Spain Sustainability Newsletter

News of the month

Draft Royal Decree regulating energy efficiency and sustainability in data centres

The Ministry for Ecological Transition and Demographic Challenge (MITECO) has drawn up a draft Royal Decree (text only available in Spanish language) that will establish a specific regulatory framework for energy efficiency and sustainability in data centres in Spain. This new framework responds to the need to transpose Directive (EU) 2023/1791 and will affect all infrastructures dedicated to data storage, processing and distribution, except for those exclusively used for defence and civil protection. 

Although the text is still pending approval, it is expected to come into force in the coming weeks, given the deadline for transposing the Directive expired on 11 October 2025.

Key new features include: (i) the annual obligation to report environmental and socio-economic indicators, which will be made public and accessible on the MITECO website; (ii) the mandatory reuse of waste heat; (iii) information on the level of compliance with the European Code of Conduct on Energy Efficiency; and (iv) accreditation of being in the top 15% of facilities with the best sustainability indicators for data centres with power > 100 MW.

Particular attention should be given to the controversial Article 7, which links the granting of access and connection permits to the prior compliance with these new obligations. Centres already connected to the electricity grid will need to provide proof of compliance when signing the technical contract for grid access. This creates a direct regulatory risk, as the success of projects will depend on compliance with documentary and technical requirements that are still pending regulatory development. 

More information about the Draft Royal Decree regulating energy efficiency and sustainability in data centres can be found at the following link.

Other news 

Environment

1. Modification of the subsidy rules for highly efficient and decarbonized factories

The Ministerial Order of 2024 (text only available in Spanish language) established a call for grants for the development of highly efficient and decarbonized manufacturing facilities in Spain. It was issued within the framework of the PERTE for Industrial Decarbonization and the Recovery, Transformation, and Resilience Plan with the aim of promoting ecological transition and competitiveness in the manufacturing sector.

The new Ministerial Order of 2025 (text only available in Spanish language), dated 23 October, now in force, introduces significant changes to the granting of subsidies established in the Order of 2024. Among other things, its scope is extended to include loans and grants managed by the State Society for Industrial Promotion and Business Development (SEPIDES) and the obligations of beneficiaries are reinforced in terms of justification, control, fraud prevention, compliance with climate objectives, and respect for the principle of “do no significant harm”. In addition, it updates the criteria for justifying climate contributions by requiring the widespread dissemination of project results, preferably through conferences. 

2. Parliament passes the Sustainable Mobility Draft Bill

On 7 October 2025, the Spanish Parliament passed the Sustainable Mobility Draft Bill (text only available in Spanish language). The text will be scrutinised by the Senate to continue the legislative process.

The Sustainable Mobility and Transport Act will apply to passenger and freight transport companies, logistics operators, companies that manage transport infrastructure, companies that manage large centres of activity (shopping centres), and those that manage logistics hubs or transport infrastructure, when those companies operate in Spain.

These companies must calculate and report the carbon footprint of their transport and mobility services, providing this information to users of these services and to the Carbon Footprint Registry under MITECO (Ecologic Transition Ministry). In addition, if they are companies with more than 200 employees or 100 per shift, they must draft sustainable mobility plans for the workplace, conduct regular monitoring, and communicate this data to the competent authority (designated by each autonomous community), which will incorporate this data into the EDIM (Integrated Mobility Data Space). In addition, they must provide relevant digital data, ensure universal accessibility, and comply with sustainability and energy efficiency requirements.

On the other hand, obligated companies will be eligible for subsidies for investment projects in sustainable mobility or innovation, provided that they meet sustainability objectives and, where appropriate, collaborate in the development of sustainable mobility plans for work.

3. Europe amends the Waste Directive to strengthen sustainability in the textile and food sectors

Directive (EU) 2025/1892, published on 26 September 2025, amends Directive 2008/98/EC on waste to strengthen sustainability guarantees in the food and textile sectors (including footwear). 

