Italy country analysis brief

Italy is almost entirely dependent on imports to meet its energy needs. The country's heavy reliance on foreign oil and gas sources, such as Libya and Algeria, has made energy security and diversification of energy sources top concerns.
The information contained in this report is the best available as March 2003 and is subject to change.

Italy is one of the world's largest economies, a founding member of both the EU and the North Atlantic Treaty Organization (NATO), and belongs to Group of Eight (G-8) industrialized nations. It adopted the European single currency, the euro, on January 1, 1999.
Italy's 59th government since 1945 came to power in June 2001, headed by Prime Minister Silvio Berlusconi, leader of the Forza Italia party. The right-right government is a coalition of five parties called "House of Freedoms" which achieved majorities in both houses of Parliament, improving the new government's chances to implement reforms.
Prior to Berlusconi's government, Italy had achieved a major economic policy objective: the reduction of its budget deficit to under 3 % of gross domestic product (GDP) in order to comply with the EU's Stability and Growth Pact, a cornerstone of the EU's monetary policy.

The current government will face some difficulties in maintaining this budget due to slow economic progress. The economic slowdown has meant that tax revenue has decreased, making achievement of reducing the government's budget deficit to 1.5 % of GDP in 2003 more difficult. Furthermore, this slowdown has complicated the realization of the government's 2001 election promises -- tax cuts, privatisation, deregulation of the labour market, and reform of the pension system.
However, the 2003 budget plans to lower income taxes for employees earning below EUR 25,000 a year, which addresses one of Prime Minister Berlusconi's campaign promises. Meanwhile, a new report issued from the European Commission characterized Italy as among the slowest EU members to make progress in reforming its economy.

The Italian economy was weak throughout 2002, with an estimated real GDP growth of only 0.4 % for the year. Real GDP is forecast to grow 1.4 % in 2003. The Italian energy sector has been undergoing considerable restructuring in recent years. EU Directives on electricity (96/92/EC) and on natural gas (98/30/EC) have established common rules for creation of internal markets and required privatisation of Italy's dominant energy monopolies.
In November 2002, European ministers set deadlines for complete energy liberalization across the EU. All business users will be free to choose energy suppliers by July 2004, and this will be extended to all domestic users in 2007.

In general, the Italian government has been working to liberalize its energy sector since the beginning of the 1990s. In 1995, the government created an independent body, the Electricity and Gas Authority, to regulate these areas. The government also issued the Bersani Decree on April 1, 1999, which seeks to accelerate the process of liberalizing Italy's electricity sector in accordance with the criteria laid down by EU Directive 96/92/EC.
The Decree stipulated that, beginning on January 1, 2003, no single entity is authorized to produce or import, directly or indirectly, more than 50 % of the total electricity produced or imported in Italy. This Decree has required Enel, the state-owned electricity company, to divest 15,000 MW of its generation capacity by the 2003 deadline.
In addition, ENI, the partially state-held oil and gas conglomerate, along with its main subsidiaries, Agip (hydrocarbons exploration and production) and Snam (gas supplies and distribution) all have been partially privatised. The Italian government sold off shares of ENI between 1995 and 1998, and now holds 35 % of the company. Liberalization of the Italian energy markets has resulted in increased competition over customers between the traditionally state-owned companies and other key players.

With limited domestic energy sources, Italy is highly dependent on energy imports. Historically, the country has relied heavily on imported oil, much of it from North Africa (mainly Libya). After declining for a number of years, oil consumption has remained static recently (although Italy remains the third largest oil consumer in Western Europe). Italy has, however, increased its consumption of natural gas.
Natural gas is a much cleaner fossil fuel that helps Italy to meet domestic, European, and broader international requirements for a cleaner environment. North Africa and Russia are large exporters of natural gas to Italy. There have been concerns that this reliance on North African sources could have potentially negative implications for Italian energy security.

Oil
Italy holds 621 mm barrels in proven oil reserves. In 2002, the country produced an estimated 149,000 bpd of oil, a 2.7 % increase over 2001, while consumption remained the same at about 1.87 mm bpd. Italy is more than 90 % reliant on imports and is Europe's third largest oil importer.
Libya is Italy's main source of oil imports with other major import sources (in order of magnitude) including Iran, Saudi Arabia, and Algeria. About 50 % of Italy's gross oil imports are from the Middle East and North Africa. It is estimated that in 2000 oil's share of Italy's energy consumption fell to just under 50 % for the first time in over 20 years.
Italy is in the process of decreasing its reliance on oil, especially for heating and electricity generation. Heating oil consumption in 2000 was about one-third of that of 1981 and fuel oil consumption has fallen 38 % since 1995. Natural gas consumption is expected to rise as oil consumption falls in coming years.

