What is high-efficiency cogeneration (CAR)?

Combined production of electricity and useful heat that meets the efficiency criteria of Directive 2012/27/EU, transposed in Italy by DM 4 August 2011 and 5 September 2011. Criteria: first-principle overall efficiency η = (Hchp + Pe)/Fti ≥ 0.75 (≥ 0.80 for steam turbines with condensation), and PES (Primary Energy Savings) > 10% for plants ≥ 1 MW, or PES > 0 for micro-cogeneration (< 50 kWe) and small cogeneration (< 1 MWe).

Is the electricity self-consumed by a cogenerator exempt?

Only in part, and with strict limits. Art. 52(3)(b) TUA exempts renewable electricity self-consumed above 20 kW. The Italian Supreme Court (Corte di Cassazione), order of February 21, 2025, clarified that the exemption for 'electricity used to produce more electricity' (Art. 52(3)(d)) covers only electricity used to generate more electricity or to keep the plant running, not the heat produced or general services (lighting, servers, HVAC). You need separate fiscal meters to distinguish the two flows.

Is a biomass cogenerator exempt from excise duty?

Yes, if the biomass is biodegradable and qualifying. Art. 52 TUA grants a full exemption to electricity from biomass. Italian Supreme Court ruling 25748/2025 confirmed that the exemption is proportional to the energy actually produced from qualifying biomass, and that the prior consumption notice is not an essential condition when consumption can be reconstructed from documents.

Does a natural-gas industrial self-producer cogenerator pay excise duty?

Yes, on the self-consumed electricity. Natural gas is a fossil source and falls outside the Art. 52(3)(b) exemption. A gas cogenerator is a taxable self-producer and pays the full rate on self-consumption (except for self-consumption used to produce more electricity, per Cass. 2025). It does, however, benefit from the natural-gas excise relief for cogeneration (D.L. 2/3/2012, converted into L. 44/2012), a reduction that applies to ALL combined productions, even without CAR qualification.

Which AD-1 quadri must a cogenerator file?

For a qualifying biomass cogenerator > 20 kW in self-consumption: A (identification), B (gross and net output), E (self-consumption exempt in proportion to biomass), G (excise calculation). For a gas or non-renewable cogenerator: A, B, C (any transfers), E (exempt-use shares such as production auxiliaries), G (full rate on the taxable share), I (payments). 15% bond on the taxable share.

How do you obtain CAR qualification?

Submit the application to the GSE by March 31 of the year following the production year. The GSE verifies PES parameters and overall efficiency from production data, and, if the outcome is positive, grants CAR recognition for the requested year. The qualification is annual and must be renewed every year. Recognition unlocks the benefits: TEE (white certificates), specific incentive tariffs, cogeneration guarantee of origin (GOc), and natural-gas relief.

What changes for cogeneration under the D.Lgs. 43/2025 reform?

Cogenerators liable as self-producers move to the semi-annual AD-1 declaration (H1 by September 30, 2026; H2 by March 31, 2027) with monthly advance payments (tax code 2806) and a 15% bond. CAR qualification and natural-gas relief are untouched by the D.Lgs. 43/2025 reform, which only addresses electricity excise. For operators in a purely renewable exempt regime, the semi-annual cadence is purely formal: no payment is due when the excise owed is zero.

AD-1 Cogeneration in Italy: HE-CHP, Art. 52 TUA Exemption and the 2025 Supreme Court Ruling

Q: Is the electricity self-consumed by a cogenerator exempt?

Only in part, and with strict limits. Art. 52(3)(b) TUA exempts renewable electricity self-consumed above 20 kW. The Italian Supreme Court (Corte di Cassazione), order of February 21, 2025, clarified that the exemption for 'electricity used to produce more electricity' (Art. 52(3)(d)) covers only electricity used to generate more electricity or to keep the plant running, not the heat produced or general services (lighting, servers, HVAC). You need separate fiscal meters to distinguish the two flows.

