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Fuel economy in Italy

Part of Global Fuel Economy Initiative 2021

With close to 2.1 million light-duty vehicles (LDVs) sold in Italy in 2019, LDV sales were 3% below 2017 levels. Italy in 2017 had an average fuel consumption for new LDVs that was lower than France, Ireland and the Netherlands. However, with an average fuel consumption of 5.7 litres of gasoline equivalent per 100 kilometres in 2019, fuel consumption levels in Italy surpassed those LDV markets. Nevertheless, average fuel consumption of new LDVs in Italy was 20% below the global average in 2019.

Fuel consumption of new LDVs decreased 0.7% per year on average between 2005 and 2019 in Italy, despite steady fuel economy improvements between 2010 and 2017, when fuel consumption fell on average 3% annually. However, between 2017 and 2019, fuel consumption increased by 5% per year. One contributing factor is a growing share of SUVs/pick-up trucks, which expanded from a sales share of 6% in 2005 to 40% in 2019. As a result, the average weight of LDVs grew 8% between 2005 and 2019, though is still 10% below the global average. Another factor contributing to this recent increase in fuel consumption is a sharp decrease in diesel LDV sales shares across all vehicle segments since 2017.

While the share of diesel LDVs in Italy is far above the global average, sales shares have decreased from 62% in 2005 to 45% in 2019. Throughout this time, the sales share of gasoline LDVs has expanded, along with a growing market for hybrid, plug-in and electric vehicles. In 2019, hybrid LDVs had a sales share of 4.0% followed by electric vehicles at 0.6% and plug- in vehicles at 0.3%. Italy is one of few countries with a significant sales share of compressed natural gas (2.2%) and liquefied petroleum gas (6.6%) vehicles in 2019.

Voluntary carbon dioxide (CO2) emissions standards were first introduced in the European Union in 1998 and became mandatory in 2009. Corporate average CO2 emissions standards for the period 2015-19 were set at 130 g CO2/km for passenger cars and 175 g CO2/km for light commercial vehicles, while emissions standards for 2020-2024 were set at 95 g CO₂/km for passenger cars and 147 g CO₂/km for light commercial vehicles. Under the “Fit for 55” initiative, Italy will be required to meet new targets including a 55% reduction in emissions of passenger cars in 2030 compared to 2021 and a 2035 target that effectively requires all new light-duty vehicles to have zero tailpipe CO2 emissions.

Italy introduced a programme to promote CNG and LPG in the transport sector in 2003, along with purchase incentives and scrappage bonuses for CNG and LPG cars in 2009. In 2014, Italy became the first EU member state to mandate the use of advanced biofuels. Starting in 2018, gasoline and diesel must contain 1.2% advanced biofuel, reaching 1.6% in 2020, and 2% in 2022. Under a new amendment to the 2019 budget, Italy introduced a Bonus-malus scheme. A one-off subsidy ranging from EUR 4 000 to 6 000 is available for vehicles purchased between 2019 and 2021, emitting under 20g CO2/km or less. A tax of up to EUR 2 500 is enforced for vehicles emitting more than 250g CO2/km.

To further encourage the uptake of fuel efficient powertrains in Italy, electric vehicles are exempt from annual ownership tax for a period of five years, after which taxes are reduced by 75%. A tax credit is also granted to taxpayers who install charging infrastructure up to 22 kW.