Spain Sustainability Newsletter January

2025 promises to be a busy year for new sustainability regulation. At Ashurst Spain we have analysed the most relevant regulatory developments among which the following stand out:
(a) In relation to environment, the first milestone at a national level will be the entry into force of the Law on the Prevention of Food Loss and Waste and, at a European level, the publication of more information on the EU Clean Industry Deal.
(b) With regard to transparency, we will be closely following the progress of the Corporate Sustainability Reporting Bill and the European Omnibus Simplification Package.
(c) Finally, in the context of financial markets, the year will be marked by the implementation of the Green Book on Sustainable Finance in Spain and the review of SFDR.
On 23 January 2025, the European Commission, led by Chair Ursula von der Leyen, launched a new Global Energy Transition Forum as part of the World Economic Forum in Davos.
Its objective is to maintain the momentum of the global energy agreement and ensure that global energy objectives are reflected in the new Nationally Determined Contributions before the next United Nations Framework Convention on Climate Change.
This initiative brings together partners from around the world including Brazil, Canada, Democratic Republic of Congo, Kenya, Peru, South Africa, United Kingdom and United Arab Emirates.
From 1 January 2025, the scope of application of the regime resulting from Regulation (EU) 2015/757 is extended to greenhouse gas emissions generated by offshore ships.
This is established by Commission Delegated Regulation (EU) 2024/3214 of 16 October 2024, which amends Regulation (EU) 2015/757 of the European Parliament and of the Council as regards the rules for the monitoring of greenhouse gas emissions from offshore ships and the zero-rating of sustainable fuels.
This Delegated Regulation also provides for the zero rating of renewable fuels of non-biological origin, recycled carbon fuels or synthetic low-carbon fuels, in accordance with Directive 2003/87/EC. The aim is to align the rules of Regulation (EU) 2015/757 with the rules applicable to other sectors of the EU Emissions Trading System (EU ETS).
Regulation (EU) 2025/40 of the European Parliament and of the Council, of 19 December 2024, establishes rules for the management of packaging and the waste resulting from it. The purpose is to harmonise the measures adopted by each Member State in order to guarantee the free movement of packaging in the internal market (avoiding trade barriers) and to promote environmental sustainability.
The Regulation shall be applicable from 12 August 2026, with specific deadlines for the implementation of various provisions, such as labelling or recycling targets.
Among the most relevant measures, the following stand out:
(a) Reduction of hazardous substances (lead, cadmium or mercury).
(b) Design of packaging to minimise its volume and weight and to enable recyclability and reusability. In addition, different qualities of packaging are established precisely according to their recyclability.
(c) From 2028 onwards, obligation to create harmonised labels for packaging to provide information on its composition and recyclability.
(d) Recycling objectives are set for different materials, such as plastic, glass, metals and paper/cardboard, with specific goals for 2025 and 2030.
(e) Increased responsibility for producers, as they will have to finance the management of packaging waste and ensure their compliance with sustainability requirements.
On 19 December, a position statement (Informe de la Ponencia) on the Bill amending Law 1/2005, of 9 March, which regulates the system for greenhouse gas emission allowance trading was published and is available only in Spanish at this link. The outstanding legislative milestones should not delay its final approval by more than two months.
The Bill seeks to incorporate into the existing regime the changes to the EU ETS resulting from the new provisions of Directives (EU) 2023/958 and 2023/959 amending the EU ETS Directive.
The following are some of the most interesting developments that the Bill aims to include:
(a) the scope of the Law is extended in accordance with the EU ETS to include the combustion in the buildings, road transport and additional sectors, and the deadline for operators to surrender emission allowances is postponed to 30 September of each calendar year;
(b) the Government is required to allocate all revenues obtained within the EU ETS framework to fund measures that combat climate change. In this sense, the visibility of the source of the funding of actions or projects funded from the EU ETS auctioning revenues must be ensured;
(c) a reduction of the sectors or subsectors that will be able to benefit from a free allocation of emission allowances is envisaged and a transitional free allocation regime is established for installations in sectors at risk of carbon leakage, with a gradual reduction until their elimination in 2034;
(d) the Bill expressly foresees which installations are subject to energy audit obligations or to which a certified energy management system applies, and climate neutrality plans are introduced, to be drawn up by operators of installations whose greenhouse gas emission levels are higher than the 80% of emission levels for the relevant product benchmarks. The submission of this plan shall be a condition precedent to receiving the relevant free allowances;
(e) following the incorporation of the maritime transport sector into the EU ETS on 1 January 2024, the introduction of a new section relating to this sector is foreseen; and
(f) the sanctioning regime is extended to make it applicable to all subjects bound by the EU ETS.
