Italy

[Last updated July 2024]

Key facts

CHEMICAL INDUSTRY SNAPSHOT

An important industry providing high qualified jobs

With a turnover of more than 66 billion Euros (excluding pharmaceuticals) generated in 2022 by more than 2,700 companies, Italy is the third European chemical producer. About 112,200 highly qualified employees work in the sector and an even greater number of indirect jobs, more than twice as much as through direct employment, is activated in the economic system leading to an overall count of more than 320 thousand jobs connected to the chemical industry. 

Strong and growing specialization in downstream chemicals

taly maintains a significant and strategic presence in basic chemicals, but it is relatively more specialized in specialties and consumer chemicals, accounting for slightly more than 60% of total production value, compared to 39,4% of European average and realizing an export surplus of €5.9 billion in 2022, about. In downstream chemicals scale economies are not so relevant; the key to success is rather the ability to provide customers with high-performance and tailor-made products such as auxiliaries and additives for industry, paints and adhesives, cosmetics and detergents. Italy is also leader in the fields of active pharmaceutical ingredients, with export quotas exceeding 85% of production, and in bio-based chemicals. 

A science-based industry operating in partnership with Italian Districts 

The Italian chemical industry supports the sustainability and competitiveness of virtually all other industrial sectors through its innovative products and solutions. Being a country with a strong and diversified industrial basis, Italy represents a large market for chemicals accounting for about €85 billion. In particular, there are about 150 Industrial Districts – including so-called traditional sectors but also medium-high technology ones – which are known around the world for their high quality and innovative products: their success very often relies on sophisticated chemical intermediates made in Italy and responding to specific requirements. 

Chemical companies have been strengthening significantly their commitment to research in Italy: R&D personnel has increased by 73% over the last decade 2011-2021 and exceeds 8.300 employees. R&D is fundamental also to pursue sustainability and circular economy. According to the Greenitaly report, in the period 2017-2021, 60% of chemical companies invested in environmentally friendly technologies and products, making the chemical industry, along with the rubber and plastics industry, the manufacturing sector that has invested the most in environmentally friendly solutions.

A well-balanced industry structure

The chemical industry in Italy is characterized by the well-balanced presence of three different actors, all of them playing a very important role: Italian SMEs (35% of total chemical production value), medium-large Italian groups (27%) and foreign-owned capital companies (38%). 

Main Italian chemical groups include some big players of basic chemicals but also several dynamic specialized players leading in their specific niche at European or world level. Most of them also have production units in foreign markets. Foreign capital companies have chosen Italian location not only to produce for domestic market, but also to export and for R&D. Chemical SMEs represent a significant reality and suffer particularly from regulatory burden. 

A high international attitude

Italian chemical companies are taking advantage of globalization by providing their international customers solutions according to the features developed for the domestic market: i.e. high-quality standards and innovation, customization, flexibility and just-in-time supply, even in small quantities of products. 

The chemical industry in Italy is highly integrated into global markets: more than 60% of production value refers to multinational companies, either domestic or foreign owned. Exports to turnover ratio has reached 65% and has been increasing by 28 percentage points in the last 20 years. Moreover, in recent years, export performance has proved to be one of the most successful among main European producers (+71% in 2012-2022, only behind Spain). 

Not only large firms, but also SMEs are strongly oriented to international markets. 

Lombardy: a real vocation for chemicals

talian chemical industry is concentrated in Northern Italy (77% of chemical employment), close to downstream European markets and local customer companies. In particular, Lombardy has a real vocation for chemicals: not only it represents 41% of Italian chemical employees, but it is among the top six chemical regions in Europe. Considering fine and specialty chemicals, Lombardy ranks even higher, second among European regions. 

Chemical industry in Lombardy has different features from other European regions with strong chemicals presence: production is not concentrated in a handful of highly integrated sites, but widespread across a network of foreign multinationals, Italian medium and large groups and local SMEs. These companies can benefit from the presence of major universities and research centres, able to develop industry-oriented projects. 

HOW ARE WE DOING?

Preparing the future

Strengths

• Strong interaction with Industrial Districts, i.e. SMEs belonging to the traditional and medium-high tech sectors of Made in Italy which are world trend setters, strongly oriented to innovation and always ready to test and develop new products. 
• Talents: large pool of high quality and motivated Italian chemists with particular skills in areas including catalysts, fluorine chemicals, woven and non-woven polyester, polyurethanes, special polymers, leather chemicals, adhesives, pharmaceuticals active ingredients and cleaning additives. 
• Widespread research-based innovation: in Europe Italy is second only to Germany for the number of chemical companies engaged in R&D, with more than 1,200 companies (both national and foreign-owned). In the chemical industry R&D personnel represents almost 8% of total employment compared to 5% in manufacturing average. 
• Constructive industrial relations: Italy’s chemical sector has a participatory and pragmatic industrial relations culture that supports innovation and often anticipates changes in regulation. The National Collective Labour Contract aims at improving productivity also through organizational and working hours flexibility. It favours company-level bargaining and enables temporary agreements amending national rules. It also favours employability, training and youth employment. The chemical and pharmaceutical industry has been the first sector in Italy to adopt supplementary pension and healthcare funds. According to a recent survey involving foreign capital companies’ top management, organisational flexibility is among the most important Italian strength in a rapidly moving environment. 
• Remarkable results in terms of environmental protection: all kind of emissions have experienced impressive reductions, in particular the chemical sector has reduced its direct GHG emissions (scope 1) by 59%, exceeding the new and ambitious target set by the New Green Deal for 2030 (-55% compared to 1990). 
• Safety: long experience and significant investments to promote safety for both employees (in the period 2019-2021, the chemical industry recorded one of the lowest amounts of occupational accidents per million hours worked among manufacturing sectors) and users. 

