What Does the Law Establish for the green revolution?

The Spanish Ecological Transition Law came into effect in May 2021 with the aim of promoting the transition towards a more sustainable economy and reducing the environmental impact of human activities.

This law establishes a series of measures to encourage the use of renewable energies, improve energy efficiency, reduce greenhouse gas emissions, and promote the circular economy.

In this article, we will analyse in detail what the law says, how it affects companies, and the actions that can be taken to comply with the law.

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What does the law establish?

The objective of this law is to address the challenges of climate change and the transition towards clean and renewable energy in Spain. If you want to read the complete law, you can do so at this link.
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The law seeks to achieve the following objectives by 2030:

• A reduction of at least 23% in greenhouse gas emissions compared to 1990 levels.
• A penetration of at least 42% of renewable energy in final energy consumption.
• At least 74% of electricity generation to come from renewable sources in the electricity system.
• A decrease of at least 39.5% in primary energy consumption with respect to the baseline according to community regulations.

The Law lays the foundations for the achievement of its objectives and compliance with commitments acquired through strategic planning, which at the national level is materialized first in the Integrated National Energy and Climate Plan (PNIEC), a tool that will serve to integrate the objectives and quantitative contributions to be achieved by all economic sectors in different areas, as well as the policies and measures to be adopted to achieve these objectives.

The first of these plans covers the period 2021-2030 and outlines an ambitious horizon, including the objectives set out in Article 3 of the Law.

The second major climate action instrument envisaged is the Decarbonisation Strategy by 2050, which will establish a path for reducing emissions and increasing absorptions by sinks in all economic sectors with a long-term horizon. This strategy will be reviewed every five years and will be essential for the fulfilment of the objectives set by the European Union.

Likewise, the approval of (i) National Plans for Adaptation to Climate Change, aimed at mitigating and predicting the risks derived from climate change; and (ii) Just Transition Strategies and Conventions is foreseen, in order to ensure equality and solidarity among territories and people.

Which companies are affected by the climate change and energy transition law?

The Spanish Ecological Transition Law establishes that companies that carry out economic activities that have a significant environmental impact are obliged to comply with it. Specifically, those who carry out activities included in section C (divisions 10 to 32) of the National Classification of Economic Activities (CNAE 2009) are defined as obligated to comply with the law. These activities refer to the production and supply of energy, extraction and transformation of minerals, manufacture of chemical products, rubber and plastic products, glass products, metallurgical products, computer, electronic and optical products, among other activities.

Additionally, the law also establishes that large energy consumers, i.e., those who consume more than 500 tonnes of oil equivalent per year, must comply with the energy efficiency measures established by the regulation.

In summary, the law has a broad focus and includes all companies and economic activities that generate a significant environmental impact, regardless of their size or sector.

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If your company meets any of these requirements, it is obliged to comply with the legislation.