The new measures include changes to grid access permits and a new remuneration regime for renewables, among other provisions.

By María José Descalzo, José María Alonso, and Leticia Sitges

On 23 June, the Spanish Government passed Royal Decree-Law 23/2020, which entered into force on 25 June, approving new measures in the energy sector that aim to promote renewable energy generation and support the recovery of the economy in line with the European Green Deal (the New Regulations).

The legislation includes six key measures to cut greenhouse gas emissions and to reach carbon neutrality by 2050.

By Paul A. Davies and Michael D. Green

The French Parliament has adopted a new climate energy package to tackle the effects of climate change and boost France’s energy transition endeavors to reach carbon neutrality by 2050. As per Article 4.1 of the 2015 Paris Agreement, carbon neutrality is defined in the package as the balance, across the national territory, between anthropic emissions by sources and removal of greenhouse gases by sinks. Six key goals comprise this latest legislation.

The UK is the first major economy and G7 country to adopt the target following the CCC’s May 2019 recommendation.

By Paul A. Davies and Michael D. Green

Adoption of 2050 Net-Zero Target

UK Prime Minister Theresa May has confirmed that the UK government will adopt the Committee on Climate Change’s (CCC’s) recommended net-zero target by 2050, and will formalize that adoption through legislation. The new target supersedes the 80% greenhouse gas (GHG) reduction by 2050 target, contained in the Climate Change Act 2008. The Climate Change Act 2008 will be amended to incorporate the new net-zero target via statutory instrument, which has already been laid before Parliament.

The UK is the first major economy, and the first of the G7 group, to adopt a net-zero target, under which GHG emissions must be balanced by initiatives such as improved use of renewable energy, tree planting, carbon capture and storage technologies, and carbon offset schemes. The CCC’s recommended target is considered to be one of the toughest climate change targets in the world.

ECJ ruling provides EU Member States more flexibility in designing the promotion of renewable energies.

By Jörn Kassow, Alexander Wilhelm, and Apostolos Papadimitriou 

The European Court of Justice (ECJ) recently ruled that the German Renewable Energy Act of 2012 (Erneuerbare-Energien-Gesetz – EEG 2012) did not constitute State aid (C-405/16 P). The ECJ found that the support mechanism for renewable energies in practice financed by electricity consumers paying the so-called “EEG surcharge”, and the reductions for electricity-intensive companies related to the EEG surcharge, do not constitute State aid because they do not involve State resources.

The ECJ ruling on 28 March annulled a November 2014 decision by the European Commission (EC) that approved the German support mechanism for renewable energies as compatible State aid, and for the most part the reduction of the EEG surcharge for electricity-intensive undertakings. However, in that decision the EC had also ordered Germany to recover a limited part of the reductions that was deemed incompatible.

The Green Industry Guidance Catalogue attempts to provide consistent nationwide guidelines for green industries and projects.

By Paul A. Davies and R. Andrew Westgate

Background

On 6 March 2019, seven Chinese regulatory agencies issued the Green Industry Guidance Catalogue (the Catalogue) listing “green industries” that are eligible for funding with green bonds. The seven agencies include the National Development and Reform Commission (NDRC), Ministry of Industry and Information Technology, Ministry of Natural Resources, Ministry of Ecology and Environment (MEE), Ministry of Housing and Urban-Rural Development, The People’s Bank of China, and the National Energy Board.

China’s environmental revolution not only entails implementing a robust, modern policy framework, but also a significant rearrangement of the economy itself — rendering the revolution a priority for both ecological and economic development reasons. As a result, in recent years, all provinces and directly-administered municipalities within China and departments within the Chinese government have introduced policies and measures to promote green industries. However, these policies and measures have been hampered by a lack of uniformity and the application of differing standards in different regions.

Four NGOs launch innovative action claiming state has not met COP21 objectives.

By Paul A. Davies and Michael D. Green

On 17 December 2018, four NGOs filed legal action against the French state. In the legal action, the NGOs argued that the state has not met the short-term climate change objectives set at COP21. The NGOs — Greenpeace France, Oxfam France, the Fondation pour la Nature et l’Homme (FNH), and Notre Affaire à Tous — simultaneously launched an online petition to involve citizens in the action, now nearing an unprecedented two million signatures to date.

In accordance with the French Administrative Justice Code, the procedure for the legal action has two prongs. First, the claimants submitted a preliminary demand (demande préalable) to the Prime Minister and to no less than 12 government members seeking damages for: (i) moral harm, (ii) moral harm suffered by their members, and (iii) ecological prejudice suffered by the environment. (For more information on ecological prejudice, see Latham & Watkins’ blog post “The Notion of ‘Ecological Prejudice’ Now in the French Civil Code”.) If the state does not respond within two months of the preliminary demand, the claimants intend to file an indemnification claim before the Administrative Tribunal of Paris in March 2019. The claimants intend to allege causation between the state’s lack of action and the acceleration of climate change.

Chinese investors continue to build knowledge of the wind sector through European investment.

By Paul A. Davies and R. Andrew Westgate

China has traditionally focused more on developing coal and hydroelectric power, which provide relatively constant output, instead of wind and solar, which depend on whether conditions. However, recently, government-owned power producers have begun making significant investments in large wind projects in Europe, indicating a potential shift in the breadth of China’s commitment to an energy policy that is both global and renewable.

In fact, a recent Institute for Energy Economics and Financial Analysis (IEFA) report has shown that China now invests more in European wind projects than in Australian projects, which in recent years had received substantial amounts of money from China. Notably, Chinese private and state sectors invested US$6.8 billion in European wind projects from 2011 to 2017 compared with US$5 billion in Australia.

Relief from the mandatory scheme will reduce the administrative burden on non-energy intensive companies.

By Paul A. Davies and Michael D. Green

The Carbon Reduction Commitment (CRC) — which first came into operation on 1 April 2010 — will be abolished at the end of the 2018-19 compliance year, pursuant to the CRC Energy Efficiency Scheme (Revocation and Savings) Order 2018 (SI 2018/841) (the Order). The CRC is a mandatory carbon emissions trading scheme that applies to large UK business and public organisations.

The CRC was aimed at increasing energy efficiency and reducing carbon emissions from large non-intensive energy users. These emissions are thought to constitute around 10% of greenhouse gases (GHGs) in the UK. The scheme applied to organisations that, over the course of a year, used more than 6,000 megawatt-hours (MWh) of certain electricity and had at least one half-hourly meter settled on the half-hourly electricity market.