Climate Change and Energy Transition Law 7/2021

Spain’s Climate Change and Energy Transition Law 7/2021 marks a significant milestone in the country’s environmental legislation. Its primary goal is to ensure compliance with international climate commitments, such as the Paris Agreement, by setting a legal framework for reducing greenhouse gas (GHG) emissions, promoting the transition to a low-carbon economy, and enhancing resilience to climate impacts.

What is Law 7/2021 on Climate Change and Energy Transition?

Promulgated on May 20, 2021, Law 7/2021 establishes the foundations for Spain to achieve climate neutrality by 2050. This means reaching a balance between GHG emissions and removals, either through natural absorption or carbon capture technologies.

Its main objectives include:

• Reducing net GHG emissions by at least 23% by 2030 compared to 1990 levels.
• Achieving 100% renewable electricity generation by 2050.
• Promoting energy efficiency and sustainable mobility.
• Strengthening adaptation measures to climate change impacts.

The law also establishes specific obligations for businesses and public administrations, such as integrating climate criteria into planning and decision-making.

The role of Law 7/2021 in carbon footprint measurement

Carbon footprint measurement is a core pillar of Law 7/2021, enabling companies and organizations to identify their GHG emissions and implement reduction strategies.

The carbon footprint represents the total GHG emissions directly or indirectly generated by an activity, product, or service, measured in tons of CO₂ equivalent.

Corporate obligations under Law 7/2021

The law requires large companies and key sectors to calculate and report their carbon emissions, including:

• Direct emissions (Scope 1): from sources controlled by the company, such as fossil fuel consumption.
• Indirect emissions (Scope 2): resulting from purchased electricity, heat, or steam.
• Other indirect emissions (Scope 3): related to the value chain, such as logistics and business travel.

Compliance is essential not only to avoid penalties but also to enhance corporate competitiveness and reputation in a market increasingly focused on sustainability.

Key aspects of energy transition in Law 7/2021

The energy transition is a fundamental pillar of this law, driving the shift from fossil fuel-based energy models to renewable and energy-efficient systems.

Decarbonization goals

Law 7/2021 sets ambitious targets to reduce emissions in key sectors such as industry, transportation, and agriculture. Initiatives include:

• Encouraging the use of electric vehicles and public transport electrification.
• Implementing clean technologies in industrial production.

Promotion of renewable energy

The expansion of renewable energy sources like solar and wind power is essential to achieving the law’s goals. The regulation also incentivizes self-consumption systems and energy storage solutions, allowing businesses and households to reduce dependency on traditional power grids.

A preventive approach to climate change adaptation

Beyond emission reduction, Law 7/2021 emphasizes climate adaptation measures. This includes:

• Assessing and managing climate risks in vulnerable sectors like agriculture, fisheries, and tourism.
• Encouraging businesses to integrate climate adaptation into their strategies, such as diversifying supply chains or enhancing infrastructure resilience against extreme weather events.

Benefits of complying with Law 7/2021

Adhering to Law 7/2021 is not just a legal requirement—it is also a business opportunity. The main benefits include:

• Access to subsidies and contracts: the law facilitates public funding for decarbonization and adaptation projects.
• Enhanced reputation: sustainable companies gain greater trust from consumers, investors, and stakeholders.
• Cost savings: energy efficiency and clean technology adoption can lead to long-term financial savings.

Measure your carbon footprint in compliance with Law 7/2021 with Manglai

Law 7/2021 on Climate Change and Energy Transition is a critical legal framework that supports Spain’s shift towards a sustainable and resilient future. Its focus on GHG reduction, energy transition, and climate adaptation makes it a key tool in the fight against climate change.

For businesses, this law represents both a challenge and an opportunity. Accurate carbon footprint measurement, facilitated by tools like Manglai, is the first step to compliance and unlocking the associated benefits.