Environmental Law 2023 Comparisons

Constitutional Framework

The guiding principles of Spanish environmental law are set out in Article 45 of the Spanish Constitution. This article provides the right to enjoy an environment suitable for personal development, and the duty to preserve it. In addition, this article sets out the constitutional mandate under which public authorities are obliged to ensure the rational use of natural resources to protect and restore the environment.

Articles 45 of the Constitution completes this regime by making those that have caused environmental damage liable for its remediation, and outlining the three existing types of environmental liability (criminal, administrative and civil).

General Principles of Spanish Environmental Law

According to said constitutional provision and consistent with EU legislation and international treaties, Spain’s main environmental principles are as follows:

• The precautionary principle is a risk management tool which is essentially used by Spanish decision-makers and public authorities to manage a potential and uncertain risk to human health or to the environment emanating from a certain action or policy, even if this risk cannot be fully demonstrated or its effects determined due to lack of scientific data.
• The “polluter pays” principle aims to prevent or otherwise remedy environmental damage, whether to protected species or to natural habitats, water and land. This principle addresses environmental liability regarding the prevention and remedy of environmental damage. According to this principle, operators carrying out dangerous activities should take the necessary preventative actions or, if damage has already occurred, take the appropriate measures, and bear the costs to remedy such damage.
• The sustainable development principle is provided by numerous national regulations within the framework of decision-making procedures and environmental impact assessment (EIA), aiming to ensure the rational use of natural resources and guarantee the sustainable utilisation and exploitation of natural heritage.
• The public participation and information access principle ensures the following rights – public participation in environmental decision-making, access to environmental information held by public authorities, and the right to seek judicial protection regarding the first two rights. This principle also guarantees public judicial action regarding environmental law compliance.

Key Policies and Laws

Grounded in the above environmental principles, the key national policies and laws are as follows:

Integrated environmental prevention and control

The Consolidated Law on Integrated Pollution Prevention and Control approved by Royal Legislative-Decree 1/2016, of 16 December (the “Consolidated Law on Pollution”), aims to achieve environmental protection as a whole by preventing or – where this is not possible – reducing and controlling air, water and land pollution by means of an integrated prevention and control system.

Environmental assessment

According to Law 21/2013, of 9 December, on Environmental Assessment, certain types of public and private projects that are likely to have significant effects on the environment are subject to an EIA, so that the possible consequences for the environment are considered by the relevant public authority before a project is authorised.

Waste regulation and contaminated soils

Law 7/2022, of 8 April, on Waste and Contaminated Soils in a Circular Economy, which derives from the EU regulations, provides the legal framework for production and management of waste and contaminated soils.

Environmental liability

Law 26/2007, of 23 October, on Environmental Liability, establishes a framework based on the “polluter pays” principle to prevent and remedy environmental damage.

Pollution prevention and control

The Consolidated Law on Pollution applies to specific activities and industries, and provides a unified procedure for obtaining most environmental permits through a single authorisation – the integrated environmental authorisation.

Public participation and access to information

Law 27/2006, of 18 July, on the Right to Access Information, Public Participation, and Access to Justice on Environmental Matters, guarantees the following three rights – public participation in environmental decision-making, access to environmental information held by public authorities and the right of access to justice on environmental matters.

Noise regulation

Law 37/2003, of 17 November, on Noise, transposes different EU regulations relating to the assessment and management of environmental noise, and provides legal preventative and corrective measures in relation to noise sources.

Air quality and atmosphere protection

Law 34/2007, of 15 November, on Air Quality and Atmosphere Protection, allows different legal instruments to be used in an attempt to avoid, monitor and reduce air pollution.

Water and coastal sustainability

Spanish regulation provides certain control instruments to ensure water and coastal sustainability, such as the obligation to obtain authorisation to use the coastal public domain. The water and coastal legal framework is contained in Law 22/1988, of 28 July, on Coasts and the Consolidated Law on Water, approved by Royal Legislative-Decree 1/2001, of 20 July.

Natural heritage and biodiversity protection

Law 42/2007 of 13 December, on Natural Heritage and Biodiversity, provides the basic legal framework for the preservation, sustainable use, improvement and restoration of Spain’s natural heritage and biodiversity.

This national framework is complemented by the main international environmental treaties to which Spain is a party.

Key Regulatory Authorities

Legislative power in Spain regarding environmental matters is shared among the state, autonomous regions and municipalities:

• The state has the power to enact basic environmental legislation. Within the state, the Ministry for Ecological Transition and Demographic Challenge is the main regulatory body and is entitled to enact and promote basic environmental legislation before parliament.
• The autonomous regions are competent to develop the basic state legislation and entitled to enact additional provisions for environmental protection within the referred basic regulation.
• Municipalities may approve their own regulations (of lower rank than a law) within the limits of the regional and state legal framework. However, city councils’ environmental powers are mainly limited to enforcement activity.

