Climate Change Law
The Ecological Transition and Demographic Challenge Commission of the Spanish Parliament approved the Climate Change and Energy Transition Bill at the beginning of the month. It has now been sent to the Senate for final approval.

This is a Framework Law for the fulfilment of the obligations assumed by the States that signed the Paris Agreement in 2015: to keep the increase in global average temperature below 2°C compared to pre-industrial levels, and even if possible, below 1.5°C. The Intergovernmental Panel on Climate Change (IPCC) has already pointed out in its latest report that, at the current rate, a rise of 1.5°C will be reached between 2030 and 2052. In the case of Spain, this temperature increase is almost 0.5°C above average.

Therefore, the targets set out in the Law mark a floor on which only improvement is possible (the establishment of more restrictive targets) and represent a considerable advance on the current reality of “climate emergency“, as already declared by the Council of Ministers in 2020, when the draft was sent to Parliament.

The keys to this law are the reduction of greenhouse gas emissions in all sectors of the national economy, the achievement of an electricity system with 100% renewable sources, the promotion of energy efficiency and the rehabilitation of buildings, the deployment of electric vehicles and the end of polluting cars, the establishment of fair transition objectives and actions to better channel the European Recovery Funds.

The essential objective is to reach climate neutrality as soon as possible, with a horizon of 2050. Some of the percentage targets it sets for 2030 are as follows:

  • Reduce greenhouse gas emissions of the Spanish economy as a whole by at least 23% compared to 1990.

  • Achieve a penetration of renewable energies in final energy consumption of at least 42%.

  • Achieve an electricity system with at least 74% renewable generation.

  • Improve energy efficiency by reducing primary energy consumption by at least 39.5% compared to the base year in line with EU standards.

Although the intermediate targets have been increased by a few percentage points since the text the government sent to Congress in May 2020, some groups consider these targets to be unambitious and insufficient. The text provides for the possibility for the Council of Ministers to revise (upwards) the targets for 2030. The first review will be implemented in 2023, which will allow for strengthening and accelerating or correcting, setting more ambitious targets.

The following are some of the main points of the Law.


Renewable energy and energy efficiency

One of the most ambitious objectives is to ensure that the entire Spanish electricity system is made up of 100% renewable energy sources by 2050.

To this end, measures are incorporated to facilitate the integration of this type of energy. However, ambitious targets for the integration of renewables must necessarily be accompanied by measures to address the intermittency and non-manageability intrinsic to non-storable primary energy sources.

Some of these measures are as follows: The aim is to facilitate the integration of self-consumption, considered as a tool to accelerate the deployment of renewable energies and distributed generation; the hybridisation of installations and their repowering is promoted to optimise the renewable resource of the sites, minimising costs and environmental impact; priority is given to non-flow hydro technology, and specifically, reversible hydroelectric plants; importance is given to storage systems in general, not necessarily hydro, which constitute a valuable tool for maximising the integration of renewable energies in a flexible manner; the legal inclusion of the figure of “storage” is sought, and it is considered that some of these types of storage can become a less aggressive resource for the environment than investment in electricity grids.

In addition, for the first time, the figure of the independent aggregator is officially instituted, who will participate in the market by buying or selling different aggregate consumption or electricity generated by the so-called “prosumers”, who are both consumers and producers of energy.

The Law also addresses specific issues regarding the financial aspect of renewables, such as providing greater flexibility for new concessions to establish mechanisms that allow for the integration of renewables.

In terms of energy efficiency, priority is given to the refurbishment of buildings and the fight against energy poverty, for which the Housing Refurbishment and Urban Renewal Plan will be established. This is intended to meet the objectives of the successive National Integrated Energy and Climate Plans.

Energy transition and fuels

By 2050, fossil fuels and nuclear energy are to be completely phased out.

To this end, fossil fuel subsidies will be ended. As of the entry into force of this law, no new authorisations for exploration, hydrocarbon research permits or exploitation concessions will be granted in national territory. This includes fracking.

No new applications shall be accepted for the granting of exploration permits, research permits or direct exploitation concessions or extensions for radioactive minerals on nuclear energy, where such resources are extracted for their radioactive, fissile or fertile properties.

However, despite their harmful effects on the environment – with the exception of green hydrogen – the government will encourage the penetration of renewable gases, including biogas and biomethane and other alternative fuels, as long as only renewable energy is used in their manufacture, or if they allow the reuse of organic waste or by-products of animal or vegetable origin.

