Market context and guidance

The action taken by the Authority is directed towards ensuring uniform accessibility and distribution of services throughout the entire national territory, establishing acceptable service quality levels, setting up tariff systems that are clear, transparent and based on predefined criteria, promoting the protection of user and consumer interests.
Among the changes during 2023, we mention the entry into force of Legislative Decree dated 23 February 2023, implementing the European Directive on the quality of water intended for human consumption. The regulation lays down the conditions under which water intended for human consumption may be considered “healthy and clean”: reviewing and introducing new limits for substances hazardous to health (including PFAS, chromium and chlorates), undertaking a risk-based approach, with a view to guaranteeing the safety of water intended for human consumption and improving fair access for everyone to safe drinking water.
ARERA has also approved the rules for the fourth regulatory period, effective from 2024. These establish incentive mechanisms to promote the efficiency of operators also by assigning greater importance to activities associated with environmental sustainability, particularly those aimed at combatting the impact of ongoing climate change, safeguarding water resources, encouraging decarbonisation of energy consumption and making infrastructure more resilient under conditions of stress.
Lastly, insofar as concerns market developments, we intend to consider and participate in the new tenders launched by the various contracting authorities (Regions, Municipalities, Area Entities) for the concession of Integrated Water Services across Italy.

During the course of COP28, which was held in Dubai from 30 November to 12 December 2023, the parties drafted an agreement for accelerating global transition, promoting the "transition away" formula and setting out a roadmap for drastically reducing the use of coal, oil and gas. For the first time, the agreement includes explicit reference to a phasing out of fossil fuels to reach climate neutrality by 2050 and defines objectives aimed at tripling renewable energy and doubling energy efficiency measures.

The market context in this area shows a high “potential demand”, for example as regards landfill disposal, waste-to-energy, composting, biogas generation, the treatment of sludge and liquid waste, mixed material recycling and the production of “Secondary Raw Materials”.
The sector is also favoured by the trend in the Italian regulatory framework, which provides for incentive forms and “revenue cap” mechanisms, together with the European Union guidelines regarding the Circular Economy ("Closing the Loop") aimed at the recycling and recovery of materials, facilitating the development of a new plant engineering in order to recover the infrastructure gap, particularly in the treatment of organic waste.
As regards Italy, in 2022 the National Programme for Waste Management (PNGR) was approved; this is a strategic tool to guide the Regions and the Autonomous Provinces in the planning of waste management, which establishes macro-objectives, macro-actions, targets and strategic guidelines to be followed in the preparation of Regional Plans for Waste Management (PRGR).
The PNGR covers a period of six years (2022-2028) and seeks to bridge the plant engineering gap, increasing the separate collection and recycling rate with a view to developing new supply chains for secondary raw materials from waste recycling, to replace the traditional chains, and contribute to the energy transition, based on national reconnaissance of existing systems.
Lastly, we mention that the sector offers growth opportunities also due to the availability of new technologies (for example composting) and the potential industrial integrations with other operators. The situation is therefore propitious for our growth strategy, also via acquisitions and with a view to positioning the Group as major operator in the treatment and recycling of paper, plastic, metal and wood.