Partner Rome
"Over the last few decades, Italy has bridged the infrastructure gap that previously set it apart from other EU states and is now experiencing an unprecedented phase of acceleration in the data centre sector."
According to a study by the Milan Polytechnic’s Data Center Observatory, which has monitored the Italian supply chain since 2020, 23 organisations (including eight new international companies) plan to open 83 new facilities in Italy by the end of 2025.
Expected growth is exponential and Italy’s high attractiveness to investors is thanks to several factors, including its central location in the Mediterranean. This has been strengthened by several investments in strategic projects to lay submarine cables and build transcontinental connectivity hubs. Moreover, its high concentration of factories and large population make Italy rich in opportunities for digital market players. The development of the European cloud computing ecosystem is now following increasingly decentralised strategies, due to the slowdown of the FLAPD markets (Frankfurt, London, Amsterdam, Paris and Dublin). These markets, which have historically been at the epicentre of the continent’s digital infrastructure, are experiencing a slowdown after years of relentless development. This is due to the lack of available sites, internal resistance and the progressive decentralisation of the European cloud computing ecosystem.
Other structural and regulatory factors are also driving the development of new markets, including Italy. These include the growing demand for computational capacity and a focus on data retention, particularly sensitive data, within national borders. In Italy, this will lead to a rationalisation of public administration digitisation systems and the creation of a national public strategic hub for the management of critical data and applications.
Local impact
Shifting the focus from a national to a local level, it is noted that data centres significantly impact local development. Substantial investments made by market players to build new infrastructure serve as real development factors for local businesses, potentially involving hundreds of employees. Local benefits include the potential redevelopment of large, disused areas and the allocation of specific funds to the public budget for public works, thereby benefiting citizens. Additionally, from an energy-balance perspective, the waste heat from a data centre could be reused for district heating applications. Finally, these projects will create high-skill jobs, not only once operational but also regarding the design and construction of the data centres.
Italy is poised for significant growth in its digital infrastructure. Between 2024 and 2028, the country is expected to attract investments totaling €7.8bn for the construction of new data centres. Furthermore, as of early 2024, 20 new projects have been launched or are in the pipeline, with investments projected to range between €10bn and €13bn over the next five to ten years.
The regulatory framework
"The lack of a defined framework for data centre infrastructure and specific authorisation procedures has created difficulties between data centre companies and regional and national authorities."
This trend is currently at odds with a lack of certain regulatory conditions which threaten to slow progress down. The lack of a defined framework for data centre infrastructure and specific authorisation procedures has created difficulties between data centre companies and regional and national authorities. This has led to significant slowdowns in the construction and deployment of projects.
The Ministry of the Environment and Energy Security (“MASE”) is attempting to remedy these problems. Through Decree no. 257 of 2 August 2024, MASE approved guidelines for data centre environmental assessment procedures, specifically addressing applications for data centres with emergency generators totaling over 50 MW (the “Guidelines”).
The Guidelines emphasise the environmental sustainability criteria that must be met in the design and operation of data centres. They define methodologies for projects subject to environmental assessment, with particular attention to any impact on land and water consumption, health and safety, biodiversity, cultural heritage and landscape.
The document also recommends using brownfields for the construction of new infrastructure.
Brownfield areas are land previously used for industrial or commercial purposes that may be contaminated with pollutants and require remediation before their reuse. Prioritising the use of these areas, often abandoned, represents an opportunity for urban regeneration, allowing for the recovery of already compromised land and contributing to sustainability. In addition, this approach reduces land consumption for new projects, avoiding further destruction of natural or agricultural spaces.
The use of such areas is also functional for the simultaneous production of additional electricity from renewable sources, as prescribed by the Guidelines. According to MASE, the maximum possible coverage with photovoltaic systems of all sealed surfaces, including parking areas, should be provided. This includes, where possible, the use of geothermal energy for conditioning indoor spaces.
Although the Guidelines represent an important step forward for the regulation and sustainability of data centres in Italy, it would be appropriate to introduce a specific regulation aimed at simplifying the authorisation process.
In fact, a bill of law is under discussion for the government to establish a regulatory framework for data centres that are still identified as generic industrial buildings. This bill aims to define the permitting procedures for the construction of such infrastructure.
Conclusion
"Establishing a comprehensive regulatory framework is essential to facilitate the secure and sustainable management of Italy’s critical data."
Given the complex and interdisciplinary nature of this sector, the importance of an organic legislative regime covering urban planning and environmental and energy considerations cannot be overstated. Fragmented regulatory regimes, as at present, represent a significant obstacle to the sector’s development by discouraging investors, both domestic and international, and delaying the construction of critical infrastructure.
Establishing a comprehensive regulatory framework is essential to facilitate the secure and sustainable management of Italy’s critical data. This will help streamline permitting processes, encourage investment and support the growth of the national data centre market. The outlook for the sector in Italy is promising, with substantial opportunities for economic growth, job creation and technological advancement. By addressing regulatory challenges and fostering a supportive environment for investment, Italy can position itself as a leading hub for digital infrastructure in Europe.
This will not only drive technological innovation but also contribute significantly to the country’s economic development and global competitiveness.
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