Climate Change and Energy Transition Law approved
How it affects organisations.
Spain already has the first regulation to mitigate global warming. This is Law 7/2021, of May, on climate change and energy transition.
The document responds to different international initiatives (such as the Paris Agreement of 2015, the Agenda 3030 for sustainable development of 2015 and the European Green Pact of 2109) focused on reducing greenhouse gas emissions and avoiding the increase in global temperature. Undoubtedly, one of the main challenges facing humanity at this time. The law establishes two basic objectives to be achieved by 2050 in Spain:
- Climate neutrality, i.e. that the volume of greenhouse gases emitted is equal to the absorption capacity of these gases by natural sinks (trees, etc.).
- Electricity system exclusively from renewable generation sources.
In order to achieve them, the document specifies minimum targets to be met by 2030:
- To reduce greenhouse gas emissions in the Spanish economy as a whole by at least 23% compared to 1990.
- To achieve a penetration of renewable energy sources in final energy consumption of at least 42%.
- To achieve an electricity system with at least 74% of generation from renewable energy sources.
- Improve energy efficiency, reducing primary energy consumption by at least 39.5%.
Some of the measures included in the law to achieve the aforementioned objectives are:
- Goodbye to polluting cars: from 2040, cars and light commercial vehicles (as long as they are not used for commercial purposes) that emit CO2 will no longer be sold and in 2050 no vehicle that generatesCO2 emissions will be allowed to circulate.
- A ban on granting new authorisations for the exploration or exploitation of fossil fuels, including fracking, as well as mines and radioactive minerals.
- Obligation for municipalities with more than 50,000 inhabitants to have low-emission zones.
- Deployment of a network of electric recharging points at petrol stations.
- Reduction of emissions in maritime transport and ports.
- Promotion of renewable gases (hydrogen, biogas, etc.).
In addition to these key points, the law incorporates two new requirements for certain organisations.
Firstly, the reporting obligation for listed companies, credit institutions, insurance and reinsurance companies and companies that are obliged to prepare the non-financial information statement provided for in Royal Decree 1/2010 (from 2022, companies with more than 250 employees). Specifically, the law requires the aforementioned organisations to report on:
- The risks and opportunities associated with climate change that may affect its activity.
- The financial impact of these risks.
- The measures taken to mitigate these risks.
- The objectives and metrics used to assess and manage the risks.
Finally, the document foresees that some companies calculate and publish their carbon footprint, i.e. the volume of greenhouse gas emissions generated by their activity. Specifically, the text establishes that, within one year of the entry into force of the law, the government will establish the typology of companies with activities in the national territory that will be subject to this obligation.
The approval of Law 7/2021 is a first step towards modernising the production model and the energy system and generating new socio-economic opportunities. Its application will require the commitment of all of us, as a society, to fight effectively against climate change.
The AddVANTE sustainability team is at your disposal for any clarification, doubt or support in complying with these new requirements.