Q: Is a biomass cogenerator exempt from excise duty?

Yes, if the biomass is biodegradable and qualifying. Art. 52 TUA grants a full exemption to electricity from biomass. Italian Supreme Court ruling 25748/2025 confirmed that the exemption is proportional to the energy actually produced from qualifying biomass, and that the prior consumption notice is not an essential condition when consumption can be reconstructed from documents.

Q: Does a natural-gas industrial self-producer cogenerator pay excise duty?

Yes, on the self-consumed electricity. Natural gas is a fossil source and falls outside the Art. 52(3)(b) exemption. A gas cogenerator is a taxable self-producer and pays the full rate on self-consumption (except for self-consumption used to produce more electricity, per Cass. 2025). It does, however, benefit from the natural-gas excise relief for cogeneration (D.L. 2/3/2012, converted into L. 44/2012), a reduction that applies to ALL combined productions, even without CAR qualification.

Q: Which AD-1 quadri must a cogenerator file?

For a qualifying biomass cogenerator > 20 kW in self-consumption: A (identification), B (gross and net output), E (self-consumption exempt in proportion to biomass), G (excise calculation). For a gas or non-renewable cogenerator: A, B, C (any transfers), E (exempt-use shares such as production auxiliaries), G (full rate on the taxable share), I (payments). 15% bond on the taxable share.

Cogeneration (Italian: cogenerazione; combined production of electricity and useful heat) is a cross-cutting technical setup that, for excise duty purposes, qualifies as a self-producerunder Art. 53(2)(a) of the Testo Unico Accise (TUA, Italian Excise Code). Tax treatment depends on two variables: the source (renewable vs fossil) and the efficiency (CAR vs non-CAR). Italy's high-efficiency cogeneration (CAR)regime is governed by D.Lgs. 20/2007 and DM 4 August 2011 + 5 September 2011, which transpose Directive 2012/27/EU: first-principle overall efficiency η ≥ 0.75, and PES (Primary Energy Savings) > 10% for plants ≥ 1 MW (PES > 0 for micro < 50 kWe and small < 1 MWe). The key point clarified by the Italian Supreme Court order of February 21, 2025: the Art. 52(3)(d) TUA excise exemption for "electricity used to produce more electricity" covers only plant auxiliaries directly tied to generation, not the heat produced or general services (lighting, servers, HVAC). Separate fiscal meters are required. From 2026, liable cogenerators (as power plant operators under Art. 53 TUA) move to the semi-annual AD-1 declaration (D.Lgs. 43/2025).

High-efficiency cogeneration (CAR): definitions and parameters

The current CAR regime was built up across several steps: D.Lgs. 79/1999 (initial definition), AEEG resolution 42/02 (Italian parameters), D.Lgs. 20/2007 (transposition of Directive 2004/8/EC), DM 4/8/2011 + 5/9/2011 (current parameters for CAR qualification). The technical criteria:

Overall efficiency η = (H_chp + P_e) / F_ti ≥ 0.75 (≥ 0.80 for combined cycles with steam turbines and condensation).
PES (Primary Energy Savings) = primary energy saving versus separate production of electricity (reference η 42.6%) and heat (reference η 90%). Thresholds: PES > 10% for cogenerators ≥ 1 MW; PES > 0%for micro-cogeneration (< 50 kWe) and small cogeneration (< 1 MWe).
Annual application: CAR qualification is annual. File the request with the GSE by March 31 of the year following the production year.
CAR benefits: TEE (white certificates), specific incentive tariffs, GOc (cogeneration guarantee of origin), dispatch priority, and natural-gas relief.

