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Spain becomes fourth EU country slapping ban on new fossil fuel production

21 May 2021 Cristina Brooks

Spain plans to put an end to domestic fossil fuel production by 2050 as part of its long-awaited national net-zero plan.

The country's lower parliamentary chamber, the Congress of Deputies, followed the Senate in passing the Law on Climate Change and the Energy Transition (Climate Change Law) on 13 May.

Sustainability and resilience have been put in sharp relief by severe weather in Spain, for example record rainfall during Storm Gloria last year and record snowfall during Storm Filomena in January, Minister for the Ecological Transition Teresa Ribera told the Congress of Deputies on the day the vote took place.

While the law surpasses the ambitions of EU's current renewable energy target, its 23% GHG cut target might be undercut by a recent EU move to deepen the emissions reductions of the bloc to 55%. Spain has a chance to increase the ambition of its emissions cuts target in a planned 2023 revision.

The law enters into force the day after its publication in the Spanish State Official Gazette (BOE), banning new permits for fossil fuel exploration, research, and production in Spain's land and ocean territory. The law prevents the extension of all existing licenses from 31 December 2042.

It also bans uranium mining and fracking, on top of requiring fossil fuel producers to plan to convert their drilling platforms to produce renewables, for example, geothermal energy.

While some existing multi-stage fossil fuel permits have reached survey and exploratory drilling stages, international marine life advocacy group OceanCare successfully lobbied to stop any more production phases from starting up after the law's entry into force. "This actually will mean the end of most, if not all, of the projects currently being processed," consultant Carlos Bravo, speaking on behalf of OceanCare, told IHS Markit.

But projects with permits still might be granted 30-year production concessions before the law's effective date, said Bravo.

Still, OceanCare, alongside WWF, Greenpeace, and local groups in the Basque Country, the Balearics, and the Canary Islands, view the legislation's inclusion of a ban as a step forward.

Even though Spain is a major importer of pipeline and shipped natural gas, it hosts "virtually no domestic production" of oil and gas, according to the US Energy Information Administration.

Repsol's Casablanca platform off Spain's eastern coast operates E&P at the Lubina and Montanazo blocks, producing net 1,320 barrels of oil equivalent per day. The concession for the Lubina block, Spain's most recent according to Bravo, was granted in 2012 through the end of 2042.

Spain's fossil fuel permit ban follows similar legislated bans by EU members France, Denmark, and Ireland. France was an early mover, banning new oil and gas production in 2017, and setting a 2040 end date for existing production.

Spanish renewables make up for lateness

Spain's Climate Change Law sets in stone certain international and EU commitments which have been accumulating since the 2015 Paris Agreement.

Under that deal, the world's nations may voluntarily develop long-term national low GHG development strategies (LT-LEDS) as part of their mandatory emissions pledges, called National Determined Contributions (NDCs).

Spain and other EU member states already have submitted their LT-LEDS to the United Nations Framework Convention on Climate Change, including France, the Netherlands, Portugal, and Germany.

The recently approved Spanish climate law integrates the country's existing LT-LEDS and also integrates EU requirements under the 2019 Clean Energy Package, which obliged member states to create a National Energy and Climate Plan (NECP) for 2021 to 2030. Spain submitted a draft of its NECP in April, proposing a 23% reduction of GHG emissions by 2030.

The law has been slow in coming. In 2017, Laurence Tubiana, the current CEO of the European Climate Foundation and its then director, accused Spain's government of dragging its feet on funding climate change policy.

Despite rapidly expanding renewable energy development, Spain remained at the bottom of the pile in 2020 climate policy rankings published by the non-profit Germanwatch.

But Spain's carbon intensity is slightly below the EU average. One reason is its success in decarbonizing the energy sector, where growth in renewables contributed to a cut in the sector's emissions of 57% during the 2005-2019 period.

In January 2020, Spain's government followed the European Parliament in declaring a climate emergency. It sent the Climate Change Law to parliament in May, according to a blog by law firm Herbert Smith Freehills.

With the Climate Change Law, Spain is setting a climate neutrality deadline of 2050, while targeting mid-point 2030 targets for GHG reductions, renewable energy use, and energy efficiency.

Several renewable energy targets are envisioned in the bill. Among them, a 2050 deadline to use exclusively "renewable-based" generation sources. By 2030, Spain will target overall energy consumption of at least 42% from renewables, and its target for renewables in electricity generation will be 74%, surpassing the 65% target set by Germany.

Renewables in the country are set for a further boost under Spain's plan to use its share of the EU's pandemic recovery fund, the €800 billion ($960 billion) Recovery and Resilience Facility. "Renewable energy developers already flocked to Spain before the COVID-19 pandemic, and for many, business was booming. What the law does, together with the anticipated funding for the Recovery and Resilience Plan, is create a positive climate for the continued growth of renewables in Spain," said IHS Markit Research and Analysis Manager, Solar and Energy Storage, Josefin Berg.

This will mean Spain's renewable energy developers can explore more avenues. "Spain's new climate change law sets a legal framework to accelerate the deployment of renewable energy sources. Even if some advocacy groups find the law not ambitious enough, the regulation sends a clear signal that Spain will be welcoming more investments in renewables. More than just targets, the law incorporates items like energy efficiency criteria in public sector procurement, or a planned change in property law, to facilitate shared solar systems in neighborhoods," said Berg.

Spain will fund its climate aims in part through income from auctions of GHG emissions allowances, according to a blog by Madrid-based law firm López-Ibor Mayor and Associates.

Sector goals for buildings, mobility

Spain's law will also reduce primary energy consumption by at least 39.5%, in part through a future Housing Rehabilitation Plan and Urban Renovation policy to be passed by the government, according to Spanish energy consultancy SinCeO2.

Under the Climate Change Law, companies also will be obliged to calculate and make public their carbon footprints, alongside drawing up plans to reduce their GHG emissions, said SinCeO2.

For the mobility sector, the law also provides for the gradual adoption of measures intended to align with EU goals for the emissions produced by newly registered cars and vans. Spain will ensure more zero-emissions cars and vans are sold by no later than 2040. What's more, it will create a Technical Building Code that obliges the installation of electric vehicle charging points in newly constructed buildings and fuel supply facilities.

The law will oblige cities with more than 50,000 inhabitants, as well as Spain's island territories, to adopt emissions-reducing sustainable urban mobility plans by 2023. For ships, it will progressively reduce the use of fossil fuels by vessels and platforms in ports, building on EU regulations like the Sulphur Directive.

Bravo noted that some mobility measures could have been stronger. "There is no mention whatsoever of zero-emission mobility in heavy freight transport or a firm commitment to zero-emission fuels in maritime transport," he said.

Posted 21 May 2021 by Cristina Brooks, Senior Journalist, Climate & Sustainability, IHS Markit

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