Challenges

• High sensitivity to energy cost gaps compared to competitors. 
• Logistics costs higher than in some other European countries. 
• Lack of industrial culture and of confidence in new technologies in some parts of Society and institutions. 
• Possible vulnerability to external shocks (rising protectionism and global tensions) in the procurement of raw materials. 
• Lengthy approval procedures with legal uncertainties representing an obstacle to the rapid development, adoption and dissemination of enabling technology solutions to promote circularity and sustainability throughout the economic system.

OUR CONTRIBUTION TO a COMPETITIVE europe

The set of incentive schemes and mechanisms supporting industrial innovation has been further strengthened, in order to enhance the competitiveness of Italian manufacturing base and its exporting potentialities, positively impacting the chemical sector, a science-based industry which represents a technology infrastructure and a solution provider for the different industrial value chains collectively recognized from abroad as “Made in Italy”. 

Financial resources assigned by the Recovery Plan to the Italian National Recovery and Resilience Plan (“PNRR”) have continued to sustain required investment needs expressed by Italian organizations. 

Fostering environmental sustainability and digital transformation 

To support the digital and energy transition process of Italian companies, with the publication of the Legislative Decree of 2 March 2024, n. 19 (“Further urgent provisions for the implementation of the PNRR”), the Transition Plan 5.0 has been adopted and launched. 

Companies that will invest in 2024 and 2025 in innovation projects and new tangible and intangible assets, instrumental to business operations and which can demonstrate to be interconnected to the company production management system or to the supply network while the company achieves an overall reduction in energy consumption, will be able to benefit from a tax credit proportional to the expenditure incurred for the implementations carried out (up to 45%). 

As part of the initiatives envisaged by Mission 4 of the PNRR headed by the Ministry of University and Research, 14 extended partnerships were created to support and fund research projects, innovation processes, technology transfer and joint-cooperation between companies focused on the low-carbon economy, resilience and adaptation to change or focused on the circular economy and in strategic areas. 

One of the extended partnership created, “Made in Italy Circular and Sustainable (MICS)”, participated by 25 subjects (including universities, companies and research centres), financially supports Fundamental Research and Industrial Research activities aimed at introducing and implementing innovative solutions and projects for circularity in relation to products, processes or services within three of the four key sectors belonging to Made in Italy (Fashion, Home Furnishing and Automation), as to leverage on sustainability and exploit digitalisation. 

White Certificates mechanism is another financial support scheme which incentivises energy efficiency projects implemented by industrial companies through the pivotal role assigned to energy distributors. Last year, the auction system of White Certificates managed by the Authority for Electrical Energy and Gas (“AEEG”) priced the tonnage of CO₂ actually saved at about 250 € each. 

Encouraging innovation and collaborations between public and private sectors 

Existing fiscal incentives supporting R&D investments by industry have been further optimized to efficiently support operating and sustainable performances and innovation as well as digital transformation of manufacturing industries.  

The Ministry of Business and Made in Italy (MIMIT) has also promoted the constitution of a Register for “Tax Credit Certifiers for Research & Development, innovation and design”, which has become operational from 21^st of February 2024, with the aim of simplify and standardize the procedures to monitor the launched incentive programmes, while guaranteeing the system of necessary administrative and technical verifications. 

The legislative restyling of Patent Box modified the benefit calculation methodology: the associated fiscal relief will be quantified through the increase of 110% of incurred R&D, technological innovation and design costs sustained to obtain intangible assets, to be recognized via the reduction of company’s overall tax burden (periodic fiscal compensation within yearly declarations of IRPEF/IRES and IRAP). 

Intangible assets subject to industrial property rights are: 

• copyrighted software 
• industrial patents 
• designs and models 

“Nuova Sabatini” is a fiscal instrument with the aim to facilitate companies’ access to credit and supporting investments to purchase or lease machinery, equipment, plant, capital goods for productive use and hardware, as well as software and digital technologies. It has been refunded in 2024 with an endowment of 100 million €. 

Fondimpresa, the largest inter-professional fund in Italy, will support in 2024 – with an endowment of 20 million € – the technological and digital training of adhering companies’ workers that are carrying out innovative projects possibly combining digital product and/or process innovation impacting sustainability. 

Other tax credits support innovative activities through the financial incentive available for the recruitment of young researchers and professional resources. 

Furthermore, PNRR introduced financing schemes supporting “innovative doctorates”, trying to better align and connect to the innovation needs of innovative companies and which promotes the recruitment of researchers by companies (the decree establishes 50% co-financing from the Ministry of Universities and Research and the interested company). The doctoral course takes place at universities, without prejudice to the periods of study and research that will be carried out at the company (for a minimum of 6 months to a maximum of 18) and abroad (for at least 6 months). For companies that co-finance 50% of innovative doctorates, a tax relief is provided in relation to the permanent hiring of PhD holders. Associated fiscal exemption will apply for 24 months, as from 1 January 2024 until 31 December 2026. 

During 2024 the Deposits’ & Loans’ Fund “CDP” will further expand the volume of funds to be made available for supporting the growth of Italian manufacturing industries and the implementation of their sustainable development plans, through individually-dedicated financial instruments or pooling funding schemes (i.e. “Basket Bonds”). 

Explore Europe’s Low-Carbon Industrial Projects: Discover our map showcasing investments and projects in low-carbon technologies within the European chemical industry.