Policy instruments for a circular economy and environmental protection both target sustainable development, but do not necessarily share the same objectives. The purpose of the paper is to evaluate the coherence with the circular economy principles recognized by the EU Taxonomy of a large set of subsidies currently in force in Italy: those listed in the Italian Catalog of subsidies harmful to the environment and subsidies favorable to the environment . The method is inspired by the OECD Checklist and the ‘Policy Coherence for Sustainable Development’ approach recommended by the United Nations 2030 Agenda, which can be usefully applied to all policy instruments, including subsidies and ‘green’ public budget. The analysis identified—out of approximately 170 subsidies examined—56 subsidies potentially harmful to the circular economy in Italy, for a total financial value of at least EUR 13.5 billion in 2019, and 75 subsidies potentially favorable for the circular economy, for a total of at least EUR 13.0 billion. Of the total incentive schemes analyzed from a circular economy perspective, 25% highlighted effects in conflict with the results of the Catalog obtained from an environmental perspective. The results of the study underline the importance of coordination between environmental and circular economy policies in achieving sustainable development goals. The analysis can be considered a ‘pilot study’ of a national case; the method can be easily replicated by public administrations also in the ex ante assessment of new subsidy schemes.