Enforcement Authorities

State power regarding environmental enforcement and control is mainly exercised by the Ministry for Ecological Transition and Demographic Challenge and, in particular, by the Secretary of State for the Environment, which is divided into the following main public authorities:

• the Directorate General of Water;
• the Spanish Office for Climate Change;
• the Directorate General of Environmental Quality and Assessment;
• the Directorate General of Coast and Sea; and
• the Directorate General of Biodiversity, Forests and Desertification.

Enforcement of environmental law is also carried out by specialised bodies and agencies at a national level in certain specific sectors, for example, Hydrographic Confederations (responsible for the control and management of the rivers in Spain) and National Parks (which manages state natural parks and natural protected areas in Spain).

In most cases, regional governments are the public authorities competent to adopt precautionary measures and to carry out control and inspections to ensure compliance with environmental law, or with the conditions and limits set forth in environmental permits, especially concerning installations subject to the integrated environmental permit regime.

Municipalities are also entitled to use inspection, control and other enforcement powers with respect to certain sectors and activities. For instance, enforcement of regulation and permit conditions relating to nuisance activities is carried out by local governments by means of control, inspection and sanctioning powers.

Spanish environmental legislation also provides voluntary and co-operation instruments in relation to enforcement of environmental law in certain sectors. For instance, Law 7/2022, of 8 April, on Waste and Contaminated Soils in a Circular Economy foresees voluntary remediation or recovery programmes, carried out without prior declaration of contaminated land.

Additionally, due to the different administrative responsibilities involved in waste management, the regulation also provides a co-ordination committee on waste matters as a body for technical co-operation and collaboration among the various competent administrative authorities.

The principal form of protecting environmental assets is through the constitution, and the principles and rules adopted in the different sectors that affect environmental assets. See 1.1 Environmental Protection Policies, Principles and Laws.

Nevertheless, the following environmental assets’ protection techniques should be highlighted:

• The inclusion of environmental assets in the public domain (demanialización) – according to Article 132.2 of the Constitution, state public domain assets are those determined by law and include the maritime-terrestrial zone, the beaches, the territorial sea and the natural resources of the economic zone and the continental shelf.
• Obtaining authorisations/permits – as a consequence of the above, authorisations/permits are generally required for any type of activity that affects environmental assets, limiting generalised and uncontrolled use of those assets.
• The imposition of duties and obligations in order to eliminate or limit possible damage to environmental assets.
• The encouragement of public participation in different sectors that have an environmental impact.
• The development of action plans by public administrations to establish medium-to-long term aims for a more responsible use of environmental assets.

The consequence of non-compliance with the protection of environmental assets depends on the sector, the regulations adopted, and the damage caused to the environment.

However, in general terms, it can be summarised in the following possible consequences, depending on the sector and the infringement committed:

• the imposition of penalties;
• an obligation to repair the damage caused by the adoption of the required measures;
• temporary disqualification from the exercise of the activity;
• temporary, total or partial closure of the installations;
• revocation or temporary suspension of the authorisation/permit;
• a possible restriction in obtaining subsidies or aid from public administrations;
• a possible prohibition to contract with public administrations; and
• the possible imposition of criminal sanctions.

From a general perspective, regional governments are the authorities entitled to control and investigate environmental incidents and breaches of law/permits under their specific environmental legislation. In this regard, these authorities often have extensive rights including access to companies’ premises and to carry out any investigative tests deemed useful to ensure compliance with environmental law and/or with the conditions and limits set forth in environmental permits.

However, the competent inspection bodies may designate private entities to carry out, on their behalf, material inspection activities that are not reserved for public officials and not related to the design of inspection systems, plans or programmes.

In addition, the state government and local authorities are also empowered to inspect, control and enforce the law in certain sectors and activities, such as those related to nuisance activities.

Environmental permits are generally required for plans, programmes and projects that may have significant effects on the environment (air pollution, water discharges, damage to biodiversity, among others). In those cases, Law 21/2013, of 9 December, on Environmental Assessment provides the regime under which an environmental assessment is required.

Integrated Environmental Authorisation

In relation to the above, the Consolidated Law on Pollution establishes an integrated permitting regime under which a single environmental authorisation is required for industrial activities included in Annex 1 of said act. This authorisation should be obtained prior to any other substantive authorisation or licence that may be required (and it is required, in any case, before the construction, assembly or transfer of an installation). The application for obtaining the authorisation is submitted to the competent body of the regional government where the activity will be located and is approved in accordance with the procedure established by the specific regulations approved by that government in accordance with the Consolidated Law on Pollution.

Additionally, the modification of an installation subject to an integrated environmental authorisation may imply:

• notification to the public authority responsible for granting the integrated environmental authorisation, if the modification is not substantial (the owner may carry out the modification unless the competent public authority denies permission within one month as from said notice); or
• modification of the integrated environmental authorisation by the competent public authority following a simplified procedure, if the modification is substantial.

Additional Permits

However, certain activities may require an additional environmental permit that is not included in the integrated environmental authorisation (eg, those related to discharges, plastics and contaminated soils regulated by Law 7/2022 of 8 April on Waste and Contaminated Soils in a Circular Economy).