Exploration and production
Italy's oilfields are located in the north of the country, onshore and offshore along the Adriatic sea coast and Sicily. Production at two large ENI-operated fields, Villafortuna and Aquila, has declined in recent years. In order to offset dependence on foreign sources, Italy is in the process ofincreasing domestic oil production.
ENI is the operator in a joint venture with Enterprise Oil to develop 600 mm barrels of oil equivalent (including oil and associated natural gas) at Val d'Agri, in the southern Apennine region, considered to be Western Europe's most promising onshore development area. In December 2001, ENI completed a 85-mile (136 km), 150,000-bpd capacity pipeline connecting the fields to the Taranto refinery, which has allowed daily production in Val d'Agri to reach 45,000 bpd. ENI aims to have the fields producing 104,000 bpd by late 2003 and eventually 120,000 bpd.

In the Tempa Rossa field, neighbouring the Val d'Agri fields, TotalFinaElf, which assumed operational ownership after purchasing ENI's 25 % interest, is developing over 400 mm boe in a joint venture with Enterprise Oil (25 %) and ExxonMobil (25 %). Tempa Rossa has much heavier crude than Val d'Agri, and TotalFinaElf has finished 5 of the 7 planned wells at Tempa Rossa (as opposed to 42 at Val d'Agri). Tempa Rossa will reach a production plateau of 50,000 bpd of oil. The oil will be transported by pipeline to the Taranto refinery.

Downstream
To ensure access to foreign oil, the Italian government has promoted Italy as a refining centre since the 1970s. There are large oil refining facilities along the Mediterranean coast and on Mediterranean islands, capable of processing a wide range of crude oils from North Africa and the Persian Gulf. As a result, Italy now has Europe's largest surplus refining capacity.
However, refinery throughput was only 76 % of capacity in 2000, and Italy is importing almost as much refined product as it exports. ENI operates 6 of the 17 major refineries in Italy. While underutilised, the Italian refineries remain attractive because of their ability to handle large oil tankers and process many different fuel types, and also because of their catalytic and hydro cracking capabilities. ExxonMobil has a facility at Augusta on the Sicilian coast.

Italy has more gasoline stations than any other country in Europe. The government maintains that reducing the number of stations will help reduce the cost of gasoline. In June 2000, in further efforts to address steadily increasing gasoline costs that went above $ 4 per gallon in the summer of 2000, Italy's antitrust commission found seven oil companies guilty of price-fixing at the retail level.
The companies were fined about $ 300 mm, and in November 2000 the courts upheld the ruling on appeal but reduced the fine to about $ 200 mm. In 2001, ENI sold 261 gasoline stations to Tamoil and 257 stations to other retailers as part of ENI's plan to concentrate more on upstream activities.

Natural gas
Italy has natural gas reserves of 8 tcf. In 2001, the country produced 550 bn cf and consumed 2.5 tcf, relying on imports for nearly 75 % of total consumption. Italy's natural gas consumption has risen substantially since imports began in the early 1970s.
Italy currently is the third largest natural gas market in Europe, behind Germany and the United Kingdom. Natural gas use has increased substantially in recent years, especially for power generation. In 2001, natural gas represented about 34 % of total energy consumed in Italy, and this share is expected to grow to 44 % by 2010. In 2000, residential and commercial sectors accounted for 35 % of the market, industrial 30 %, and electricity generation 32 %. It is estimated that by 2010, 48 % of electricity in Italy will be generated by natural gas and only 7 % by oil.

Sector organization
ENI along with its subsidiary Snam, control most of the Italian natural gas market. ENI supplied about 87 % of the natural gas consumed by Italy in 2000 through its domestic production and contracted imports. Edison Gas, an independent power producer (IPP), is the only other significant company in the Italian natural gas sector, supplying about 5 % of the market.
Edison's shares are increasing rapidly, however, as natural gas supplies from a 20-year contract with ENI-Gazexport joint venture Promgasto import 70.6 bn cf per year began in 2002. Along with constructing a re-gasification plant in Porte Levante, Edison also is planning to have 15 % of Italy's natural gas market by 2007. Italian electricity conglomerate Enel also imports gas directly for its own generation activities and is aiming to increase its share of the natural gas market to about 20 % by 2007.

