works or interventions involving elements corresponding to different types of works subject to EIA or Screening falling partly within the competence of the State and partly in the regional one, the applicant shall send in electronic format to the Ministry of Ecological Transition and to the interested Region or Autonomous Province a communication containing:

a) object/title of the proposed project or intervention;

b) project typology identified as the main one;

c) other type of projects involved;

d) authority (state or region/autonomous province) that he identifies as the competent authority to carry out the EIA procedure or Screening.

Within 30days from the receipt of the communication, the Region or Autonomous Province has the right to transmit assessments of competence to the Ministry, at the same time informing the applicant.

The following 30days, the competent office of the Ministry communicates to the applicant and to the Region or Autonomous Province the determination on the competent authority, to which the applicant himself will have to submit the application for the start of the procedure.

Once this term has elapsed, the approval of the Ministry is considered to have been acquired on the position formulated by the Region or Autonomous Province or, in the absence of it, by the applicant.

Finally, if in the EIA procedures of national competence, the competent authority coincides with the authority that authorizes the project, the EIA is issued by the competent authority within the authorization procedure.

TITLE I – CHAPTER IV

Chapter IV of the Decree aims at ensuring an acceleration of the procedures for renewable sources. It is important to focus the analysis on the following Articles.

Article 30 introduces paragraph 3-bis to Article 12 of Legislative Decree no. 387/2003. Such paragraph requires the Ministry of Culture (“MiBACT”) to participate in the “Sole Authorization Procedure” (“AU”) involving projects concerning plants powered by renewable sources. However, in case the plant will be located outside (even if nearby) areas falling under the protection of the Legislative Decree no. 42/2004 the opinion expressed by the MiBACT is non-binding. Whether any opinion is expressed by MiBACT within the applicable terms, then the competent administration shall in any case proceed with the request for the authorization title. In any case, for plants of such (located outside protected areas) the MiBACT cannot undertake the objection procedure pursuant to Article 14-quinquies of Law no. 241/1990.

The aim of Article 30 is clearly to overcome the stall caused by the frequent and long-lasting objection procedures undertaken by the MiBACT, especially for those projects implemented in the Lazio Region. Indeed, the latter, slowed down the development and construction of photovoltaic plants to be located outside landscape protected areas. However, the introduction of a mandatory opinion of the MiBACT for projects located nearby (but not within) protected areas, , may burden the authorization procedure causing further slowdown.

It is worth noting that the low number of participants to the GSE auctions due to the difficulties to obtain duly authorization titles along with the purpose to reach the “2030 Goals”, have led the Italian government to introduce Article 31 whose main purpose is to simplify the storage and photovoltaic plants.

Indeed, the “stand-alone” electrochemical storage plants usually have no environmental impact due to the fact they are usually located inside sheds. Therefore, the Law Decree establishes that they are no longer submitted to the EIA procedure. However, it is still required to obtain all the necessary authorizations for the construction of the sheds. Moreover, if the connection works require an EIA procedure, their construction would be included in this procedure as well.

Article 31 also amends the Law Decree no. 28 of 3 March 2011 by introducing the new paragraph 9-bis to Article 6 that regulates the “Simplified Authorized Procedure” (“PAS”) and “Communication of Commencement of Work Certified” (“CILA”). New paragraph 9-bis provides that photovoltaic plants with a capacity below 10 MW and located on industrial and commercial areas, are not subject to the Screening, if it is filed to the competent authority a declaration stating that the implementation of the plant does not fall within the areas considered worthy of greater protection under the Guidelines on Renewable Ministerial Decree of 10 September 2010.

However, it is not clear why the new Decree makes reference (only) to the exemption from the Screening of solar plants with a capacity below 10 MW and not (also) to the possibility to authorize these solar plants through the PAS procedure, as the integration of Article 6 of the Law Decree no. 28 of 3 March 2011 would suggest it, according to a systematic interpretation.

In addition, developers and associations have already highlighted that the exemption from the Screening should refer not only to plants to be located on industrial areas but also on areas which are considered suitable for having access to the incentives (e.g. disused quarries, former landfills and so on).

As mentioned, another important amendment introduced by Article 31, paragraph 6, concerns the submission to the national EIA for those photovoltaic plants with a capacity exceeding 10 MW (in respect to which see above).

Turning to agrovoltaic plants, Article 31 provides the possibility for such plants to benefit from incentive tariff. However, the new Decree explicitly refers to photovoltaic plants combined with cultivation activity, while farming activities seem to be excluded. Such exclusion can represent an important loss, considering what is the current development of agrovoltaic plants.

Moreover, the solution adopted by Article 31 that requires “integrative solutions with vertical assembly of the modules” may raise issues under the technical point of view as it could impair the “efficiency objective”.

It is worth also mentioning that Article 31 replaced the table A attached to the Legislative Decree no. 387 of 29 December 2003 with the following one. Such table sets the new benchmarks necessary for identifying the authorization procedures that shall be applied to each case. However, the reforms can be considered as “late” since so far most of Regions have already set benchmark until 1 MW for the PAS procedure.

