Public funding for Italian industry targets innovation, digitalisation, decarbonisation and sustainability

Financing the European Industrial Renaissance: Italy's blend of tradition and innovation

Crafting the industry of tomorrow

Italy stands at the forefront of the EU's industrial renaissance, championing a blend of technological innovation, sustainability, and strategic investment. Focusing both on enabling a transformation of existing businesses - through innovation, sustainability investments, or digitalisation - as well as attracting foreign investment in strategic value chains, Italy is building a resilient, high-tech economy that stands as a model for other European nations.

The Italian government's vision for its industry has recently been captured in its new industrial strategy to support the country in reshaping its economic landscape and positioning itself as a leader in Europe's reindustrialisation efforts, in line with the mandate of the next European Commission and in close coordination with EU policies.

How can your business benefit from the new industrial plan and funding opportunities?

• Instruments such as tax incentives, loans, and grants for companies to support the adoption and investments in digital technologies and sustainable practices.
  
• Incentives dedicated to Special Economic Zones in southern regions such as Abruzzo, Basilicata, Calabria, Campania, Molise, Apulia, Sardinia, and Sicily to boost economic development, exports, and job creation.
  
• Comprehensive EU and National Support: Businesses are supported under more than 58 Operational Programmes, managed at national or regional levels. Additionally, various national, regional, and local incentives, subsidies, and grants are available to support Italy's transformation and strengthen its innovation ecosystem.
  
• Strategic support for large-scale investments under the Important Projects of Common European Interest Fund and the Development Contracts, with a combined budget of more than €10 billion.
  

Supporting existing business: innovate, decarbonise and digitalise

Italy is dedicated to supporting its traditional industries, like fashion and automotive, while pushing for sustainability and innovation across other key sectors, such as renewable energy, microelectronics, aerospace, chemicals, and pharmaceuticals. The country has rolled out a comprehensive set of financial incentives and tax benefits focused on Research & Development, Innovation, Sustainable Energy, and Digitalisation to ensure its industries stay competitive in a changing landscape.

Building on the success of the Transition 4.0 plan, the new Transition 5.0 plan is set to inject €6.3 billion in 2024-2025, primarily in the form of tax credits aimed at digital and green transformation. These incentives present an opportunity for companies to invest in critical digital assets like software, digital platforms, and AI applications, as well as renewable energy for self-consumption. To ensure these transformations are sustainable, the plan also includes funding for workforce training, providing companies with the skilled labour they need to grow.

Additionally, €220 million from the Sustainable Growth Fund is available to help businesses adopt circular economy principles, supporting innovations in resource efficiency and promoting production processes that minimise waste and enhance material recovery and recycling.

Attracting new businesses: funding opportunities at the heart of Italy's transformation 

Italy is also focused on attracting strategic investments into sectors crucial for economic stability and growth. To achieve this, the country has established an IPCEI (Important Projects of Common European Interest) Fund, valued at €3.2 billion, to support ground-breaking innovations in areas like batteries, microelectronics, hydrogen, cloud, and health and medical sectors. Over 30 companies have already benefited from Italian government support to drive critical innovations forward. As new IPCEI initiatives are launched at the EU level—including in digital, energy, biotechnology, and advanced materials—Italy is expected to continue its commitment to building European champions in these sectors.

To complement these efforts, Italy's strategic 'Development Contracts' program, managed by Invitalia, aims to support large-scale, strategic, and innovative industrial investment programs through subsidised loans, interest contributions, and grants. Although open to many sectors, dedicated funding has been set aside for priority areas such as batteries, automotive, semiconductors, and clean technologies. Recently, a new funding window opened with €350 million available to support large-scale investments (above €20 million) in energy efficiency and sustainable production processes. So far, more than €6 billion has been invested in 434 major projects across Italy.

Italy: a strategic opportunity for sustainable and competitive industry

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