Significant events for the 2019 financial year

During the second half of the year the Segment expanded to include Demap Srl (acquired on 4 July with a 90% stake) and Berg SpA (acquired on 18 October with a 60% stake).

As regards the single local units, it should be noted that:

Terni (UL1): during the year, the contractual planning for the delivery of pulper waste guaranteed the fuel requirements for the entire period, and the­ expected performance was affected – both as regards waste pre-treatment activities and the production of electricity – by controlled operation at a reduced load and a shutdown for maintenance earlier than planned, carried out to perform functional checks of the plant aimed at solving critical issues on atmospheric emissions. Starting in April 2019 there was a variable and increasing trend in the quantities of micropollutants in the plant's atmospheric emissions compared to historical data, though still within legal limits. In compliance with authorisation requirements, monitoring was carried out with initial feedback sent to the Control Bodies. After verification the results confirmed compliance with the emission limits, with values in line with historical data.
Paliano (UL2): on 19 June 2019 the results of the characterization activities of the former purification plant area were submitted to the Ministry, with a concurrent request for clearance for demolition. Based on an analysis of the above results, the Ministry requested a communication to the Entities pursuant to art. 245 of Italian Legislative Decree no. 152/06 (CSC breaches by a non-responsible party). On 3 September 2019 the aforesaid communication pursuant to article 245 of Italian Legislative Decree no. 152/06 was sent to the various Entities, as requested by the Ministry.

On 20 December 2019 the Ministry of the Environment sent the results of the sampling carried out by ARPA Lazio, based on which breaches of the CSCs in the soil and groundwater were confirmed for some parameters.

Based on the results of the sampling and analysis carried out by both Acea Ambiente and ARPA Lazio, and based also on what was reiterated by the Ministry of the Environment, the procedures that will make it possible to carry out treatments in situ are being verified. In parallel, sampling and analysis will be carried out on the remaining area of Castellaccio, already defined in the Ministry of the Environment's decree. At present, work has begun on the preparation of the reclamation project.

San Vittore del Lazio (UL3): the waste-to-energy plant is destined for the production of electricity from renewable sources, and in particular from RDF produced by the treatment of urban waste exclusively from the territory of the Lazio Region. During the year the three lines of the plant guaranteed regular operation in terms of operating hours, which were higher than expected. Although production was lower, revenues from electricity benefited from CIP6 tariffs until 13 July 2019.

It should be remembered that the San Vittore plant is now the only waste-to-energy plant on a regional scale and represents a strategic terminal for the waste chain.

By Order of the President of the Lazio Region no. Z00001 of 5 July 2019 concerning "Ordinance pursuant to art. 191 of Italian Legislative Decree no. 152 of 3 April 2006 to ensure the restoration of waste collection in Roma Capitale", in order to ensure the treatment phase of the waste management cycle Acea Ambiente Srl was ordered, among other things, to carry out the following activities with regard to the San Vittore del Lazio waste-to-energy plant, to operate with immediate effect at the maximum authorised treatment capacity on a daily basis, guaranteeing treatment even on public holidays according to the requests that AMA SpA would subsequently formalise, guaranteeing the services established by the BATs for the sector at the minimum established in the various treatment flows.

In addition, the aforementioned Ordinance directly ordered the Company to postpone all scheduled maintenance beyond the 32nd week, taking into account the typical decline in waste production in August.

The effects of the Ordinance therefore led to the postponement of the maintenance of the three lines, initially scheduled for the month of July, to after 12 August. This postponement had a negative impact on the treatment capacity and electricity production of the three lines, with particular reference to Line 1 and Line 3, which suffered the postponement of boiler cleaning and air condensers and, only for Line 3, the replacement of the boiler superheater banks.

The content of Ordinance no. Z00001, set to expire on 30 September 2019, was subsequently renewed

with Ordinance no. Z00002 of 30 September 2019 extending the expiry to 15 October 2019.

Finally, it should be noted that, with regard to the San Vittore del Lazio waste-to-energy plant, the new Ordinance no. Z00003 of 27 November 2019 proposed operating with immediate effect at the maximum authorised treatment capacity on a daily basis, guaranteeing treatment even on public holidays until 15 January 2020, as requested by AMA SpA.

On 23 May 2019 a new Agreement was signed with the Municipality of San Vittore del Lazio governing the relationship between the company and the Municipality until 31 December 2019, including payment for the so-called externalities arising from the plant's operation, pending the signing of the final Agreement and, in any case, under an extension until 31 December 2021. This Agreement also constitutes a settlement of current disputes between the parties relating to fees and settlements of pending litigation as well as any tacit settlement of charges and collection premiums for the year 2018 and for the first half of 2019.

As a result of the new public tender that went without bids for the service of transport and recovery/disposal of bottom ash, fly ash and PSR produced by the plant, in June 2019 the service was extended by private negotiation with the outgoing company until 31 March 2020.

Following the launch of the VAS procedure for the new Regional Waste Plan on 6 August 2019, Acea Ambiente submitted comments aimed at better configuring the fourth line that the Waste Plan envisages for the San Vittore site.