Annual targets will be set for the integration of renewable energies and the supply of alternative fuels in transport, especially advanced biofuels and other renewable fuels of non-biological origin.

For air transport, annual biofuel supply targets will be set, with particular emphasis on advanced biofuels and biofuels from renewable non-biological sources.

Mobility, transport and air quality

The aim is to achieve a zero direct emissions fleet of passenger cars and light commercial vehicles by 2050, with combustion cars being phased out of the market by 2040.

To this end, the necessary measures shall be taken, in accordance with European Union legislation, to ensure that new passenger cars and light commercial vehicles, excluding those registered as historic vehicles, not intended for commercial use, gradually reduce their emissions so that by 2040 at the latest they are vehicles with emissions of 0 g CO2/km established in accordance with Community legislation.

With regard to urban mobility, it is proposed that low-emission zones be created for municipalities with more than 50,000 inhabitants and also in island territories, no later than 2023.

With regard to electric vehicles, the deployment of this fleet is encouraged, as well as an infrastructure of recharging points and the creation of an information platform on recharging points is proposed by the government.

In addition, the Technical Building Code will establish the obligation to install recharging points in new buildings and interventions in existing buildings.

Air and maritime transport is expected to reduce its emissions. The objective of zero direct emissions when ships are moored or anchored in State ports by 2050 is set. To this end, among other measures, the articulation and consolidation of sustainable logistics chains with origin or destination in ports will be promoted in order to reduce emissions.

Adaptation to climate change

This draft law is the first time that a law incorporates the need to activate policies for adaptation to the effects of climate change and the systematic assessment of climate risk. In this respect, key areas are identified as hydrological, coastal, territorial and urban, public health, urban development, building and transport infrastructure, agriculture, forestry and biodiversity conservation.

Fair transition measures

Likewise, this Law is also a pioneer in talking about a fair transition to new models of sustainability. The Law establishes that a Fair Transition Strategy will be published every five years, addressing issues such as the cessation of domestic coal production and the relocation of affected workers.

New reporting obligations are also proposed to avoid financial risks: the content of the non-financial reporting obligations of listed companies is clarified in order to incorporate information regarding the level of exposure to climate and carbon risks and the strategies and objectives for their mitigation. Therefore, it is foreseen that the Law will oblige companies to calculate and make public their carbon footprint and create plans for the reduction of their emissions.

Similarly, the electricity sector will also have to present a decarbonisation strategy.


Environmental education, research, industry 4.0 and governance

With regard to education, environmental education will be included in the curricula and new financing strategies for R&D&I will be proposed. Another of the priority lines is the promotion of the digitalisation of the Spanish economy, as a tool on the road to decarbonisation.

In the area of governance, citizen participation is promoted, and to this end, the creation of an independent Committee of Experts on Climate Change and Energy Transition is proposed, responsible for evaluating and making recommendations on energy and climate change policies and measures, including regulations.

Financial support to combat climate change

The bill establishes that a percentage of the General State Budget will be earmarked to contribute to climate change and energy transition objectives. The amount will be equivalent to that agreed in the European Union’s Multiannual Financial Framework and will be revised upwards by the government before 2025.

Revenues from the auctioning of GHG emission allowances will also be used. At least 450 million will be used each year to finance electricity system costs related to the promotion of renewable energies. Up to 30% may be allocated to measures with a social impact, to alleviate situations caused by the transition to a decarbonised economy, or related to vulnerability to the impacts of climate change.

Similarly, environmental criteria will be incorporated in public procurement, and the General State Administration will not be able to extend leases beyond 2030 in buildings that do not have near-zero energy consumption.

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This new Climate Change and Energy Transition Law is aligned with the European Green Deal and the European Decarbonisation Strategy to 2050. In this respect, both this Law and the National Integrated Energy and Climate Plan are two of the main pillars of the Strategic Energy and Climate Framework for the period 2021-2030. These instruments are complementary and coherent with each other: while the Law establishes the institutional framework to set the country’s direction towards climate neutrality, the National Integrated Energy and Climate Plan is a revisable planning instrument that defines the targets for greenhouse gas emission reductions, renewable energy penetration and energy efficiency, as well as the lines of action and the path to achieve them that, according to the models used, is the most appropriate and efficient.