Challenge of Permitting Decisions

As with any other administrative act, permitting decisions can be challenged by the applicant before the issuing public authority and, if this appeal is dismissed, such decision can be challenged before the Spanish courts.

The Spanish regulator’s approach to environmental policy and enforcement focuses on providing wide and comprehensive protection of natural resources by imposing several measures to achieve this objective in line with the European legislation adopted in this respect.

Some of the measures established to contribute to the protection of natural resources consist not only of the need to obtain the corresponding permits but also in the establishment of taxes on certain environmentally damaging actions, the imposition of penalties, or the regulation of subsidies to promote concrete activities.

In this sense, the regulator aims to articulate effective mechanisms for environmental protection by enabling comprehensive action at all organisational and administrative levels. Thus, the different administrations are empowered to implement complementary measures that can contribute to achieving these protection objectives.

According to the Consolidated Law on Pollution, integrated environmental authorisation can be transferred provided prior notice is given to the issuing authority. Failure to comply with this obligation is considered a serious infringement.

Likewise, according to Law 7/2022 of 8 April on Waste and Contaminated Soils in a Circular Economy, the authorisation of waste collection and treatment operations can be transferred. This is, however, subject to a prior inspection and verification by the competent authority that the natural or legal persons who are to carry out the waste treatment operations, and the facilities in which they are to be carried out, comply with the provisions of this act and its implementing regulations.

The consequences of breaching an environmental approval or permit vary according to autonomous regions and sectoral legislation. For instance, in respect to integrated environmental authorisations, the following actions are considered as very serious infringements:

• carrying out any activity or substantially changing an installation without first obtaining the required integrated environmental authorisation, where this causes serious damage to the environment or serious danger to the health or safety of individuals; and
• failure to comply with the conditions laid down in the integrated environmental authorisation, where this causes serious damage to the environment or serious danger to the health or safety of individuals.

Such breaches may lead to the imposition of the following penalties, depending on the seriousness of the infringement:

• economic fines;
• closure of facilities;
• temporary, partial or total closure of the facilities;
• disqualification from carrying out the activity for a period of between one and two years; or
• revocation or suspension of authorisation to carry out the activity for a period of between one and five years.

There are three types of liability linked to environmental damage or breaches of environmental regulations: civil, administrative and criminal (see 6.3 Types of Liability and Key Defences for a more detailed description).

Civil Liability

Civil liability refers to liability arising among private parties. In accordance with civil liability, anyone who causes environmental damage to another party is obliged to remedy and/or compensate such damage. Under the general principles of Spanish civil law, affected parties can only seek compensation up to the value of the damages directly caused to them.

Administrative Liability

Administrative environmental liability is grounded in the “polluter pays” principle, under which the operators of economic or professional activities are obliged to implement and carry out measures for the prevention, avoidance, and remediation of environmental damage, as well as to bear all the associated costs should they be found responsible. Environmental liability is, with certain exceptions, unlimited and objective.

Criminal Liability

Environmental damage may constitute a criminal offence under the Spanish Criminal Code. Note that administrative liability is compatible with criminal liability.

General Environmental Disclosure Obligations

Operators of any economic or professional activity included under the scope of Law 26/2007, of 23 October, on Environmental Liability, must immediately inform the competent public authority of the existence of environmental damages or the imminent threat of such damages, which have been caused or may have been caused by them. They maintain such obligation even when the operators are not guilty of wilful misconduct, wrongdoing or negligence regarding the environmental damages caused by their activities. 

Likewise, as referred to below, activities within economic sectors that may affect the environment are subject to periodic reporting and disclosure obligations before the relevant public authorities, as detailed in the relevant permits and applicable regulations.

Failure to fulfil, or late fulfilment of, such obligations where the effects become more serious or turn into effective damages, may be considered a very serious infringement with associated penalties and/or lapsing of the authorisation, or its suspension for a period of between one and two years.

Disclosure of Environmental Information in Financial Reports

Companies are required to disclose environmental information in their annual reports. According to the Spanish National Chart of Accounts, an Environmental Report must be attached to the Annual Accounts Report of each company. Said Environmental Report must include, among other information:

• the risks covered by the provisions related to environmental activities, with special mention of those arising from litigation in progress; and
• contingencies related to the protection and improvement of the environment.

For a detailed description, see 17.3 Corporate Disclosure Requirement.

Each kind of liability that might arise regarding an environmental incident is subject to a different time limitation.

In this sense, pursuant to Article 4 of Law 26/2007, of 23 October, on Environmental Liability, the legal regimen regarding environmental responsibility for historic environmental incidents or damage is subject to a time limit of 30 years, starting from the day on which the emission, event or incident causing the damage is completely finished.

Therefore, any company or individual who might be environmentally responsible, whether directly or indirectly (ie, as a new operator or landowner), will not be held responsible once such term has elapsed.

The damages caused to a third party (civil liability) are subject to a time limit of one year, except if the parties have entered into a contract that foresees such damages. In this case, the time limit will be five years or the time ruled in the contract.

