Approved Climate Change Law: these are the most important measures

Congress has given the green light to the Climate Change Law, a package of rules with which Spain will try to reduce its dependence on fossil fuels and the emission of greenhouse gases. Below we review some of the most important measures it contemplates.

In the absence of its ratification in the Senate, it can almost be said that the Climate Change Act is a fact. The Congress has approved its implementation, with the votes against VOX and the abstention of the Popular Party (PP).

This Law should serve for the country to fulfill its international commitments in the fight against global warming, with its most ambitious goal being to achieve climate neutrality in 2050. Until that date, a series of intermediate milestones that should have been reached by 2030 are established:

– Reduce greenhouse gas emissions by at least 23% compared to 1990

– Achieve a penetration of renewable energy in final energy consumption of at least 42% (compared to about 20% currently)

– Achieve an electricity system with at least 74% generation from renewable energies (compared to 40% at this time)

These targets will be revised upwards periodically, the first revision will be in 2023.

Mobility in the Climate Change Law

Among all the measures contemplated by the Climate Change Law, those related to mobility have a priority space.

Currently, almost 30% of Spain’s greenhouse gas emissions come from transport. To achieve climate neutrality by mid-century, it is essential to reduce emissions from vehicles in circulation, for this, the new law contemplates the prohibition of selling new combustion vehicles, not intended for commercial uses, from 2040.

In addition, all municipalities with more than 50,000 inhabitants must adopt sustainable mobility plans that, among other things, include low-emission zones. The Government plans, in addition to approving a sustainable mobility law, to present shortly a package to boost the electric car and install recharging points.

Electricity sector

14% of Spain’s greenhouse gas emissions come from the electricity market. The figure has fallen in recent years thanks to the closure of coal plants and the increase in the use of renewable energy. But more needs to be done.

The Climate Change Law contemplates doubling in 2030 the share of renewables of electricity generation in Spain to reach 74%. And it sets as a goal by 2050 that 100% of electricity generation is renewable.

There are four measures proposed to achieve this:

– The Government and the National Commission on Markets and Competition must submit within a maximum period of 12 months after the approval of the law a proposal for reform of the electricity sector

– Reversible hydroelectric power plants (those that work with a water pumping system that allows electricity to be generated at the time it is needed) will be promoted. And electricity generation will also be boosted through urban supply and sanitation systems.

– The Horizontal Property Law will be amended within one year to facilitate photovoltaic installations for self-consumption in the communities of owners

– In addition, the law advocates making the implementation of new renewables “compatible with the conservation of natural heritage”. To avoid the worst impacts of the installation of large wind and solar farms, the Government will develop a zoning of sensitive areas in which projects of this type cannot be carried out.

Dependence on fossil fuels

Once the new law enters into force, new exploration and hydrocarbon extraction projects in Spain will be prohibited. Regarding research permits and concessions for the exploitation of hydrocarbon deposits that are already in force, “they may not be extended, in any case, beyond December 31, 2042.”

Efficiency and rehabilitation of buildings

Regarding energy efficiency, the main measures are concentrated in the field of energy rehabilitation of buildings, another key segment in the economic reactivation that, in addition, is a pillar of the fight against energy poverty. According to the project, the Government will promote and facilitate the efficient use of energy and the use of renewable sources in building, aligning the Long-term Strategy for the renovation of buildings with the objectives of successive NECP.

To attract resources towards energy efficiency actions, the project extends until 2030, in accordance with the provisions of the new Energy Efficiency Directive, the Energy Efficiency Fund, which has allowed to mobilize more than 1,000 million euros in the last five years.

Financing the Climate Change Act

The project establishes that a percentage of the General State Budgets will be used to contribute to the objectives in terms of climate change and energy transition. The amount will be equivalent to that agreed in the Multiannual Financial Framework of the European Union and will be revised upwards by the Government before 2025.

Proceeds from auctions of greenhouse gas emission allowances will also be used to meet climate change targets. Specifically, at least 450 million will be allocated each year to finance the costs of the electricity system related to the promotion of renewable energies. Up to 30% may be allocated to measures with social impact, to alleviate situations caused by the transition to a decarbonized economy, or related to vulnerability to the impacts of climate change.

Similarly, and as part of the mobilization of resources towards climate action, environmental criteria will be incorporated into public procurement, and the General State Administration will not be able to extend lease contracts beyond 2030 in properties that have almost zero energy consumption.

As a learning and transparency tool to help improve investment decisions, the PLCCTE provides that listed companies, credit institutions, insurers and reinsurers prepare an annual report on the exposure of their activity to the risks of climate change and the measures adopted. In addition, financial institutions will publish specific decarbonization targets for their loan and investment portfolio aligned with the Paris Agreement from 2023.

In the same vein, the Bank of Spain, the National Securities Market Commission and the Directorate-General for Insurance and Pension Funds will jointly prepare, every two years, a report on the assessment of the risk to the Spanish financial system arising from climate change and the policies to combat it. It shall be referred to the Congress of Deputies.

Source: EnergyNews