Under the premise that prevention, preparation for reuse and recycling of this waste should be prioritised, Directive (EU) 2025/1892 introduces the following main new measures: 

• For the textile sector:
  • New regime of extended producer responsibility across the European Union for textile products, requiring producers to finance separate collection, sorting with a focus on reuse and recycling, and consumer information campaigns.
  • Mandatory single registration of producers.
  • Ecological modulation of fees based on design, with express support for social economy entities and the traceability of used clothing exports.

• For the food sector:
  

New binding targets for food waste reduction to be achieved by 31 December 2030.

• 10% reduction in food waste in the processing and manufacturing of food products compared to the average annual amount generated between 2021 and 2023.
• A 30% reduction in waste per capita in retail, distribution, catering and households compared to the same reference.

Member States must transpose the Directive by 17 June 2027 and, with some exceptions, producers' obligations will be fully activated by 17 April 2028 at the latest. 

4. Royal Decree 214/2025 amending carbon footprint obligations is now in force

Royal Decree 214/2025 (text only available in Spanish language), of 18 March, creating the carbon footprint register and establishing the obligation to calculate that footprint, came into force on 12 June 2025. To address any concerns arising from this Royal Decree entering into force, MITECO has published a clarification note, which is available at the following link (text only available in Spanish language).

The obligation to calculate the carbon footprint and to draft and publish an emissions reduction plan affects:

• companies subject to the duty to disclose non-financial and diversity information in accordance with 11/2018 Act—including those that present consolidated accounts and capital companies with more than 500 employees that are public interest entities or large companies—; and
• ministries, autonomous bodies, management entities and common services of the Social Security, as well as other entities in the state public administration sector.

In principle, the first group should have been calculating their carbon footprint and drawing up a reduction plan since 2021. However, companies that must adapt in any way to the specifications of Royal Decree 214/2025 must incorporate these changes into the first information they report in 2026 with respect to 2025.

Royal Decree 214/2025 also requires that obligated parties shall make their carbon footprint and reduction plan information available to the public free of charge on their website. MITECO indicates that the publication must comply with the same deadlines as those established for consolidated non-financial information (i.e., within six months of the end of the financial year and for a period of five years).

5. Commencement of the processing of the Preliminary Draft Bill on Sustainable Consumption

In early July, the Council of Ministers passed the first draft of the Preliminary Draft Bill on Sustainable Consumption, which was submitted for public consultation and information until the end of August. The text published so far is available at the following link (text only available in Spanish language).

The initiative aims to simultaneously strengthen consumer protection and environmental protection, promoting a more transparent market and the transition to a circular economy. To achieve this, it amends Act 3/1991 on Unfair Competition and the Consolidated Text of the General Act for the Defence of Consumers and Users, incorporating Directives (EU) 2024/825 (empowering consumers for the green transition) and 2024/1799 (right to repair).

Its main pillars are:

• Creation of an effective right to repair: repairability obligation for various goods, European online platform and standardised information form.
• Fight against greenwashing and early obsolescence: extension of unfair commercial practices and requirement for verifiable environmental claims.
• New information requirements: harmonised label and notice on guarantees, indication of repackaging and repairability score.
• Economic incentives for repair after the legal guarantee, co-financed by manufacturers and importers.
• Ban on advertising fossil fuels and restriction of terms such as “eco”, “green”, etc. in company names.
• Cap on ticket resale prices and increased transparency in online markets.

The regulation provides for a phased timetable. Provided they are finally approved in their current form, the technical reforms will take effect on 31 July and 27 September 2026. Meanwhile, the repair co-financing system will begin six months after publication.

This preliminary Draft Bill is currently still being drawn up by the Ministry and reports are being received, pending a second reading by the Council of Ministers and its submission to Parliament as a Draft Bill. Therefore, this piece of legislation still faces a long legislative process.

Transparency

1. Update to the SFDR Q&A document

On 4 August 2025, the European supervisory authorities (ESMA, EBA, and EIOPA) updated their consolidated Q&A document on the Sustainable Finance Disclosure Regulation (SFDR).