In any case, amendments to the current text could still be made during the legislative process.
On 31 December, the Commission Implementing Regulation (EU) 2024/3172 of 29 November 2024 was published in the OJEU. This Regulation repeals the previous Commission Implementing Regulation (EU) 2021/637 and lays down rules to ensure the implementation of the disclosure rules for credit institutions contained in Regulation (EU) No 575/2013.
Regulation (EU) 575/2013 was recently amended to incorporate the international standards of the Basel Committee on Banking Supervision's third international Regulatory Framework for Banks (Basel III) (through Regulation (EU) 2024/1623). Thus, the new Commission Implementing Regulation aims to amend the existing uniform reporting formats and adapt them to the prudential disclosure standards contained in Basel III to improve transparency and consistency in the area of credit institutions.
In particular, article 22 of the new Commission Implementing Regulation introduces new obligations regarding the disclosure of ESG risks, applicable from 1 January 2025 for large entities that have issued securities admitted to trading on a regulated market in a Member State.
These entities must disclose the following twice a year: (i) qualitative information on ESG risks; (ii) quantitative information on climate change transition risk; (iii) quantitative information on climate change physical risks; (iv) quantitative information on mitigation actions associated with economic activities that qualify as environmentally sustainable under Article 3 of Regulation (EU) 2020/852; and (v) quantitative information on other mitigation actions and exposures to climate change related risks that do not qualify as environmentally sustainable economic activities under Article 3 of Regulation (EU) 2020/852.
Likewise, they may choose to disclose the information referred to in section (iv) above towards counterparties that are non-financial corporations which are not subject to the disclosure obligations laid down in Articles 19 bis or 29 bis of Directive 2013/34/EU and in Implementing Regulation (EU) 2021/2178.
The European Financial Reporting Advisory Group (EFRAG) published on December five new technical explanations focusing on environmental issues which are added to the 157 explanations published so far (available at this link). The new explanations are available at this link. The published explanations are grouped into chapters according to their nature (cross-cutting, environmental, social or governance) and by disclosure requirements, following the European Sustainability Reporting Standards (ESRS).
The publication of these explanations is part of the Q&A platform on the ESRS that EFRAG, as technical advisor to the European Commission, launched in 2023 to collect and answer technical questions, supporting preparers and other stakeholders in the implementation of the ESRS.
On December 13, the European Securities and Markets Authority (ESMA) published a Consultation Paper seeking stakeholders’ views on the proposal to digitalise financial and sustainability disclosures through the European Single Electronic Format (ESEF). The full text of the proposal is available at this link.
The proposal includes an assessment of the criteria to be followed towards the implementation of ESEF for sustainability disclosures considering the experience gained in the digitalisation of financial information. The aim is that investors are able to effectively access relevant and comparable information, promoting data-driven investment strategies. For this purpose, digitalised sustainability and financial information shall be integrated in the future European Single Access Point (ESAP).
Those who are interested may submit their comments by 31 March 2025. Once the consultation period is closed and the comments received have been considered, ESMA plans to publish a final report and submit a draft on the technical standards before the European Commission for its approval within the third quarter of 2025.
The Green Bond Regulation (Regulation 2023/2361) requires issuers to complete a factsheet as a requirement for the issuance of European Green Bonds. Additionally, prior to issuance, they must obtain a positive opinion of the completed factsheet from an external reviewer registered with ESMA.
In this sense, the Regulation foresees a transitory regime between 21 December 2024 and 21 June 2026 in which external reviewers who intend to provide services in accordance with the Regulation must notify ESMA to that effect and provide the necessary information for their registration with ESMA.
On 17 January 2025, ESMA updated the list of external reviewers that have already complied with this transitional regime. The full list is available at this link.
The European Banking Authority (EBA) has published this January a preparatory paper on ESG risks on the area of scenario analysis and the final version of its ESG risk management guidelines:
(a) Consultation on the draft guidelines on ESG scenario analysis. EBA is aware of the role of scenario analysis in fostering institutions' resilience against environmental risks, starting with climate. For that reason, it is submitting for public consultation a draft guideline built around the distinction between scenario analysis used (i) to test the institution’s financial resilience and its capital and liquidity to severe shocks in the short and medium term and (ii) the resilience of their business model, in the short, medium and long term. The consultation paper is available at this link.
