Italian Prime Minister Giorgia Meloni has adopted a radical overhaul of the country's building renovation 'superbonus' incentive scheme aimed at improving energy efficiency. The scheme was

originally introduced in May 2020 as part of the 'Relaunch Decree' to restart the Italian economy after the coronavirus pandemic. Under the scheme, homeowners could get 110% of renovation expenditure covered by the government. However, the scheme has put a strain on Italian finances, costing more than €105 billion to the state budget, and has been widely criticised for fueling inflation and fraud in the construction sector.

In a move aimed at combatting fraud, the new decree maintains the tax deduction option but eliminates all other possibilities. The previous system was “open to fraud” because the credit could initially be transferred to a bank, to a financial intermediary, or to a company “without any limit and at the beginning without any control.” The new measures were adopted on 16 February and will not affect works which have already started.

Additionally, the scheme created a bubble in the construction sector by causing the cost of raw materials such as iron, steel, and concrete to skyrocket. To address this, the Meloni government intervened in January with a measure to lower state incentives from 110% to 90%. Furthermore, the scheme has created an issue of €15 billion in substandard credits that banks are now struggling to handle, according to data from the National Association of Building Contractors.

The Five Star Movement, which created the scheme, is now protesting against the overhaul, saying that Giorgia Meloni is lying and running a campaign of "psychological terrorism." They argue that the scheme has "paid for itself" by creating 900,000 jobs and cutting one million tonnes of CO2 emissions. According to a study conducted by the Italian research group Nomisma, the superbonus scheme allowed homeowners to save an average of €964 per year, while the total reduction in CO2 emissions is estimated at 1.42 million tonnes.

Despite the controversy, the scheme has been praised for its original intentions to improve energy efficiency and renovate buildings. The superbonus scheme was a critical measure to reduce Italy's energy consumption and carbon emissions, and it provided an opportunity for homeowners to invest in energy-efficient upgrades that could save them money in the long run. The scheme's overhaul may result in some short-term pain for contractors and homeowners, but in the long run, it could provide a more sustainable and cost-effective approach to building renovations and energy efficiency.

In conclusion, the Italian government's overhaul of the building renovation superbonus scheme is a significant step towards reducing fraud and increasing sustainability. The previous system was not sustainable, and the government had to act to prevent further damage to the economy and the environment. The Five Star Movement may defend the scheme, but it is crucial to find a balance between promoting energy efficiency and preventing fraud and waste. The new measures may cause some short-term issues, but they could lead to a more sustainable and efficient building renovation sector in the long run. Photo by Presidenza del Consiglio dei Ministri, Palazzo Chigi, Wikimedia commons.