Italy has had very high rates of return for natural gas suppliers, transporters, and distributors, when compared with other European countries. Italian consumers pay among the highest natural gas prices in Europe, though there is significant regional variability in prices.
As of January 1, 2003, Italian consumers gained the freedom to choose their natural gas supplier. Liberalization in Italy's gas market has ignited competition among large key players in the sector, such as Gaz de France, BG, BP, Shell and ExxonMobil, as well as hundreds of domestic distribution groups. This process began in 1998 with the EU Natural Gas Directive, directing member states to open their natural gas markets to competition.

In May 2000, the Italian government unveiled a decree, authorizing that no single company can supply more than 50 % of the natural gas sold to final users by 2003. No company will be able to send more than 75 % of natural gas put into the transmission system beginning in 2002, and this will be reduced to 61 % by 2010. The legislation also requires corporate and accounting separation of natural gas storage and transport activities. Snam will retain control of Italy's 29,000 km (18,125-mile) pipeline natural gas grid, but parent company ENI must split Snam's pipeline transport activities from commercial and sales activities.
In late November 2001, the new company controlling the natural gas grid, Snam Rete Gas Italia, had an IPO of 40.24 % of its shares, which was heavily oversubscribed. The launching of ENI's new gas distribution company, Italgas Piu, was also in November 2001. Through Stoccaggi Gas Italia, ENI also operates a system where it stores and modulates natural gas. ENI's storage system is made up by 9 fields, 8 of which are located in Northern Italy (one of them is not yet operational) and one in Central Italy. Enel received permission from antitrust authorities to acquire five gas distribution companies in Northern Italy in October 2001. They are: Arda Gas, Gead, Adda Gas, Geico, and Sein.

Imports
Most of Italy's natural gas fields are located in the Po Valley and offshore in the Adriatic. Preliminary estimates of 2001 production show a 7 % decline compared to 2000. Hence, Italy is growing increasingly dependent on imports. Diversification of supply is an important issue, as Italy relies heavily on Algeria and Russia. In 2001, Italian natural gas sources were estimated to be 22 % domestic, 45 % Algerian, 36 % Russian, 13 % Dutch and 2 % Norwegian. Snam imports from The Netherlands, Algeria, Russia and Norway; Edison imports from Russia, Norway, Libya and Qatar (LNG); and Enel imports from Algeria and Nigeria. Snam, Edison, and Enel have contracts in place to increase purchases of Algerian and Russian natural gas.
Libya, Norway, and Qatar (LNG) are major alternative natural gas suppliers for the Italian market. The biggest project under development is the $ 4.5 bn "West Libya Gas Project", which will draw natural gas from the offshore Bouri field and the Wafa field, located in southern Libya. The gas will be treated in Melitah, 80 km from Tripoli, where it will be transported via the 600 km (372-mile) pipeline "Green Stream", running under the Mediterranean and connecting with the TransMed pipeline in Gela in Sicily.

About 282.5 bn cf per year will be able to flow through the pipeline. The project was finalized in July 1999 as a joint venture between Libya's state-held National Oil Company and ENI, and an ENI contract to buy 141 bn cf per year from the joint venture was signed in early 2000. In November 2000, Gaz de France agreed to buy another 70.6 bn cf from ENI. Start-up is planned for 2004. Snam began importing 6 bn cmpy (212 bn cf) of Norwegian natural gas through existing pipelines in October 2001, and will continue to do so for 24 years.
At the end of 2002, the Algerian oil group Sonatrach along with Edison, Enelpower, Germany's BASF, Wintershall and Eos Energia formed a joint venture called Galsi. The joint venture will study the feasibility of building a 1,500 km $ 2 bn pipeline from Algeria's eastern terminal Skikda to Sardinia. A potential starting date for operation is 2008. Russia's Gazprom also has plans to begin constructing a pipeline via Bulgaria, with an operating capacity of 353 bn cf per year, but it is unlikely that the project will begin in 2003.

LNG
Although LNG makes up a small percentage of Italy's natural gas imports (9 % in 2000), it is becoming increasingly important. In 1992, Enel signed a contract under which Nigerian LNG will be delivered to France and swapped out to Enel for 22 years, beginning in 1999. In June 2001, Edison signed a 25-year agreement to buy 3.5 mm tpyof LNG (equivalent to 173 bn cf) from the fourth natural gas train of RasGas in Qatar when the train is completed in 2005.
Delivery will be made to a $ 430-mm floating re-gasification terminal which Edison and ExxonMobil are constructing 11 miles offshore Marina di Rovigo in the northern Adriatic. It will be completed in 2005 with a capacity of 161 bn cf per year. Enel has announced that it also has an agreement with QatarGas and Spain's Repsol-YPF to import LNG. In 2001, the two European companies signed a memorandum to carry out a feasibility study on constructing a gas train with a 4.8 mm tons (equivalent to 233 bn cf) per year capacity.