Criminal offences or administrative infringements are limited in time depending on the seriousness of the infringement. In this sense, administrative infringements are normally limited to six months, two or three years, while criminal liabilities are limited to five or ten years.

In general, a permit/authorisation or sectoral legislation includes the operators’ obligation to provide concrete information (eg, emissions to air, water or soil).

According to the Consolidated Law on Pollution

For instance, according to the Consolidated Law on Pollution, the operators of installations must notify the autonomous communities in which they are located of the data on emissions corresponding to the installation, specifying the methodology used in the measurements, their frequency and the procedures used to evaluate the measurements, and in all cases the following:

• the information based on the results of the emission monitoring and other information requested to enable the competent body to verify compliance with the conditions of the authorisation; and
• where emission limit values are applied which exceed the emission values associated with the best available techniques, the operator must supply a summary of emission monitoring results allowing comparison with the emission levels associated with the best available techniques.

According to Royal Decree 815/2013

Likewise, according to Royal Decree 815/2013, of 18 October, approving the regulation on industrial emissions and implementing Law 16/2002, of 1 July, on Integrated Pollution Prevention and Control, in the case of waste incineration or co-incineration plants with a nominal capacity equal to or greater than two tonnes per hour, the manager must draw up and send an annual report on the operation and control of the plant to the competent body, in which at least the progress of the incineration or co-incineration process and emissions into the atmosphere or water are reported.

According to Law 7/2022

Additionally, under Law 7/2022 of 8 April on Waste and Contaminated Soils in a Circular Economy, operators of potentially soil-polluting activities must regularly submit to the relevant authorities of the regional government information intended to underpin the declaration of contaminated land.

Nowadays, in Spain, there are three types of liabilities linked to environmental incidents, which are civil, administrative and criminal liability.

Civil Liability

Civil liability refers to that arising among private parties. In accordance with civil liability, anyone who causes environmental damage to another party is obliged to remedy and/or compensate such damage. Under the general principles of Spanish civil law, affected parties can only seek compensation up to the value of the damages directly caused to them (including loss of profits).

Administrative Liability

Administrative environmental liability is grounded in the “polluter pays” principle under which the operators of economic or professional activities are obliged to implement and carry out measures for the prevention, avoidance and remediation of environmental damage, as well as to bear all associated costs should they be found responsible for environmental damage.

Environmental liability is, with certain exceptions, unlimited and objective. “Unlimited” meaning the obligation of the responsible party is to restore the damaged natural resources to their original state, bearing the total cost of the remediation. Additionally, administrative liability is objective, as the obligations of actions are imposed on the operator regardless of any fault, intent or negligence in their behaviour.

Nevertheless, administrative liability must be differentiated from the applicable administrative penalty regime. Therefore, the imposition by public authorities of any obligation towards restoration and compensation of environmental damages is compatible with the imposition of administrative penalties upon breach of an environmental regulation.

Despite the “polluter pays” principle, certain nuances need to be taken into consideration, since this principle does not always apply in practice.

Sometimes, the party that pays is not the polluter, for example:

• when the public authorities pay due to in vigilando fault;
• when the non-owner tenant or non-tenant owner of contaminated land pays, due to subsidiary liability;
• when the successors of the person liable in terms of ownership or implementation of the activity that caused the damage, pay (subsidiary liability); or
• when the insolvency receivers pay due to failing to comply with their obligations (subsidiary liability under Law 26/2007).

Sometimes, the polluter does not pay, for example:

• due to the action of a third party;
• due to compliance with a compulsory order or instruction from a public authority under the performance of a contract;
• due to defects in the project drawn up by the public authorities;
• due to environmental damage expressly foreseen in the EIA attached to the project approved by the public authorities;
• due to emissions under an administrative permit granted pursuant to the relevant legislation concerning activities of Annex III of Law 26/2007; or
• due to damages which were not considered likely to cause environmental damage according to scientific and technical knowledge prevailing at the time.

Nevertheless, administrative liability must be differentiated from the applicable administrative sanctioning regime. Therefore, imposition by the public authorities of any obligation to restore and compensate for all damages caused to the environment is perfectly compatible with the imposition of administrative penalties upon the breach of the relevant environmental regulation.

Criminal Liability

Likewise, as noted above, it may be a criminal offence under the Spanish Criminal Code to breach laws or other general environmental provisions so as to directly or indirectly cause serious damage to the environment. Again, administrative liability is compatible with criminal liability.

The proper defence regarding criminal or administrative sanctioning penalties would normally involve lack of negligence or participation in the commission of a crime or sanction, lack of evidence against the operator, measures taken to repair the damage, term expiration to seek responsibility, and any procedural infringement on the sanctioning process.

Any natural or legal person, who performs an economic or professional activity or who controls such activity, could be held responsible for the environmental incidents caused by such economic or professional activity. Therefore, the environmental regime is equally applicable to companies and individuals.

