Agricultural Law Decree: what to expect?

As you may have recently heard from various newspapers and official/institutional web-sites, on the 6th of May a new law decree (“Agricultural Law Decree”) was approved in Italy by the Council of the Ministers regarding urgent measures for agricultural, fishing and water-cultivation companies as well as for national strategic companies. Such Agricultural Law Decree was unofficially circulated by certain web-sites, anticipating what could be the main topics. The Minister of Agriculture, Food, Sovereignty and Forestry (Mr. Lollobrigida) presented the measure in a press conference following a debate with the Minister of the Environment (Mr. Pichetto Fratin) explicitly referred to the provision ruling a ban for solar plants on agricultural lands.

According to such last draft received by most of the energy market players, the main topic that could negatively affect the renewable sector in Italy concerns the provision that may prohibit the deployment of solar plants on agricultural areas. In fact such provision may potentially have a strong impact on the achievement of the EU targets Italy is currently focused to reach within the next decade.

On the basis of such unofficial drafts circulated among the main sector’s operators and PV associations in Italy, we have thought it may relevant to provide you with a very brief and preliminary legal overview of art. 5 of the Agricultural Law Decree (provisions aimed at limiting the use of agricultural land):

• such provision would have the effect to amend art. 20 of the Legislative Decree no. 199/2021 by introducing a new comma 1-bis;
• such comma 1-bis provides that the installation of ground-mounted PV plants (making reference to art. 6-bis, lett. b) of Legislative Decree no. 28/2011) in areas classified as agricultural by urban planning plans is limited to “suitable areas” as for the (i) PNIEC, (ii) repowering and revamping of pre-existing PV plants (provided that there is not additional use of soil for that purpose), (iii) solar facilities financed under the PNRR, (iv) non-productive agricultural lands such as quarries, mines areas under concession to railway and airports, (v) areas protecting motorways strip and (vi) areas inside industrial plants;
• the new restrictions will not apply to PV plants used for energy communities and self-consumption;
• the new provision will not apply to projects currently undergoing the approval process.

In a nutshell, what are the controversial aspects of the above?

1. Ground-mounted PV plants are not mentioned per se, but as referred to in art. 6-bis, lett. b) of Legislative Decree no. 28/2011. This provision, in turn, does not concern new installations, but only specific works to be performed on existing plants, such as those allowing the substitution of panels, technology and other components with an amendment of the layout, provided that certain specific heights requirements of the modules are met introducing a simplified procedure (DILA).
2. Such classification seems quite ambiguous as we think that the Government’s intention was to define the type of ground-mounted PV plants that could be installed if they meet certain agricultural requirements (such as the height of the panels from the soil). However, as currently written, the last draft appears to be extremely unclear as it is not enough certain whether the Government wanted the new provision to apply ONLY to limited works for repowering/revamping OR, as it would appear more likely, to any new ground-mounted PV plant, even if an apparently wrong definition was reported.
3. What are the projects, whose authorisation procedure is currently ongoing as of the date of the publication of the Agricultural Law Decree, allowed to complete the authorisation process by applying the old provisions without being affected by the new legislation? Legally, it is relevant to assess when an authorisation procedure could be deemed as ongoing, and this usually applies only to specific cases where the authorisation application has been filed and the authorisation procedure has started. However this, at prima facie, seems to be different from what the Minister of the Environment has anticipated through the official press release whereby he made reference to projects for which the interconnection request has been duly requested to the relevant TSO.

What are the answers we may expect from the official draft or from the Government to give more clarity to the current scenario?

1. It should state if the definition of ground-mounted PV plants to be realised on suitable areas actually refers to those meeting agricultural requirements and to what extent (meeting innovative agricultural technology and guidelines or not). The reference to art. 6-bis, lett. b) of Legislative Decree no. 28/2011 could be indeed deleted, if the intention of the Government is to apply the provision to all ground-mounted PV projects, or could be made more explicit, if, on the other hand, the purpose is actually to limit the scope of the provision only to revamping/repowering works on existing, ground-mounted PV plants. 
2. It should confirm what the Government intends to do to preserve projects which are already under development but have not yet reached an advanced status (meaning that the authorisation application has not been submitted to the relevant competent authority).

In light of the above, taking not consideration that such scenario could be considered a “Change in Law” affecting the possibility and or timing to duly fulfill development obligations related to the achievement of RtB projects, we strongly suggest to “wait and see” the official version of the Agricultural Law Decree, pending any legal opinion and/or decision on the ongoing contractual arrangements between developers and investors.

In certain circumstances, whether the relevant time for payment (for instance in respect to certain milestones) has elapsed, it could be advisable to alert the counterpart in order to take a common view on the contractual relationship and the potential consequences that could arise accordingly.

Please also note that a Law Decree enters into force the day after its publication on the Official Journal, but must be converted into law by Parliament within 60 days from its publication. It is therefore not only possible, but also likely that during the parliamentary debate the text will undergo additional changes and modifications.