In order to increase LNG imports, a number of companies are in the process of building re-gasification terminals. Presently, Italy has one LNG terminal -- ENI's 122.5 bn cf per year in Panigaglia. BG Group (British Gas) recently won approval for its proposed LNG recovery terminal at Brindisi in southern Italy. BG is aiming to have the terminal on stream at the end of 2006 with a capacity of 3 mm tons (equivalent to 146 bn cf) per year.
Italy has five other LNG terminal proposals under consideration. Enel has proposed three sites located in Toranto, Vado Ligure and Muggia. The Italian company Falck is proposing two sites along the southern Calabrian coast. Edison is proposing an additional terminal in Tuscany.

Coal
Coal consumption in Italy is dominated by power generation, which is increasing (estimated to reach 22 % by 2010), and coke production for steel, which is decreasing. Coal has played a small role in the Italian energy sector, and Italy produces almost no coal domestically. In 2001, nearly 8 % of Italy's primary energy demand was met with coal.
The power sector is expected to increase its coal consumption in coming years, as ENI works to decrease reliance on imported oil, though coal will not be as important as natural gas. Clean coal technology will figure prominently in this increased coal usage, as EU environmental stipulations, Kyoto targets, and Italian public opinion demand that Italy's energy sector become increasingly clean.
Increased coal usage will be supplied by a combination of increased domestic production and increased imports. Main exporters of steam coal to Italy are South Africa, Indonesia, Colombia, United States, Poland, China and Australia.

Electricity
Italy has electric generation capacity of 69 mm kW. In 2001, the country generated 203.4 bn kWh and consumed 289.1 bn kWh. Generation is mostly from thermal sources (78 %) -- oil, gas, and coal. The mix of thermal power is shifting away from oil and toward natural gas, such that natural gas should be the dominant fuel source for electricity generation by the end of the decade. Non-hydro renewable electricity generation (mostly solar and geothermal) almost doubled in the 1990s, and over 2 % of Italian electricity is now produced from renewable sources.
Italy's extensive electricity network is linked to its neighbours. Electricity imports come mostly fromFrance, Switzerland and a small percentage from Slovenia. In the summer of 2002, Italy and Greece completed the construction of a new 163 km (102-mile), 400-kilovolt underwater cable to link Italy and Greece. The cable will allow Greece to transfer electricity to the EU, as well as serve as a back-up source for Italy.

Sector organization
Enel is Italy's dominant electricity company, which the government founded in 1962. Enel, which was completely state-owned until November 1999, produced about 70 % of Italy's electricity usage in 2000. EU Directive 96/92/EC, issued in 1996, requires member countries to open their electricity markets to competition and also requires that no single company generate more than 50 % of any member country's electricity by 2003.
This has resulted in several important changes in Enel, including partial privatisation and the sale of some of its assets to reduce market share. The Italian government issued the Bersani Decree in 1999, which implemented the EU Directive, beginning the liberalization of the electricity market in Italy. The November 1999 Enel privatisation stock sale was Europe's largest IPO. The government floated 32 % of the company, which sold for 18 bn euros ($ 15 bn), on the Milan and New York stock exchanges.

The Decree also required Enel to divest 15,000 MW of its total 56,000 MW installed capacity by January 1, 2003. In order to comply with the Decree, Enel divested three electricity generation companies: 5,438 MW Elettrogen in July 2001 to Endesa, 7,009 MW Eurogen in March 2002 to Edipower, a consortium led by Edison, and 2,611 MW Interpower to Electrabel and Energia in November 2002.
Furthermore, no company will be allowed to acquire or hold stakes in more than one of the three companies, and no buyer will be able to be more than 30 % government-held. This last requirement was to prevent Electricite de France (EdF) from acquiring these companies. In 2001, EdF and Fiat took control of Edison.

