In early September, Spanish PM Pedro Sanchez announced a climate emergency plan that expands Royal Decree 214/2025 (effective from 12 June 2025), in the wake of the recent forest fires that created the momentum for more ambitious climate action. This comes at a time when Brussels is mulling over its 2040 target and scaling down its sustainability reporting ambition in a deregulatory spree.

The decree transposes the Corporate Sustainability Reporting Directive (CSRD) and builds on it. In the meantime, the EU delayed the CSRD application timeline via stop-the-clock mechanism while working to narrow its scope and simplify the European Sustainability Reporting Standards (ESRS).

New rules could be responsible for heightened demand for renewable Guarantees of Origin (GO) in Spain (+ 118 % year to date) as both corporates and public entities pursue decarbonisation. The Spanish Power Purchase Agreement (PPA) market could also see further growth on the back of the new rules, retaining its leading position in the market.

Details

Through the Royal Decree, Spain transposed the original CSRD from 2023. It requires companies to calculate and report GHG emissions. Spain’s Climate Emergency Plan raises the ceiling by building on the decree with expanded requirements. Thus:
• In 2026, in-scope entities will need to report 2025 data, covering Scope 1 and 2 emissions;
• They will also need to submit their GHG reduction plans with at least five-year horizons and establish a benchmark for tracking emissions reductions;
• From 2028 onward, large entities must include Scope 3 reporting.

The decree applies to 1) large private sector companies (those with >500 employees) and 2) public sector entities. Large private sector companies are in scope of the original CSRD (see below), Spain therefore disregarded descoping proposed by the Commission through the Omnibus package. The decree also goes beyond the EU sustainability reporting regime by covering public sector companies.

In-scope entities will need to report according to the European Sustainability Reporting Standards (ESRS). Disclosure of environmental metrics is required:

• Market-based reporting of energy consumption and mix, incl. renewable electricity and fuels
• Dual reporting of Scope 2 emissions
• Location- or market-based Scope 2 emission reduction targets

Market impact

As companies and public entities are expected to tie their GHG reduction plans to five-year cycles starting from 2026 for the financial year 2025, we can expect an increasing demand for renewable GOs (bundled and unbundled) from Q4 2025 onwards.

Veyt notes that most cancellations for a disclosure year in Spain occur in Q1 the following year, with most cancellation activity concentrated in February before the disclosure deadline in March. Because the Spanish deadline for AIB GOs import is on 15 February, only AIB GOs already sitting in the Spanish registries are available for cancellation after that date. This means that local market participants may turn to Spanish GOs from 15 February, driving up prices for domestic GOs until 10 March, which is the deadline for transfer and cancellation.

These dynamics could be further impacted by the lifting of the restriction on the export of supported Spanish GOs. In the 2024 disclosure cycle, total Spanish demand for both renewable domestic GOs and European Energy Certificates System (EECS) GOs dipped slightly by 0.1 % to 89 TWh. This number is likely to be higher for the current disclosure period as the new reporting rules take effect.

Cancellation numbers reported by CNMC until 4 December 2025 indicate a strong increase in cancellations that has already reached 31.2 TWh, 288 % higher than the same period in 2024. This development is particularly interesting, as, on average, 75 % of each disclosure year's cancellations in Spain occur in Q1. The increase could be attributed to early buying that was precipitated by the news but it could also reflect potential demand increase.

In Veyt's Spanish domestic GO medium-term forecast model preliminary version, cancellation for the 2025 disclosure period is forecasted to reach 96 TWh, 8 % higher year-on-year.

The bullish sentiment has not yet been translated to the pricing environment. This November, 2025 Spanish domestic GOs traded at approximately similar prices to EECS GOs, oscillating in a range of EUR 0.28-0.34/MWh.

According to some estimates, 4,171 large entities could be covered by the sustainability reporting requirements in Spain. Already, over 100 beneficiaries could be active in the GO/PPA markets through the state aid scheme for reduced electricity levies (100 recipients) and the state aid for indirect emission costs (191). Local market players already report that there is an increased interest from the industrial sector in the Spanish GO market.

Last year and this year so far, PPA demand in Spain has been largely driven by information technology (IT) companies, with over 2 GW contracted capacity recorded in 12 deals, according to Veyt’s PPA database. Other corporate sectors such as retail (817 MW), transport/logistics (493 MW) and telecommunications (291 MW) have also contributed to maintaining Spain’s status as the most active PPA market in 2024 and 2025. Local public authorities are yet to enter the market.

However, PPA supply could tighten amid falling solar capture rates and regulatory uncertainty surrounding a recently repealed royal decree-law in Spain, delaying deployment of new renewable projects. For more details, please read Veyt’s analysis on the Iberian solar PPA market.