He is one of the driving forces behind the 110% superbonus; we interviewed undersecretary Riccardo Fraccaro to gain a better understanding of how it works.
He was the chief driving force behind the 110% superbonus, the government measure that aims, through the construction sector, to relaunch the Italian economy along sustainable lines. Riccardo Fraccaro, undersecretary of state to the presidency of the Council of Ministers, explains to LifeGate how important the renovation of our homes is for the country's energy transition — provided, however, that it takes place without any further land consumption and generates positive knock-on effects for the national economy, which has been severely hit by the coronavirus emergency. He also sets out the main provisions of the measure, as well as the changes recently introduced by the Italian parliament.
Tackling the climate crisis, cushioning the economic one and making homes safer by renovating them, without any further land consumption. Are these the three main objectives of the 110 per cent superbonus?
With the superbonus we are enabling citizens to make their homes more efficient and safer at zero cost by granting a tax deduction equal to 110 per cent of the amount spent — or, alternatively, by transferring the bonus to the firm carrying out the work, as a full discount on the invoice. It has been described as a real bazooka, but it is indispensable for addressing the two emergencies we face: the environmental one and the economic one. Climate change and hydrogeological instability are warning signs of a very serious crisis that our planet is going through as a result of unsustainable production models.
It is clear that we need to change course by adopting innovative policies that are compatible with the environment. We also need to give the economy fresh momentum: the coronavirus has triggered the worst crisis since the post-war period, making unprecedented and extraordinary measures necessary to get the country moving again. The superbonus combines environmental protection and growth by supporting the transition to a green economy. Italy is at the forefront of this.
The measures target a crucial sector and should have a positive multiplier effect. What kind of knock-on effects on the economy have you estimated?
Historically, construction has always been a driving force for the economy; it is one of the most integrated sectors and has a high multiplier effect. Naturally, however, we want to avoid new land consumption, which is why we have provided such strong incentives for the renovation of existing buildings. Focusing on improving the energy efficiency of homes and making them safer — given that 75 per cent of the building stock dates back to 1970 — means renewing the country. I will simply point out that the Associazione nazionale costruttori edili has estimated that the superbonus can generate 6 billion euros in turnover and 100,000 additional new jobs in the sector, with knock-on effects for the national economy of 21 billion euros — that is, an increase in gross domestic product of 1.3 per cent. Achieving even a fraction of these estimates would be an exceptional result.
With the previous ecobonus schemes, many construction firms had difficulty remaining competitive in the market, as they were forced to accumulate tax credits against significant upfront expenditure. How did you think of getting around this problem?
In addition to raising the deduction to 110 per cent, with the superbonus we have introduced another important innovation: tax credits can also be purchased by banking institutions or by any other party, even outside the supply chain. This was not possible under the old ecobonus regulations. Today, however, a firm that has applied the invoice discount can immediately transfer the credit to a bank, thereby obtaining instant liquidity. Many banks have already offered products and proposals on the market to purchase the tax credit at a price equal to or above 100 per cent. Even small firms will therefore be able to transfer the tax credit to banks at a price that is sustainable for them, recovering the full amount of the invoice discount they have applied.
Installing external wall insulation or replacing boilers are the essential conditions for accessing the incentives. In these first few weeks, some firms have complained about excessive red tape. What is your impression?
I would like to start from one point: most of the requirements already existed under the previous ecobonus and sismabonus regulations. I am thinking of urban planning compliance checks, sworn certifications and energy performance certificates. The additional requirements we have introduced are limited to the need to obtain a conformity visa in the event of a credit transfer, and to verifying that costs are reasonable.
I can assure you, however, that we will continue working to make this legislation even more effective. For example, parliament recently introduced important amendments to simplify some key aspects of the superbonus, broadening the definition of independent access, lowering the assembly quorums required to exercise the invoice discount option, and limiting the verification of a property's compliance status for condominium works to the shared parts of the building only.
The measure targets the main source of pollution in our cities: domestic heating. What are the objectives to be pursued on the transport front, also in light of the upheaval caused by the coronavirus?
Today 70 per cent of pollution is produced by buildings, which is why we wanted to support the energy transition with the superbonus. But we also need to rethink the very model of the city. As a government we have given a strong boost to sustainable mobility with a national plan worth 3.7 billion euros to renew the public transport fleet.
We have also introduced the ecobonus to incentivise the transition to electric and low-emission vehicles, and the mobility bonus for purchasing bicycles, e-scooters and other electric vehicles. Public and private transport must be redesigned along sustainable lines, and as a government we are working towards this.
Among the government's priorities for the use of the first recovery fund resources is precisely the extension of the superbonus to 2024. Can you confirm this?
Our objective is certainly to extend the 110 per cent superbonus, including with the help of European funds, and when approving the recovery plan we will decide until which year. But I will say more: personally, I believe it would be appropriate to make a strong incentive for the renovation of buildings a permanent fixture — perhaps at a lower percentage but with a longer and more stable time horizon.
On the subject of energy transition, the government recently gave the green light to the decree incentivising the promotion of collective self-consumption and energy communities from renewable sources. How much, and in what way, does this potential revolution tie in with the superbonus?
Energy communities are the future of sustainable development and of renewable energy in particular. The recent decree from the Ministry of Economic Development makes operational a provision we decided to introduce in December 2019. We are finally incentivising the establishment of a collective self-consumption system, which can also include businesses and local authorities within a broader scope than that of residential buildings.
Also thanks to the work of Parliament, we have made the 110 per cent incentive compatible with the establishment of energy communities. In this way, we are incentivising self-consumption while at the same time promoting energy efficiency improvements in buildings. Our goal is to promote a decentralised, efficient energy system that is increasingly powered by clean and renewable energy.