The EBA expects to finalise these guidelines in the second half of 2025. The idea is that these guidelines start to apply on 11 January 2026, except for small and non-complex credit institutions, for which they would start to apply on 11 January 2027.
(b) Final guidelines on the management of ESG risks. The development of these guidelines is part of EBA's role under the CRD IV Capital Requirements Directive. They set out requirements for institutions to identify, measure, manage and monitor ESG risks, including through plans to ensure their resilience in the short, medium and long term. The guidelines are available at this link.
These guidelines shall be applicable from 11 January 2026, except for small and non-complex credit institutions, for which they shall apply from 11 January 2027.
On 2 January, Regulation (EU) 2024/3005 on the transparency and integrity of environmental, social and governance (ESG) rating activities entered into force. It shall be applicable as from 2 July 2026.
The Regulation aims to improve the transparency, reliability and comparability of providers‘ ESG ratings while avoiding greenwashing and other types of misinformation, in order to increase investors’ confidence in making informed sustainable investment and financing decisions.
To this end, it introduces a common regulatory regime that regulates the ESG rating activities of all ESG rating providers operating in the EU (irrespective of whether they are established in a Member State or not) and aims to enhance their integrity, transparency, comparability, accountability, reliability, good governance and independence. The following are some of the most important measures introduced by the Regulation:
(a) ESG rating providers established in the EU must obtain a prior authorisation issued by ESMA in order to operate in the EU. For providers established in third states, the Regulation foresees three regimes (equivalence, validation and recognition);
(b) as for transparency requirements, providers shall disclose the methodologies, models and key rating assumptions that they use in their ESG rating activities and shall disclose to users of ESG ratings, rated items and the issuers of rated items;
(c) mechanisms are introduced to prevent conflict of interest situations such as, among others, the prohibition to perform certain activities (consultancy, investment, statutory and accounting audit services, etc.) and the obligation to disclose to ESMA all existing or potential conflicts of interest; and
(d) the Regulation foresees the establishment of a register of ESG rating providers by ESMA and also entrusts ESMA with their supervision.
ESG rating providers operating in the EU will be required to (i) notify ESMA by 2 August 2026 if they wish to continue operating in the EU and (ii) shall request its authorisation or recognition within four months of its entry into force.
On 17 December, the EU Platform on Sustainable Finance presented a non-binding proposal to establish a categorisation system for sustainable financial products. This proposal is part of the review process of Regulation 2019/2088 on sustainability disclosures in the financial services sector (SFDR) being carried out by the European Commission. The full text of the proposal is available at this link.
The proposal seeks to align investors' sustainability preferences with available financial products by introducing a clear categorisation scheme for such products and rigorous disclosure criteria.
To this end, it proposes to classify products with three sustainability strategies: (i) products that contribute through investments aligned with the EU taxonomy or sustainable investments (as defined in Article 2.17 SFDR) that do not cause significant harm (sustainable); (ii) products whose investments support the transition to net zero and a sustainable economy in line with EU recommendations (transition); and (iii) products that invest or exclude investments and/or activities based on ESG criteria (ESG collection). Products not included in any category will be identified as "unclassified".
Finally, the proposal also recommends extending the categorisation to products and services that fall under the sustainability preferences of the Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution and the Markets in Financial Instruments Directive (MiFID).
On 17 December, EFRAG published a voluntary sustainability reporting standard (VSME) for unlisted SMEs and, therefore, not subject to Directive (EU) 2022/2464 (CSRD). The full text of the document is available at this link.
The aim of the VSME is to help these SMEs to provide efficient and appropriate responses to requests for sustainability information from investors, financial institutions and large companies.
The VSME is mainly structured in two modules: (i) a core module for all unlisted SMEs that provides guidelines for SMEs to report on their sustainability practices; and (ii) a comprehensive module for unlisted SMEs that wish to provide more detailed information on their sustainability practices.
On December 13, ESMA published Q&As with further details on specific aspects of the practical application of the guidelines on funds' names using ESG or sustainability-related terms. The full text of the guidelines is available at this link.
These Q&As aim to ensure an homogeneous application of the guidelines through a common understanding of key concepts and address important issues on green bonds, convergence with the definition of "significant sustainable investments" and the definition of "controversial weapons".
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.