Regulatory Alerts2020-12-17
Law 9/2020 of 16 December amending Law 1/2005 of 9 March on the greenhouse gas emission allowance trading scheme to intensify cost-effective emission reductions
The Spanish State, through Law 9/2020 of 16 December, amends Law 1/2005 to fully transpose EU Directive 2018/410 and align Spain's greenhouse gas emission allowance trading scheme with the 2021-2030 Phase IV framework. The legislation mandates a linear reduction factor increase to 2.2%, establishes auctioning as the primary allocation method, and introduces strict activity-level monitoring and mandatory return of excess free allowances for fixed installations. It further eliminates five-year authorisation reviews, updates free allocation percentages to phase out by 2030 for non-leakage-risk sectors, and strengthens coordination mechanisms between national and regional authorities alongside social dialogue participation.
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