SOURCE

THRESHOLD

WTG

60 kWp

PHOTOVOLTAIC

50 kWp

HYDRAULIC

100 kWp

BIOMASS

200 kWp

WASTE GASES, RESIDUES FROM PURIFICATION PROCESSES AND BIOGAS

250 kWp

Regarding Article 32 of the mentioned Decree, it modifies the regulation provided for the repowering procedure. More in particular, new Decree modifies Article 5 of the Legislative Decree no. 28/2011 by introducing, inter alia, the possibility of using a CILA for not substantial interventions that fall within the cases below:

  • interventions on photovoltaic and hydroelectric projects and plants which do not cause changes in the (i) physical dimensions of the equipment (ii) the volume of the structures (iii) the areas involved in the plants and their related works, regardless of the resulting capacity following the intervention. However, where provided, procedures for verifying compatibility and assessing environmental impact pursuant to the Italian Environmental Code still apply;
  • interventions on wind projects, plants and the related works carried out in the same areas of the wind plants which cause a minimum reduction in the number of the wind turbines compared to those already authorized and installed, regardless of the resulting capacity following the intervention. The Decree set out specific length and height requirements to which turbines shall comply beside other spatial criteria for identifying the area involved in the plant.

Therefore, without prejudice to Article 6 (PAS) and Article 6-bis of the Legislative Decree no. 28/2011, which have remained substantially unchanged, if the intervention does not involve any modification of the volume of the facilities as well as of the area involved in the Plant, it is possible to apply the CILA.

However, it is not clear why for CILA interventions the new Decree recalls the Screening and EIA (therefore, taking also into account that, at the time of the intervention, the area of the plant has not become unsuitable for the construction of the plants or new constraints have not been imposed), while for “Declaration of Commencement of Work Certified” (“DILA”) interventions (which allows more impacting works such as increase of the volumes and the heights within certain limits) Screening and EIA procedure are expressly excluded.

In any case, the legal framework outlined above shall be coordinated with Article 4, paragraph 6-bis of the Legislative Decree no. 28/2011, which a states as “general principle” that those projects that modify plants and that involve (i) full reconstructions, (ii) renovations, (iii) repowering and (iv) revamping require a EIA only in relation to the variations, therefore the applicable threshold for the Screening or EIA should be referred to the variation only (taking into account, in any case possible environmental constraints meanwhile imposed on the relevant areas).

In any case, such issue will be likely addressed and explained more in-depth in the forthcoming time by the legislator.

TITLE VI – AMENDMENTS TO THE LAW NO. 241/1990

It is crucial also to mention the amendments to the Law no. 241/1990 on the administrative proceeding made by the new Decree.

Article 61 which aims at strengthening substitute powers, amends paragraphs 9-bis and 9-ter of Article 2 of Law no. 241/1990.

According to the mentioned Article, in case of inactivity of the administration, the Governing Entity has now the faculty to attribute the substitutive power either to an organizational unit or to a leading administration subject. This provision, compared to the previous one, allows the Administration to choose to attribute the substitutive power also to an organizational unit.

Article 62 of the Decree amends Article 20 of the Law no. 241/1990. In particular, it enshrines that in cases where the silence of the administration is equivalent to a measure of acceptance, under the request of the individual, the administration must issue electronically a certificate acknowledging the “silence-consent” (i.e. “silenzio-assenso”) within 10 days from the request. However, if the administration does not issue the mentioned certificate within the deadline, the certificate is replaced by a declaration of the private in accordance with Article 47 of Presidential Decree no. 445/2001.

Another important reform that it is worth mentioning, it is the new time limit for administration to exercise the self- redress power.

Indeed, pursuant to Article 21-nonies of the Law no. 241/1990, as amended by Article 63 of the new Decree, the administration can exercise the self-redress power within 12 months – and not anymore 18 months. As it is known, the Law Decree no. 76/2020 (“Decreto Semplificazioni I”, converted into Law no. 120/2020) stated the applicability to the inspection power of the GSE of the time limits set out by Article 21-nonies of Law no. 241/1990 (i.e. 18 months). This provision has caused various case-law debates regarding the application of this term, especially regarding the issue of whether this term was retroactive or not. Eventually, the case law stated that the date after the entry into force of the “Decreto Semplificazioni I” (17 July 2020) is the starting date for application of the provisions related to the GSE inspection powers. At this point, as the Decree has directly amended Article 21-nonies, it would be reasonable to think that the 12-months term could be also applied as a time limit to GSE inspections since the date after the entry into force of the “Decreto Semplificazioni I” (17 July 2020).

In any case, the conversion law along with case law will hopefully clarify the interpretation and application of this provision.

* * *

In conclusion, some progress has certainly been made for simplifying and making faster the administrative procedure for the construction and the repowering of renewable energy plants. However, several issues still need to be addressed and it is desirable that the Italian Government will take the chance to do so in the upcoming conversion law of the Decree.

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