Edison is 76 % controlled by Italenergia, an energy consortium in which EdF has an 18 % stake. After EdF's acquisition of Edison, the Italian government passed a decree to reduce EdF's voting rights in Italenergia to 2 % in the hope of blocking the French state-owned company from taking it over. This has resulted in a dispute over EdF between Italy and the European Union.
Because liberalization of the energy sector has proceeded at a slower pace in France, EdF has remained a state-owned company. EdF's purchase of privatised assets would in effect transfer them from Italy to France, so Italy has attempted to restrict this sale. The European Commission ruled in June 2001, that capital flows may not be restricted merely because of varying degrees of liberalization. However, the initial privatisation sale may be restricted, but such restrictions can only be in place for a limited period, after which the privatised companies can be resold to state-owned companies.

In January 2003, the European Commission issued statements of plans to take legal actionagainst Italy for establishing the so-called "golden share laws", which allow the state to influence former state-owned companies. Enel and EdF have also been conducting their own negotiations to settle the dispute. EdF has offered Enel a stake in four nuclear plants in France in exchange for recovery its voting rights in Edison.
Another facet of liberalization is that Enel must also sell its distribution networks in Italy's large urban centres. It has already sold off many local grids, including the Rome network to ACEA for EUR 568 mm in April 2001 and the Turin and Milano networks to AEM. However, local electricity companies have complained that Enel is blocking some of their access and several lawsuits in this regard.

In July 2002, the Italian government issued a bill that would require Enel to reduce its distribution network to less than 10 % of market share within three years (This also applies to ENI's gas pipeline network). The bill was approved by the cabinet and has been transferred to parliament for ratification. Enel has 100 % of the unlisted company Terna, which completely owns Italy's high voltage grid.
In early November 2000, the European Commission approved a merger that gave Italian conglomerate Compart sole control of Falck, forming the then third-largest electricity generation company in Italy. The deal also gave Compart control of Falck's subsidiary, Sondel. Enel, while selling off domestic assets, has made some foreign acquisitions. In December 2000, for instance, Enel purchased CHI Energy of the United States for $ 170 mm.

In September 2001, Enel purchased Nueva Viesgo of Spain, making Enel the fifth-largest generator in Spain. Siemens and Fiat Engineering are to build a 390-MW, combined cycle power plant in Torino worth EUR 190 mm. ENI has also been expanding its electricity generation capacity in Italy.
In May 2002, it began the construction of a 1,000-MW power plant in northern Italy. More recently, ENI announced that it plans to build five 2,000-MW power plants by2005.

Nuclear
Italy has four nuclear power plants -- Latina in central Italy, Caorsa in the northeast, Garigliano also in central Italy and Trino Vercellese in the northwest. Since 1987, none of the stations have been in operation after a public vote decided to abandon the use of nuclear power. The plants are currently being dismantled. The Italian government is in the process of identifying a single site to store all radioactive waste located within the country in order to increase security.
More recently, the Italian government has been reconsidering its policy towards nuclear energy. In December 2002, the Italian parliament considered a draft law which would permit Italian utilities to buy stakes in nuclear power plants outside of Italy. The document also included prospects of returning to nuclear energy generation in Italy. As mentioned in the previous section, Enel is already seeking to gain stakes in four nuclear power plants in France.

Environment
Environmental awareness has grown in Italy in recent years. Although Italy has relatively low per capita energy consumption and energy intensity levels in comparison to other OECD countries, air pollution remains a serious environmental challenge.
Because of Italy's heavy reliance on oil imports to meet its energy needs, energy security and diversification of energy sources are a top priority in Italy's energy strategy. Italy is well endowed with renewable energy resources, such as solar, biomass and geothermal which could be captured and utilized for energy. The government's goal of doubling the country's production of energy from renewable resources by 2012 will help enable Italy to meet its growing energy demand in the 21st century in a more sustainable manner.

Country profile
President: Carlo Azeglio Ciampi (since 1999)
Prime Minister: Silvio Berlusconi (since June 2001)
Location/size: Southern Europe/301,230 sq km (116,305 sq mi, slightly larger than Arizona)
Major cities: Rome (capital), Milan, Naples, Turin, Palermo, Genoa
Languages: Italian, German (parts of Trentino-Alto Adige region are predominantly German speaking), French (small French-speaking minority in Valle d'Aosta region), Slovene (Slovene-speaking minority in the Trieste-Gorizia area)
Ethnic groups: Italian (includes small clusters of German-, French-, and Slovene-Italians in the north and Albanian-Italians and Greek-Italians in the south)
Religion: Predominately Roman Catholic with established Protestant and Jewish communities and a growing Muslim immigrant community
Population (10/02): 57.9 mm
Defence (8/98): Army, 165,600; Navy, 40,000; Air Force, 63,600; Paramilitary forces, 255,700; Conscripts, 134,100