The update focused on clarifying the following points: 

• Linking indicator 6 in Table 2 of the SFDR to the technical definitions of water and marine resources adopted under the Corporate Sustainability Reporting Directive (CSRD). This update strengthens the connection between the SFDR, the CSRD, and the Taxonomy Regulation.
• Clarification on the “per square meter” metric in relation to energy consumption in real estate. This clarification affects data collection, conditions the classification of investments aligned with the taxonomy, and has an impact on due diligence processes prior to real estate acquisitions.
• Use of adverse impact indicators as a product performance metric to demonstrate the achievement of environmental and social characteristics. This flexibility has been very well received by product designers.
• Acceptance of the divergence between the percentages of environmentally sustainable and socially sustainable investments and the total percentage of sustainable investments. The document confirms that the sum of the first two percentages may differ from the third, supporting multifaceted disclosures, although requiring additional transparency in these cases. EFRAG promotes simplification of ESRS drafts.

The update requires reviewing and adjusting internal policies and procedures. Specifically, it requires funds to harmonize their reporting on water use with corporate standards. In addition, it recommends auditing the quality of usable area data in real estate portfolios, integrating adverse impact indicators into impact narratives, and reviewing pre-contractual commitments in prospectuses and marketing materials. If the partial percentages do not add up to the total, an additional explanation must be provided.

2. EFRAG promotes simplification of ESRS drafts

EFRAG (the European Financial Reporting Advisory Group, which advises the European Commission) periodically publishes ESRS Exposure Drafts (ESRS), revised drafts of European standards regarding sustainability reporting requirements for companies operating in the European market.

On 31 July 2025, EFRAG published new drafts containing proposals to simplify the ESRS by reducing both their complexity and scope. In particular, they proposed cutting mandatory data by 57% and total disclosures by 68%.

These drafts are in line with the European Commission's recent efforts to simplify companies' sustainability reporting obligations, as embodied in the Omnibus Package.

Along with the publication of these drafts, EFRAG launched a public consultation (which ended on 29 September 2025, but the results have not yet been published) to gather industry feedback on the corporate sustainability reporting system. In August and September, it also conducted pilot tests with companies to assess technical aspects such as the methodology for adequate wages and the assessment of double materiality.

The aim is that, following this consultation and analysis process, EFRAG will submit a final technical proposal to the Commission by November 2025 to ensure that sustainability standards are clear, accessible and useful for promoting transparency and sustainability in the European business sector.

3. Omnibus Package update

3.1 Commission announcement regarding Omnibus IV

In May 2025, the European Commission announced a new phase of its regulatory simplification package, with the aim of reducing administrative costs for companies operating in the European Union by €400 million per year (Omnibus IV). 

Among the most significant developments is the creation of a new category of companies, "small mid-caps" (SMCs), which includes companies with fewer than 750 employees and up to €150 million in turnover or €129 million in assets. These companies will be able to benefit for the first time from certain exemptions and simplified rules, such as those provided for in the General Data Protection Regulation (GDPR) and in the requirements for issuing prospectuses, thus facilitating their access to capital markets and reducing the regulatory burden on growth and financing processes. 

Another measure of interest is the digitisation of documentary requirements in product legislation, which eliminates the obligation to submit paper documentation and allows for the digital management and verification of compliance. This significantly improves operational efficiency and traceability for entities that manage large volumes of documentation in cross-border transactions. 

In the area of due diligence, a two-year extension (until 2027) has been announced for the entry into force of the new obligations in the battery sector, giving companies additional time to adapt and prepare the necessary verification systems. In addition, guidelines will be published one year before effective implementation, allowing operators to anticipate and plan for regulatory changes with greater legal certainty. 

Looking ahead to the coming months, the Commission is planning new phases of the Omnibus package focusing on the defence, chemical and digitalisation sectors, which could mean new opportunities for simplification and reduction of burdens for funds and entities with interests in these areas. Multinational entities are advised to monitor the progress of these initiatives in order to anticipate possible impacts and take advantage of the competitive benefits of reduced bureaucracy and greater regulatory clarity.  

The European Commission has published a question and answer document on Omnibus IV, which is available at the following link.