Environmental taxes in Spain have increased significantly compared to previous years and are distributed at the state, regional and local levels. Therefore, there is a wide variety of environmental taxes. Some of the most relevant taxes are as follows:

• a special tax on non-reusable plastic packaging;
• tax on waste disposal in landfills, and incineration and co-incineration of waste;
• tax on the value of gas, oil and condensate extraction;
• tax on fluorinated greenhouse gases;
• taxes related to electricity and on the value of electricity production;
• taxes related to the production and storage of nuclear fuel and radioactive waste; and
• taxes related to the transport sector.

Incentives, Exemptions and Penalties for Actions That Improve or Damage the Environment

In Spain, there are different types of incentives and exemptions for environmentally beneficial actions. For instance, Law 7/2022 of 8 April on Waste and Contaminated Soils in a Circular Economy, establishes different exemptions (eg, in certain cases in the manufacture, import or intra-community acquisition) and/or deductions from the special tax on non-reusable plastic packaging (eg, for different types of intra-community acquisitions).

Other Incentives

Aid programmes for renewables in self-consumption, storage and thermal systems

These programmes contemplate an incentive for eligible actions including:

• the installation of new photovoltaic and wind generation equipment for self-consumption, with or without storage;
• the integration of storage systems into existing renewable installations; and
• the implementation of solar thermal, biomass, geothermal, hydrothermal or aerothermal technology.

MOVES III programme

This programme aims to contribute to the decarbonisation of the transportation sector by providing financial assistance for the purchase of electric vehicles and the implementation of the charging infrastructure.

PREE 5000 programme

These funds, originating from the European Union’s Recovery and Resilience Mechanism, aim to promote sustainability in the existing building stock through:

• thermal envelope improvements;
• the replacement of conventional energy systems with renewables; and
• the installation of efficient lighting systems.

Likewise, tax deductions are provided for, among other things:

• improving energy efficiency;
• reducing the consumption of non-renewable primary energy;
• the reduction of heating and cooling demand;
• the acquisition of an electric vehicle, by the elimination of the registration tax; and
• the use of mechanical traction vehicles that are electric or hybrid.

In addition, this regime of incentives and exemptions is also complemented by a regime of penalties (see 3.2 Breaching Protections).

Law 26/2007 of 23 October, on Environmental Liability, expands the corporate liabilities of parent companies and directors. In this sense, environmental liability may also be extended to the parent company when and if the competent authority decides that the parent company has used its subsidiary to avoid its environmental responsibility.

Furthermore, Law 26/2007 foresees the extension of economic obligations to those that cause, or collaborate with, the main party responsible to prevent the action of the Administration. Regarding companies, it also foresees that managers and directors whose conduct has determined the responsibility of the company will subsequently be responsible for their obligations and liabilities (for a detailed description, see 8.1 Directors and Other Officers).

Compliance with environmental, social and governance (ESG) requirements is mandatory for certain types of companies, and their conditions are reflected in the reporting of non-financial information statements.

The reporting of non-financial information statements is annual, and it includes the information necessary to understand the evolution, results and situation of the company, and the impact of its activity. Some of the information a non-financial information statement should include is as follows:

• Information on environmental issues – the company should provide detailed information on the current and foreseeable effects of its activities on the environment and, where appropriate, its health and safety, environmental assessment or certification procedures; resources devoted to the prevention of environmental risks; application of the precautionary principle; the number of provisions and guarantees for environmental risks; etc.
• Information on social and personnel-related issues, such as work organisation, number of employees by sex, age, country or professional classification; health and safety conditions at work; the development of information, consultation and participation measures; the policies implemented in the field of training; as well as measures on universal accessibility.
• Information on respect for human rights – implementation of human rights due diligence procedures; prevention of risks of human rights abuses and, where appropriate, measures to mitigate, manage and redress potential abuses; reporting of human rights abuses; promotion of and compliance with the provisions of core International Labour Organization conventions related to respect for freedom of association and the right to collective bargaining; the elimination of discrimination in respect of employment and occupation; the elimination of forced or compulsory labour; the effective abolition of child labor; etc.
• Information relating to the fight against corruption and bribery, as for instance, measures taken to prevent corruption and bribery; measures to combat money laundering; and contributions to foundations and non-profit organisations.
• Information on society, such as the company’s commitment to sustainable development; the inclusion of social, gender equality and environmental issues in the purchasing policy; measures for consumer health and safety; tax information; etc.

The obligation to perform environmental audits may arise from the nature of the business activity and the authorisations that regulate such activity. This obligation is based on specific regulations related to environmental protection, which may require certain companies, especially those involved in activities deemed high risk or with significant environmental impact potential, to carry out periodic environmental audits.

Directors and other officers may be personally liable for environmental damage or breaches of environmental law committed by the company. Under Spanish law, managers and directors of companies are held responsible as subsidiaries for the duties and obligations imposed on their respective entities regarding administrative environmental liability (including damage remedy and monetary obligations) in the following cases:

• Managers and directors of legal entities, whether de facto or de jure, whose conduct significantly contributed to the entity’s liability.
• Managers and directors of legal entities that have ceased their activities are responsible for pending duties and obligations at the time of cessation, provided they did not take necessary actions for compliance or undertook actions that led to non-compliance.
• Those who succeed the responsible party in the ownership or operation of the activity causing the damage.
• Members of insolvency administrations and liquidators of legal entities who failed to take the necessary actions to fulfil the duties and obligations accrued prior to such insolvency situations.

