Strategic Positioning Analysis of the Italian Manufacturing Sector regarding Decarbonization Technologies

The success of the Net Zero Industry Act (NZIA, 2024) depends on the capacity of European industry to manufacture key decarbonisation technologies domestically. While policy targets focus primarily on deployment, empirical evidence on manufacturing capabilities, value-chain positioning and firm-level constraints remains fragmented. This limits the design of effective industrial strategies aligned with the EU’s climate objectives. This study addresses this gap by developing a structured evidence base on Italy’s manufacturing positioning across eight NZIA technologies: photovoltaics, wind power, batteries, electrolysers, carbon capture and storage (CCS), heat pumps, grid technologies and biogas systems. The analysis focuses on manufacturing capacity rather than deployment outcomes, examining technological specialisation, supply-chain integration and structural bottlenecks affecting industrial scaling. The empirical approach combines three components. First, a national firm-level survey (54 questions across six sections: firm profile, production capacity, competitive positioning, future perspectives, critical raw materials, and energy consumption) was disseminated through major industrial associations (ANIE and ANIMA). Second, survey results are integrated with sectoral mapping based on ATECO classifications and firm-level data from AIDA, enabling cross-validation between self-reported capabilities and structural industry characteristics. Third, EU policy documents and sectoral mappings are used to contextualise differences in technological maturity and capital intensity. Preliminary results (41 responses covering 20 ATECO codes and 7 NZIA technologies) reveal marked heterogeneity across technologies. Italy shows stronger manufacturing capabilities in component-intensive and engineering-driven segments, such as heat pumps and certain grid technologies, while capacity remains more limited in upstream-dependent and capital-intensive areas such as batteries, photovoltaics and electrolysers. Across technologies, four recurrent bottlenecks emerge: high capital intensity and investment risk; dependence on critical raw materials and imported components; shortages of specialised technical skills; and energy cost volatility and infrastructure constraints. These constraints appear structural rather than temporary, suggesting that uniform industrial policies may be misaligned with technology-specific needs. The study contributes by shifting attention from deployment targets to manufacturing capabilities, proposing an integrated firm-level and sectoral framework to assess industrial readiness under the NZIA. The findings support a capability-driven approach to industrial policy, highlighting the need to align industrial support, energy policy and critical raw material strategies to strengthen Europe’s decarbonisation competitiveness.