Excise treatment: the 2025 Italian Supreme Court ruling

The Italian Supreme Court (Corte di Cassazione), by order of February 21, 2025, drew a sharp line around the scope of the Art. 52(3)(d) TUA exemption for "electricity used to produce more electricity":

Covered by the exemption: electricity powering inverters, control systems directly tied to generation, fuel pumping, plant safety devices, and any fuel storage.
Outside the exemption: electricity for heat production (even when recovered as useful heat), office lighting, non-process servers and IT, HVAC, and general site services.
Documentation burden: the cogenerator must install separate meters to distinguish the two flows. Otherwise the Italian Customs Agency (ADM) can deny the exemption and recover tax on the entire self-consumed volume.
The declaration obligation is not a condition for the exemption to apply: the same order confirms that failure to comply with formal duties does not extinguish the substantive right, as long as documentation allows the flows to be reconstructed.

Cogeneration and source: three scenarios

Source	Excise status on self-consumption	Notes
Qualifying biodegradable biomass	Exempt under Art. 52(3)(b) (in proportion to biomass, per Cass. 25748/2025)	The exemption applies only to the energy share derived from qualifying biomass; the fossil-fuel share is taxed at the full rate.
Natural gas (CAR or non-CAR)	Full rate on electricity self-consumption (excluding production auxiliaries)	Benefits from the natural-gas excise relief for cogeneration (D.L. 2/3/2012, converted into L. 44/2012), which is not tied to CAR qualification.
Diesel / heavy fuel oil	Full rate on electricity self-consumption (excluding auxiliaries)	No exemption or relief on electricity self-consumption.

AD-1 quadri for cogenerators

Filing varies by source but always includes production and allocation quadri:

Quadro A: plant identification - firm code, location, electrical and thermal nameplate capacity, cogenerator type, and source.
Quadro B: gross and net output for the half-year. Report electrical output separately from heat (even when the heat is useful).
Quadro C: transfers to third parties (for example, heat sold into a district-heating service, or sales of surplus electricity).
Quadro E: itemized exemptions by legal basis, with a clean split between (a) production auxiliaries [Art. 52(3)(d), Cass. 2025], (b) the biomass share [Art. 52(3)(b)], and (c) any other use-based exemptions.
Quadro G: excise calculation on the taxable share (heat, general services, and non-auxiliary electricity self-consumption for fossil cogenerators).
Quadro I: payments made - monthly advance payments via F24 ACCISE, tax code 2806.

Bond: 15% of the estimated annual excise on the taxable share. For purely exempt biomass cogenerators, the bond approaches zero. For natural-gas cogenerators in the MW range, it can exceed €10,000/year.

Natural-gas excise relief for cogeneration

Regardless of CAR qualification, D.L. 2 March 2012 (converted into L. 44/2012) grants relief on the natural-gas excise duty used in cogeneration. FIRE (the Italian Federation for the Rational Use of Energy) has clarified that the benefit does not depend on CAR recognition: it applies to all combined electricity-and-heat productions. In practice:

Natural-gas rate for cogeneration: €0.00033/Sm³ (versus €0.012-0.021/Sm³ for ordinary industrial use; check the current rate DM).
File the application with the locally competent ADM office, attaching the annual cogeneration production statement.
The benefit is proportional to the gas actually used in cogeneration. Plants with non-cogeneration units alongside the CHP set need separate accounting.

Common mistakes and grey areas

Declaring all electricity self-consumption as exempt: the most common mistake. Cass. 2025 made clear that the Art. 52(3)(d) exemption only covers production auxiliaries. HVAC, lighting, and servers are not production auxiliaries: they pay the full rate.
Skipping separate meters: without separate metering between production auxiliaries and general services, ADM can deny the exemption on the entire self-consumption. This is the step most often missed in pre-2020 installations.
Confusing CAR with the electricity excise exemption: CAR qualification unlocks TEE, GOc, incentive tariffs, and gas relief. It does not, on its own, trigger an electricity excise exemption.
Forgetting the annual CAR application: the qualification does not auto-renew. File the GSE application by March 31 for the previous calendar year, even when technical parameters have not changed.
Non-qualifying biomass: only qualifying biodegradable biomass benefits from the Art. 52(3)(b) exemption. Fossil fractions and non-qualifying biogas fall under the standard regime.