Besides personal liability, managers and directors could also face civil liability before the company or its shareholders regarding the management of the company, according to the general commercial law regulations, and they could be criminally responsible for the actions taken by the company under their management.

Managers and directors may insure against civil and administrative environmental liability, bearing in mind that insurance companies do not cover criminal liability and any damage caused intentionally.

Environmental insurances, both for administrative and civil liability, are usual in the Spanish market. Most policies typically cover the following types of damages:

• the restoration of unforeseen damage caused to natural resources;
• guaranteed cover of defence expenses for the policy holder regarding claims;
• the possible provision of bail; and
• the cost of prevention measures if an imminent risk of environmental damage arises.

Additionally, within the same contract, cover for civil liability is offered for damages to third parties due to pollution.

Likewise, Spanish regulation foresees a new administrative regime to redress environmental damage, by virtue of which the operators who carry out certain economic or professional activities that are susceptible to causing environmental damage, should have a compulsory financial guarantee that allows them to face up to the environmental responsibility inherent to the activity they intend to develop.

Criminal liabilities or those arising from negligent actions are generally not compensable under Spanish regulation.

There is no provision under Spanish regulation holding lenders accountable for the environmental liabilities that borrowers may incur. However, lenders could potentially become liable if it can be proved that the borrower or, as the case may be, the activity causing the environmental damage was de facto controlled (ie, through the facility agreement) by the lenders, or if it can be proved that they knowingly finance environmentally harmful activities. Nevertheless, there is no precedent in Spain recognising lenders’ environmental responsibility in this regard.

Considering the above, it is not common for lenders in Spain to include mechanisms in financing contracts to protect themselves from potential environmental liabilities arising from the borrowers’ activities. However, in economic sectors with significant environmental impact, lenders often include clauses preventing the borrower from incurring any form of environmental liability in order to ensure repayment of the debt.

Civil claims can be brought to seek compensation for any real, direct and economically valuable damage suffered by third parties, which can give rise to group actions regarding a single incident that affects everyone in the group.

Under the Spanish Civil Code, there are no punitive or exemplary damages besides those foreseen in private agreements.

If an environmental incident affects a group, it is possible for this group to file a claim. In fact, class actions can also be filed by consumers or users’ organisations where the aggrieved are undetermined or diffuse.

The Prestige Case

One leading case concerning civil liability was that of the Prestige, a ship that sank off the coast of Galicia in 2002. In one of the most serious environmental disasters in European history, 63,000 tonnes of fuel oil was spilled along the northern coast of Spain and the south-west coast of France.

In 2016, the Spanish Supreme Court delivered judgment on the Prestige case, ruling on the civil liability claim arising from the damage caused by the environmental crime. Despite leaving the determination of civil liability to enforcement proceedings, the ruling established that such civil liability would include restoration and reparation of the damage, including environmental damage in its various aspects, and compensation for both material and moral damages, subject to the requests of the parties in its final findings.

On 19 December 2018, the Spanish Supreme Court handed down a final judgment on the civil liability arising from the Prestige disaster, setting compensation of more than EUR1.5 billion that had to be paid by the parties already sentenced, including the Master of the Prestige vessel and the insurer directly liable, stating the subsidiary liability of the owners of the vessel. The International Oil Pollution Compensation Funds were also held responsible for covering the compensation up to the limit established in the governing convention.

The Chiloeches Case

More recently, on 25 April 2023, the High Court of Justice of Castilla-La Mancha issued a ruling whereby it confirmed and upheld the convictions for crimes against natural resources and the environment previously established by the Provincial Court of Guadalajara on 31 March 2022. In that 2022 ruling, the Provincial Court of Guadalajara issued its verdict in the Chiloeches case, convicting the companies responsible for the management of hazardous and non-hazardous waste at a treatment plant located in Chiloeches, as well as five people related to the aforementioned companies, for committing crimes against natural resources and the environment. In short, the fire at the hazardous waste plant in Chiloeches which burned thousands of tonnes of hazardous waste, caused environmental and public health damage over an extensive area, resulting in a concentration of pollutants not only in the soil but also in the air.

The sentence also established civil liability on the part of one of the companies and one of the convicted persons in favour of the Castilla-La Mancha regional government in the amount of just over EUR129,480.

Civil liability can be modified between individuals by means of specific or general indemnities as well as punitive contractual clauses. However, a court might lower any punitive clauses set forth in a contract if they are way off the real reasons for the damage. In any case, such clauses will not affect the regulators and they are therefore only useful between individual and third-party claims.

Law 26/2007 obliges some operators to constitute financial guarantees to face any environmental liability, being the main guarantee commonly used and granted in an insurance policy in the Spanish market. The amount of the guarantees is not a limit of liability.

However, other types of guarantees or additional guarantees may be required, depending on the type of activity performed.