Orvieto (UL4): during the period, the supply of non-hazardous urban and special waste continued, implementing the recovery and disposal activities according to the terms provided for therein. On 13 September the contract was also awarded for the construction of the front capping of step 9 of the landfill in operation. The handover of the works for the start of the site is currently being planned.

On 28 August 2019, in order to optimise plant performance in terms of odour, Acea Ambiente submitted to the Umbria Region a non-substantial amendment request pursuant to art. 29-nonies of Italian Legislative Decree no. 152/2006 for the installation of a concentrated aspiration system and subsequent collection of the extracted air to the air treatment system serving the quality waste treatment and composting plant. To date, the Umbria Region has not yet responded to the request.

On 12 November 2019 Acea Ambiente also presented a revision of the Economic and Financial Plan (EFP) to the AURI of Umbria for the revision of the tariffs established in the resolution.

AURI, by Resolution of the Conference of Mayor no. 16 (Resolution no. 16 AURI) of 3 December 2019, approved the tariffs referred to in the aforementioned EFP but just for the years 2019 and 2020, concurrently acknowledging that these tariffs must in any case be considered provisional since the definitive ones will be those that the AURI will determine as a result of the proceedings initiated by Resolution no. 225/2018/R/Rif (approval of the "Integrated Waste Management Service Tariff Method 2018-2021"), and that therefore the tariffs in question would in any case be subject to adjustment.

With a note dated 6 December 2019, AURI then proposed – pending approval of the Area Plan – the planning of urban waste flows to treatment, recovery and disposal plants for the year 2020.

Monterotondo Marittimo (UL5): with reference to the activities of the plant, on 31 December 2017 the delivery of waste was interrupted in order to proceed with revamping and expansion. During the month of May 2018, construction activities began for the construction of the new plant, and during June 2018 the works were handed over definitively.

On 13 September 2019, in compliance with the provisions of the current IEA, a communication was sent to the Tuscany Region for the start of organic waste transfers from 14 October 2019, with a description of the various phases of plant activation, and on 18 September 2019, in response to further requests from ARPAT, the confirmation of the plant start-up calendar was communicated to the Tuscany Region.

The transfer of woody materials began on 22 October 2019, while on 31 October 2019, in compliance with the IEA's requirement, the certificate of completion of the work necessary for the start of the transfer of organic waste – which began on 4 November 2019 – was submitted. The first parallel with the electricity grid took place on 5 December 2019.

Sabaudia (UL6): with regard to the composting section of the Sabaudia plant, the Integrated Environmental Authorisation issued by the Lazio Region on 1 December 2008 is still being renewed. In any case the IEA was formally extended by the Lazio Region pending the conclusion of the authorisation process. During the IEA review process, the Province of Latina requested the acquisition of the water authorisation. Acea Ambiente obtained the authorisation under the PAI from the Lazio Region and a favourable opinion for the water concession of areas belonging to the water/fluvial state property from the Consorzio di Bonifica dell'Agro Pontino.

On 27 November 2019 the Province of Latina issued the state concession/authorisation for water alone.

In order to comply with the requirements of the state concession, it will be necessary to carry out certain projects that will make it necessary to temporarily interrupt waste management in order to avoid interfering with the work. A suspension of deliveries was implemented starting 31/10/2019. Operationally, with the temporary suspension of the deliveries, it is expected that the last composting cycles will end by February 2020 and then the work necessary to comply with the requirements of the Water Opinion can begin, which is expected to take at least 9-10 months.

Aprilia (UL7): The plant is authorised for operation with an Integrated Environmental Authorisation issued by the Lazio Region with DD no. G08408 of 7 July 2015 and subsequent amendments.

On 14 December 2017 an emergency preventive seizure order was issued for the entire composting plant currently in operation due to the results of an inspection by the controlling authorities that found the presence of potent miasmas emitted by the production.

By order of the Public Prosecutor's Office of the Republic of Latina of 10 April 2018, the plant was granted provisional use of the facility with authorisation to restart the deliveries in a temporary manner and with strict limitations and prescriptions. The Lazio Region initiated the procedure for the review of the current authorisation, and on 16 January 2019 the first session of the services conference was held, and the second session was held on 28 June 2019.

On 23 July 2019 the Company submitted all the additional/replacement documentation requested. The Lazio Region convened the third session of the services conference on 24 September, subsequently postponed to 1 October.

During the session of the services conference, in order to accelerate the construction of the emission chimneys, i.e. the work proposed voluntarily by Acea Ambiente with which the biofilters will be completely closed and the air conveyed at high into the air through expulsion chimneys, the Lazio Region decided to send a request for a non-substantial change to the IEA.

The design documentation was promptly delivered on 7 October 2019. The Lazio Region authorised the above non-substantial amendment. The Company immediately worked to identify the supplier, both for the executive design and for the construction of the three chimneys.

During the period of reference the plant operated, without prejudice to the seizure with right of use which was otherwise regulated during the current year.