3.2 Progress in its implementation

Negotiations between members of the Committee on Legal Affairs (European Parliament committee) are being delayed due to disagreements on fundamental issues such as scope, civil liability and transition plans related to the CS3D and the scope of the CSRD. On 13 October 2025, the Committee on Legal Affairs adopted its position on simpler sustainability requirements together with the decision to start the trialogue (interinstitutional negotiations between the European Parliament, the Council and the Commission). However, that decision was rejected by a narrow margin of only 10 votes in the European Parliament plenary session. This means that the debate continues and that further amendments may be introduced before the European Parliament's next plenary vote on the Content Directive on 13 November.

EU heads of state and government have called on EU lawmakers to conclude the trilogue and agree on a final version of the text before the end of the year.

Financial markets

1. The European Commission postpones until 2027 the adoption of Level 2 technical standards on ESG ratings, SFDR and European Green Bonds

During these last weeks, ESMA has continued to develop and consult on the draft technical standards for the regulation of ESG ratings and European Green Bonds, with the aim of improving the transparency, integrity and comparability of these instruments in the European market. 

However, on 6 October, the European Commission informed the supervisory authorities (ESMA, EBA, EIOPA and AMLA) that it will not adopt before October 2027 a number of Level 2 technical standards considered non-essential, including the above, as well as some implementing SFDRs. 

This strategy, aligned with the simplification agenda, seeks more efficient and less onerous regulation, giving the financial sector a temporary break and prioritising competitiveness and regulatory proportionality in the EU.

2. Simplification of the EU Carbon Border Adjustment Mechanism

The EU has definitively approved, on 29 September 2025, the amendment to the Carbon Border Adjustment Mechanism (CBAM). This amendment is part of the Omnibus I legislative package, aimed at reducing regulatory and administrative burdens, especially for small and medium-sized enterprises (SMEs), without altering the CBAM's climate objectives. The new regulation will be published in the Official Journal of the European Union soon and will enter into force three days after its publication. 

The CBAM is the system with which the EU imposes the same cost per CO₂ on imports as it does on  domestic production. This prevents companies from moving their manufacturing to countries with more lax standards. Following a transitional period from 2023 to 2025, the mechanism would, in principle, become mandatory in 2026. From that year onwards, importers will have to register, buy CBAM certificates at the average weekly price of the European emissions market, declare the emissions of the goods and submit the certificates that cover them. If they prove that they have already paid a price for carbon in the country of origin, they will be able to discount it.

The key development for investors following the newly approved amendment is the introduction of a threshold of 50 tonnes per annum (de minimis) for imports of steel, aluminium, fertilisers and cement. Operators that do not exceed that volume will be exempt from registering and buying certificates, which alleviates operational risk in supply chain finance structures with modest exposures.

For higher volume flows, the schedule is relaxed. The sale of CBAM certificates is postponed to February 2027 and the obligation to acquire them is moved to that date to cover 2026 issuances, which grants an additional year of liquidity to corporate treasuries. In addition, the Regulation allows the filing of returns to be delegated to third parties (CBAM representatives), facilitating the outsourcing of compliance and reducing fixed costs in diversified portfolios operating in multiple jurisdictions.

In terms of asset valuation, the amendment clarifies the adjustments for carbon price paid, incorporating standard values that the Commission will publish annually. This greater predictability will have a positive impact on the cash flow models of infrastructure funds and sustainable debt, which until now suffered from uncertainties in discounting the effective impact of the carbon tax on projects located outside the EU. 

As next steps, the Commission will have to adopt delegated acts on the fee structure and publish the emission default values by 2027, while by the end of 2025 the possible extension of the CBAM to other sectors covered by the European Union's greenhouse gas emissions trading system will be reviewed. 

3. New technical standards for external reviewers of European Green Bonds

The European Commission adopted in mid-September a Delegated Regulation supplementing the European Green Bond Regulation (Regulation (EU) 2023/2631) as regards regulatory technical standards (RTS ) on the external review regime. The text sets out the requirements for reputation, technical capacity and internal governance, as well as a detailed conflict management framework and strict subcontracting rules, all under the direct supervision of ESMA. 