Definition

Law 7/2022 of 8 April on Waste and Contaminated Soils in a Circular Economy contains the Spanish legal regime for contaminated land. This is defined as land that has been negatively altered due to the presence of dangerous chemical components from human activity, where the concentration of such components presents an unacceptable risk to human health and the environment, according to the criteria and standards established by the government.

Declaration

Contaminated land must be declared by means of an express resolution. In this regard, each regional government is responsible for the declaration and definition of contaminated land. Operators must regularly submit information intended to underpin the declaration of contaminated land to the relevant authorities of the regional government.

The government will approve, update and publish a list of potentially soil-polluting activities by means of regulations.

Remediation

The declaration of contaminated land will determine a legal requirement for remediation and the necessary action must be taken in order to clean up and recover the land (in general, in a term that does not exceed three years). This situation must be registered within the Property Registry.

A list of priorities for action must be drawn up based on the risk to human health and the environment. Each regional government is responsible for such list and will declare that the land is no longer contaminated after it has been verified that the remediation and recovery activities have been properly carried out.

Voluntary remediation

Moreover, Law 7/2022 of 8 April on Waste and Contaminated Soils in a Circular Economy also foresees voluntary remediation or recovery programmes, carried out without prior declaration of contaminated land, which will be approved by the competent authority of the regional government.

The competent authority must keep an updated inventory of land declared as contaminated land and its voluntary remediation.

Collaboration agreements

Another path explored is the celebration of collaboration agreements between the competent public authorities and those responsible for the implementation of cleaning-up and recovery activities. This kind of agreement can be signed between those responsible for remediating the contaminated land, and then authorised by the regional government.

Polluters are liable for remediating and recovering contaminated land, at the request of the regional government.

Subsidiary liability lies with the landowners and tenants of the contaminated lands, in that order. However, they could seek recourse from the original polluter or polluters, passing on the cost of the remediation and recovery activities carried out on the contaminated land. It should be noted that such cost recovery may not be claimed for contamination beyond the levels caused by the polluter.

In the case of public property under concession, in the absence of a polluter or polluters, the tenant and the landowner, in that order, will have subsidiary liability for the remediation of the contaminated land.

The legality of the contaminating activity (as authorised by the public authorities) does not exclude the liability of the polluter.

Following the general regime set forth in Law 26/2007 of 23 October, on Environmental Liability, no person can be held liable for remediating or cleaning up contaminated land 30 years after the contaminating event.

The Spanish courts have declared that the only instance where the purchaser (not the polluter) will face the cost of remediating contaminated land is where such purchaser has obtained a discount on the land’s purchase price due to the contamination of the land.

Where there are several polluters, they will be jointly liable. In this regard, according to case law, any of the polluters may ask for the fixation of liability quotas, which will be determined according to each polluter’s contribution to the overall contamination of the land.

Legal action against polluters/landowners/occupiers can be initiated by anyone who has been affected by the pollution and who has suffered damage or injury as a result. In other words, anyone who is the holder of a right that has been affected or who has a legitimate interest.

Nevertheless, any activity or action that may cause damage to the environment can be reported, for instance, to the police or to a competent administrative body. In these cases, legal action will be taken directly by the public administrations, regardless of the possible participation of the complainant. In addition, actions may be initiated directly by the administration, as it has the necessary competencies for environmental surveillance, inspection and control.

The rights and obligations of waste operators are very diverse and vary according to the role of the operator (ie, waste holder, waste transporter or waste manager) and the type of waste (ie, hazardous or non-hazardous waste).

Depending on their role and the type of waste, waste operators have the following obligations:

• to obtain the relevant permits/authorisations for the management or transport of waste;
• to deliver the waste to an authorised waste manager;
• to provide the relevant information for the proper exercise of the activity;
• to store the waste in a way that is adequately hygienic and safe;
• to draft reports or studies, where required, and submit these to the administration;
• to subscribe to a financial guarantee and/or civil liability insurance; and
• to fulfil the conditions established in the permit/authorisation, etc.

The consequences of non-compliance with the obligations to be fulfilled by waste operators are included in the applicable legislation and are mentioned, in general terms, in 3.2 Breaching Protections.

The processes involved in investigating environmental accidents are managed directly by the competent authorities, who are provided with sufficient human and material resources to fulfil their obligations of surveillance, inspection and control, including through the support of collaborating entities duly recognised in accordance with the applicable regulations.

The legal framework for climate change in Spain is defined under Law 7/2021, of 20 May, on Climate Change and Energy Transition. This regulation aligns with international treaties to which Spain is a party.

The main purpose is to ensure Spain’s compliance with the targets for greenhouse gas emissions set out in the Paris Agreement, adopted on 12 December 2015, signed by Spain on 22 April 2016, and published in the Official State Gazette on 2 February 2017. The aim is to facilitate the decarbonisation of the Spanish economy and transition towards a circular model, ensuring the rational and collaborative use of resources.