With regard to the new anaerobic digestion plant section, the work was completed on 19 November 2019 with the drafting of the Mechanical Completion. A punch list was drawn up with secondary works still to be completed.

With a note dated 4 December 2019, the Lazio Region sent the acknowledgement of the test certificate. It was therefore possible to start provisional operation of the plant. Then the sorting/pre-treatment line was started and the digesters were loaded with waste and inoculum according to a loading plan provided by the supplier.

On 20 December 2019, once all technical and administrative activities were completed with the grid operator, the first parallel with the electricity grid was carried out. The plant thus formally commenced operations on that date.

Bioecologia: the company carries out purification, treatment and intermediation of liquid waste in the plants located in Le Biffe, Pianino and ex Comova. During the year, the services provided for in the contracts entered into with the operators of the integrated water service for the purification of urban wastewater in the Municipalities of Chiusi, Buonconvento and Colle di Val d'Elsa were regularly carried out, performing the treatment of special non-hazardous waste at the Chiusi Scalo and Buonconvento plants in compliance with the IEA's requirements. In 2019 no non-conformities regarding tax, environmental and occupational safety issues emerged. The technical management of the plants and the performance of the purification and waste treatment services have been strongly conditioned by the good working order of the machines and equipment, and for this reason maintenance and modernisation works are under way and/or planned for the near future, aimed also at improving the efficiency of the current plant. Works were planned so as not to interrupt the service of reception and treatment of liquid waste. In order to ensure the above, taking into account that only the treatments lines are affected by the works at the Chiusi site, in order to guarantee the continuity of the liquid waste reception service, albeit for volumes lower than the nominal capacity of the plant, it was necessary to set up a temporary mobile department for mechanised grating and desanding of the waste using rented specialised equipment. The mobile plant was then equipped with a deodorisation unit to deal with possible odorous emissions.

With regard to the volumes of waste treated at the Chiusi Scalo plant, the quantity processed during 2019 was 69,258 tonnes. In spite of the restrictions due to the works on the plant, it should be pointed out that during the year the service for the receipt of liquid waste was never interrupted, also ensuring the maintenance of the urban wastewater purification service in the Municipality of Chiusi.

Lastly, during the year applications for the review and renewal of integrated environmental authorisations (IEAs) for the Chiusi and Buonconvento plants were prepared and submitted.

Aquaser: mainly operates, as a joint venture, as a waste intermediary with its Customers/Shareholders belonging to the Acea Group. During 2019, the company consolidated its market position by strengthening its transport activities through the acquisition of vehicles and personnel that now allow the management, at least partially, of the corresponding services.

Aquaser currently wholly or partially performs the service of loading, transport and recovery/disposal of waste from water purification for the companies of the Acea Group.

Iseco: operates in the Water Business, whose main activities are the management, maintenance and construction of plants, and the Milk - Dairy Business, whose main activities are the production of whey powder and the sale of related products for zootechnical and food use and the processing of seroderivatives on behalf of third parties.

Acque Industriali: through the management of specific platforms, provides intermediation and liquid waste treatment services to private companies operating both regionally and nationally, as well as activities collateral to those of the integrated water cycle consisting mainly in the recovery and disposal of biological sludge.

The Company carries designs and builds plants mainly related to the treatment of wastewater and sludge and waste in general, as well as the treatment of atmospheric emissions, following up with their subsequent ordinary and extraordinary management, as well as carrying out design, direction and execution of works in the field of environmental remediation of polluted sites, mainly in the industrial sector. It also performs research and development in the sectors of reference in partnership with research bodies at both a regional and national level.

Demap: carries out its activity in the field of sorting plastic packaging from urban waste collection. It is one of the 30 or so Selection Centres that have an agreement with the Corepla consortium, established by law pursuant to Italian Legislative Decree 22/97 and now regulated by Italian Legislative Decree 152/06, responsible for achieving the recycling and recovery targets for plastic packaging of consumed products.

Separate collection of plastic packaging is regulated at a national level by a framework agreement between Anci and Conai and by the technical annexes concluded between Anci and the individual value chain consortia which, in the case of plastic packaging, provide that collection may be transferred to the sorting centre either selectively (mono-material collection) or jointly (multi-material collection). Demap carries out its business in compliance with current regulations and is authorised under Italian Legislative Decree 152/06 with procedure issued by the Province of Turin no. 133-25027/2010 of 23 June 2010.

In 2019 the Company regularly performed the services envisaged in the contracts stipulated with Corepla and with the multi-material suppliers, with which the company has a private business relationship. In 2019 a total of 60,804 tonnes of incoming goods were processed, an increase of approximately 2.7% compared to the previous year.

Berg: operates in the environmental services sector and in particular in the treatment of liquid and solid waste. Pursuant to article 2428 of the Italian Civil Code, it should be noted that the activities are carried out at the Frosinone plant, where the Storage and Treatment of Hazardous and Non-Hazardous Liquid and Solid Waste is carried out.

In 2019 the plant confirmed its Structural Solidity by almost completely processing the quantity authorised, i.e. 143,000 tonnes per year of liquid waste.