Economic overview
Minister of Economy and Finance: Giulio Tremonti
Currency: Euro - On January 1, 2002, the Euro became the single currency of the 12 member states. After that date, the Lira existed as legal tender until February 28, 2002.
Market exchange rate (03/05/03): $ 1 = EUR 0.91870
Nominal Gross Domestic Product (GDP, 2002E): $ 1,777 bn (2003F): $ 1,302 bn
Real GDP growth rate (2002E): 0.4 %; (2003F): 1.4 %
Unemployment rate (2001E): 9.5 %; (2002E): 9.1 %
Inflation rate (consumer prices, 2002E): 2.4 %; (2003F): 2.4 %
Major export products: Textiles, clothing, machinery, transportation equipment
Major import products: Crude oil, other fuels, machinery, transport equipment
Major trading partners: Germany, France, The Netherlands, United States, United Kingdom

Energy overview
Minister of Productive Activities: Antonio Marzano
Proven oil reserves (1/1/03E): 621 mm barrels
Oil production (2002E): 149,000 bpd, of which 84,700 bpd is crude oil
Oil consumption (2002E): 1.87 mm bpd
Net oil imports (2002E): 1.69 mm bpd
Crude oil refining capacity (12/1/02E): 2.30 mm bpd
Natural gas reserves (12/1/02E): 8.0 tcf
Natural gas production (2001E): 550 bn cf
Natural gas consumption (2001E): 2.5 tcf
Net natural gas imports (2000E): 2.0 tcf
Recoverable coal reserves (2000): 37 mm short tons
Coal production (2001E): 0.02 mmst
Coal consumption (2001E): 22.4 mmst
Electric generation capacity (1/1/01): 69 mm kW
Electricity generation (2001E): 203.4 bn kWh
Electricity consumption (2001E): 289.1 bn kWh

Environmental overview
Minister of Environment: Altero Matteoli
Total energy consumption (2000E): 7.96 quadrillion Btu* (2 % of world total energy consumption)
Energy-related carbon emissions (2001E): 121.5 mm tons of carbon (1.9 % of world total carbon emissions)
Per capita energy consumption (2000E): 138.3 mm Btu (vs. US value of 351 mm Btu)
Per capita carbon emissions (2000E): 2.0 tons of carbon (vs. US value of 5.6 tons of carbon)
Energy intensity (2000E): 6,603 Btu/ $ 1990 (vs. US value of 10,918 Btu/ $ 1990)**
Carbon intensity (1999E): 0.1 tons of carbon/thousand $ 1990 (vs. US value of 0.17 tons/thousand $ 1990)**
Fuel share of energy consumption (2000E): Oil (48.7%), natural gas (32 %), coal (6.2 %), hydro (5.7 %), and other renewables (1.58 %)
Fuel share of carbon emissions (2000E): Oil (57.5 %), natural gas (31.4 %), coal (11.1 %)
Renewable energy consumption (1998E): 560 t Btu* (1 % increase from 1997)

Status in climate change negotiations: Annex I country under the United Nations Framework Convention on Climate Change (ratified April 15th, 1994). Under the negotiated Kyoto Protocol (signed on April 29th, 1998, and ratified the Treaty on May 31st, 2003), Italy, as a member of the European Union, has agreed to reduce greenhouse gases 8 % below 1990 levels by the 2008-2012 commitment period.
Major environmental issues: Air pollution from industrial emissions such as sulphur dioxide; coastal and inland rivers polluted from industrial and agricultural effluents; acid rain damaging lakes; inadequate industrial waste treatment and disposal facilities.
Major international environmental agreements: A party to Conventions on Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulphur 85, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands and Whaling. Has signed, but not ratified: Air Pollution-Convention on Persistent Organic Pollutants.

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data.
**GDP based on EIA International Energy Annual 1999.

Energy industry
Oil and gas company: Ente Nazionale Idrocarburi (ENI); Chief Subsidiaries: Agip (hydrocarbons exploration and production), Snam (gas supplies and hydrocarbon transportation), EniChem (petrochemicals)
Major pipelines (gas): TransMed, Trans-Austria Gasleitung
Major ports: Cagliari (Sardinia), Genoa, La Spezia, Livorno, Naples, Palermo, Trieste, Venice
National electricity company: Ente Nazionale per l'Energia Elettrica (ENEL, undergoing privatisation)