Energy transition regulation

The role of regulation in energy transition

Decarbonising the economy is essential. We need a structural change in the energy model and a transformation in the way we produce and consume. This challenge requires the energy transition to be placed at the heart of economic policy strategies and the fight against climate change. This process will make possible an economy with more sustainable primary energy sources with low greenhouse gas emissions, especially CO₂. 

The strategy of decarbonisation and the fight against climate change requires a framework for action based on energy and climate policies, with a regulation that establishes the rules that will allow us to achieve the climate objectives.

Regulation at European level

The European Union has set up its own regulatory framework by implementing directives, regulations and specific standards to achieve an integrated energy market that guarantees the security of supply, sustainability of the sector, and a fair energy transition for all.

In its commitment to lead the fight against climate change at a global level, the EU already presented in 2007 the first climate and energy goals, based on three main pillars: the reduction of greenhouse gas (GHG) emissions, the deployment of renewable energy and energy efficiency. 

This package of measures represented the beginning of a new chapter in European climate and energy policies and has set the course for the strategic design of new packages of measures in the medium and long term (the 2030 Framework on Energy and Climate, the Roadmap towards a decarbonised and competitive economy in 2050, the Long-term Strategy for a more sustainable planet for all, as well as the recent European Green Deal). 

Europe wants to be a pioneer in all these areas and, now that the inevitable energy transition is a reality, aspires to occupy leading positions in all these areas.

What are the European Union's energy and climate goals for 2030?

The European energy and climate goals for the period up to 2030 include: 

• A 55% reduction in greenhouse gas emissions compared to 1990, 
• A 32% share of renewable energies in the total gross final energy consumption, and 
• A 32.5% improvement in energy efficiency. 

So far, the European Commission has already published five major legislative packages in its commitment to reduce net greenhouse gas emissions and achieve energy and climate targets. 

The directives establish the basic aspects that all EU countries must comply with, but each country has to develop its own national laws to achieve the goals.  On the other hand, the regulations are directly applicable.

What legislative package should facilitate the achievement of the 2030 goals?

The "Clean Energy for All Europeans" package, announced in 2016, brings continuity and certainty to the European energy and climate goals for 2030 by developing four interconnected directives and four regulations. The directives refer to renewable energy, energy efficiency, energy efficiency of buildings and electricity, while the four regulations are on governance, risk preparedness, electricity market design and cooperation of energy regulators. This regulatory framework once again reinforces the European Union's upward direction towards sustainability. 

What is the European Green Deal?

The European Green Deal is the new growth strategy proposed by the European Union in December 2019. It is a roadmap that aims to modernise the European economy, making it more competitive, equitable, resource-efficient and climate-neutral by 2050. The European Green Deal action focuses on several priority areas: promoting affordable, secure and clean energy based on renewable sources, green, circular and environmentally friendly industry, energy-efficient buildings, sustainable and smart mobility or more environmentally friendly agriculture and food production systems. All this while also protecting biodiversity and ecosystems. 

The European Green Deal is positioned as one of the pillars in the European Commission's Recovery Plan design in response to the COVID-19 health crisis.

What does the "Fit for 55" package consist of?

Making Europe the first climate-neutral continent by 2050 requires major efforts. Thus, as an intermediate step towards climate neutrality, the European Commission presented the "Fit for 55" package of measures in the summer of 2021. This initiative aims to reduce net greenhouse gas (GHG) emissions by at least 55% by 2030, compared to 1990 levels. 

"Fit for 55" is a set of proposals to review and update EU legislation and ensure that policies are aligned with climate and energy objectives. The package of measures includes concrete actions, such as the application of CO₂ emissions trading (carbon markets) to new sectors and the tightening of the current system, increased use of renewable energies and greater energy efficiency, use of greener fuels in transportation, measures to prevent carbon leakage, as well as changes in the taxation of energy products.

What institutional framework do we have in Spain?

The European Union's energy and climate criteria directly affect the policies of the Member States. Regarding Spain, the "Strategic Framework for Energy and Climate: a proposal for Spanish modernisation and job creation" was presented at the beginning of 2019. Under European guidelines, which in turn respond to the commitments made in the 2015 Paris Agreement, this document is based on three fundamental pillars: the Climate Change and Energy Transition Act, the National Integrated Energy and Climate Plan 2021-2030 (PNIEC) and the Fair Transition Strategy. 

At the same time, to continue on the path towards a low-carbon economy, the Spanish Government approved the long-term decarbonisation strategy, which will enable a 90% reduction in greenhouse gas emissions by 2050 compared to 1990.

What is the Climate Change and Energy Transition Act?

Since 2021, Spain has had the first Climate Change and Energy Transition Act, establishing the regulatory and institutional framework for achieving climate neutrality. This Act defines quantified greenhouse gas (GHG), renewable energy and energy efficiency goals for the year 2030 and thus complies with international commitments.

What is the National Integrated Energy and Climate Plan (PNIEC)?

The National Integrated Energy and Climate Plan (PNIEC) defines the policies and measures needed to achieve the goals set out in the Climate Change and Energy Transition Act. In particular, it provides for a 42% increase in renewable energy penetration by 2030, a 23% reduction in greenhouse gas emissions, a 39.5% improvement in energy efficiency and reaching the threshold of 74% renewable energy in electricity generation.

What is the Fair Transition Strategy?

It is the instrument that is used to identify the groups, sectors, companies correctly, and territories potentially most affected by the decarbonisation process, to detect opportunities for the creation of economic activity and green employment, and to monitor the labour market in the framework of the energy transition.