From 21 June 2026 onwards, only firms registered with ESMA will be permitted to issue valid pre- and post-issuance opinions for bonds that are marketed as European Green Bonds. For this reason, it may be advisable to incorporate clauses into placement contracts that contemplate possible delays in the registration process and adjust the issuance schedules to absorb the learning curve that the new control framework will entail. Investors, on their side, should review their internal green asset admission policies to ensure that they require the involvement of registered reviewers and that they assess the segregation of duties and business continuity mechanisms outlined in the RTS.
This Delegated Regulation is still pending publication in the Official Journal of the European Union. However, ESMA is already working on the registration guides and is expected to open its application portal in early 2026.

4. ESMA's first guidelines to combat greenwashing in sustainable investments

ESMA published in June the first of what will be a series of thematic notes to help issuers and other market players communicate their sustainability credentials in a clear, fair and non-misleading way, with the aim of combating greenwashing and protecting investors. 

This first note sets out the key principles and provides examples of bad practices, such as cherry-picking, exaggerations, the use of outdated credentials, and unclear comparisons with competitors. It also recommends detailing the meaning of belonging to sustainability initiatives or alliances, explaining the criteria of awards or labels received and clarifying possible conflicts of interest, such as the payment of fees to entities that award prizes. Finally, regulatory designations (such as those of the SFDR) should be avoided as if they were quality labels or independent awards.

These new guidelines and related guidance apply primarily to marketing materials and voluntary communications.

5. ICMA's new standards and good practices for green and sustainable bonds: key developments and tools in 2025

The International Capital Markets Association (ICMA) has focused a large part of its efforts during the first half of 2025 on boosting the green and sustainable bond market, which has crystallised in the publication of three very interesting texts:

1. Sustainable Bonds for Nature: A Practitioner's Guide (June 2025)

ICMA, with the support of UNEP FI, WWF and TNC, offers practical guidance for the structuring, issuance and management of green, social and nature-focused bonds. From a practical perspective, the guide allows issuers and investors to anticipate market and regulator expectations for nature finance by providing concrete examples of eligible projects (from mangrove restoration to regenerative agriculture). In addition, it introduces the possibility of designating bonds as Nature Bonds when 100% of the funds are allocated to nature conservation or restoration projects. Finally, the guide incorporates biodiversity-specific key performance indicators in sustainability-linked bonds, which opens up new opportunities for financial innovation and product differentiation in the international market.

This new framework will enable the comparison of emissions, facilitate due diligence, as well as improving dialogue with issuers on biodiversity risks and dependencies. It may also reduce structuring costs and speed up the process of originating assets aligned with nature-positive objectives.

2. Guidance Handbook (June 2025)

ICMA publishes this manual as a comprehensive reference for the issuance of green, social, sustainable and sustainability-linked bonds.

Among the main novelties, the manual reinforces the importance of transparency in the management and reporting of funds, as well as the need to have external reviews both in the pre- and post-issuance phase. It includes new guidelines on project eligibility, social and environmental risk management, and the integration of international taxonomies, facilitating comparability and alignment with regulatory frameworks such as the EU Taxonomy, SFDR, and CSRD. Finally, it addresses practical issues such as asset refinancing, collateral management in structured bonds and the prevention of double counting, key aspects for the operations of large institutional investors. 

3. The Green Bond Principles (GBP) (June 2025)

The update of ICMA' s Green Bond Principles (GBP) reinforces the voluntary guidelines for the issuance of green bonds, establishing clear criteria on the exclusive use of funds in projects with environmental benefits, rigorous project selection, transparent management of resources and the obligation to report regularly to investors. The GBPs recognise eligible categories such as renewable energy, energy efficiency, sustainable natural resource management, biodiversity conservation, clean transport, circular economy and green buildings, among others. 

The update strengthens market governance by introducing explicit references to the 2024 Green Enabling Projects Guidance and incorporating into the definition of Green Projects not only assets and investments, but also activities necessary for their development. The structure of the four basic components (use of funds, selection process, fund management and reporting) is maintained, but with a greater emphasis on transparency and the need for external audits. This reinforced recommendation of external audits involves negotiating from early stages the verification of the use of funds and impact indicators, adjusting the issuance schedules and transparency requirements.