This law also introduces two new fundamental instruments to define the framework for action against climate change. These planning mechanisms represent the primary governance instruments for climate and energy, as outlined in Regulation 2018/1999 of the European Parliament and Council, dated 11 December 2018, regarding the governance of the Union for Energy and Climate Action: Integrated National Energy and Climate Plans (INECPs) and the 2050 Decarbonization Strategy.

This regulation also introduces significant measures to promote energy efficiency and the transition towards renewable energy, and the gradual reduction of hydrocarbon exploitation within Spanish territory. Some of the main principles outlined in this regulation include the following:

• sustainable development;
• decarbonisation of the Spanish economy, meaning the achievement of a socio-economic model with zero greenhouse gas emissions;
• environmental protection, biodiversity preservation, and application of the “polluter pays” principle; and
• social and territorial cohesion, ensuring the harmonisation and economic development of areas where renewable energy facilities are located, while respecting environmental values.

Spanish regulation sets out the following national minimum objectives for 2030 in order to fulfil internationally assumed commitments:

• to reduce greenhouse gas emissions for the entire Spanish economy by at least 23% compared to 1990 levels;
• to achieve renewable energy penetration of at least 42% of final energy consumption;
• to attain an electricity system where at least 74% of generation is from renewable energy sources; and
• to enhance energy efficiency by reducing primary energy consumption by at least 39.5% relative to the baseline set by community regulations.

Prior to 2050 or as soon as possible, Spain aims to achieve climate neutrality, aligning with internationally agreed commitments, and to have an electricity system that exclusively relies on renewable generation sources.

Key Spanish laws for asbestos are Royal Decree 108/1991, of 1 February, on the prevention and reduction of environmental pollution by asbestos, and Royal Decree 396/2006, of 31 March, on the minimum health and safety requirements applicable to jobs with risk of exposure to asbestos. Likewise, given that asbestosis is considered a professional disease in Spain, important obligations associated with exposure to asbestos in the workplace have also been passed.

According to the last-mentioned provision, all activities which expose workers to asbestos fibres during the extraction of asbestos or the manufacture and processing of asbestos products, or the manufacture and processing of products containing intentionally added asbestos, are prohibited. Treatment and disposal of products resulting from demolition and asbestos removal are exempted from such prohibition.

Employers must ensure that no worker is exposed to an airborne concentration of asbestos in excess of 0.1 fibres per cubic centimetre as an eight-hour time-weighted average.

Regarding the activities of demolition or removal of asbestos present in buildings, employers are required to record, before the start of any asbestos-removal project, the presence or presumed presence of asbestos in buildings or installations and communicate this information to others who may be exposed to asbestos as a result. Any company conducting activities which involve a risk of exposure to asbestos must be recorded within the Asbestos Risk Companies Register.

Key Legislation

The Spanish legal regime for waste is mainly established in Law 7/2022, of 8 April, on Waste and Contaminated Soils in a Circular Economy. Said law is intended to prevent and reduce the generation of waste and the adverse impacts of its generation and management, reduce the overall impact of resource use and improve the efficiency of such use with the ultimate aim of protecting the environment and human health, and effecting the transition to a circular, low-carbon economy with innovative and sustainable business models, products and materials to ensure the efficient functioning of the internal market and Spain’s long-term competitiveness.

The competent authorities will adopt the necessary measures to ensure that waste management is carried out without jeopardising human health and without harming the environment. In particular, such activity may not:

• generate risks to water, air or land, nor to fauna or flora;
• cause inconvenience due to noise or odours; or
• impact negatively on landscapes or places of special interest that are legally protected.

The measures to be adopted in the field of waste will be consistent with strategies to combat climate change.

Regulatory Controls

Authorisation of waste treatment activities

The authorisation of the competent environmental authority (of each regional government) may be obtained by any operator (individual or legal entity) carrying out waste treatment activities, including waste storage, as well as the enlargement, substantial alteration or relocation of waste treatment facilities. Authorisations must be registered within the relevant Production and Waste Management Registry.

Exceptions to authorisation requirements

Natural or legal persons who carry out the disposal of their own non-hazardous waste at the place of production or who recover non-hazardous waste, as well as, where appropriate, the installations where these operations take place, may be exempted from authorisation.

Prior communication concerning starting production and waste management activities

Certain companies, due to the type of activity, must submit a communication to the competent environmental authority before initiating their activities. Entities transporting waste at a professional level, as well as waste traders and brokers, must also submit such communication to the competent authority.

Restoration of environmental legality

In order to restore environmental legality, the competent authority may adopt the following measures:

• closure of facilities or suspension of activities due to the absence of the relevant authorisation, communication or registration;
• temporary suspension of an activity, where it does not match the information declared, the conditions imposed by the competent authority or in the event of an accident, provided that the activity presents a serious risk to the environment or public health; or
• the requirement to comply with the conditions imposed by the competent authority and the adoption of corrective or remedial measures that may be necessary where the activity does not comply with the declared activity or with the conditions imposed by the competent authority, or in the event of an accident, provided that there is no serious risk to the environment or human health.

There is always someone who can be held responsible for the fulfilment of the obligations arising from waste production and management, although the responsibility of the producer or consignor of waste will differ from case to case.

When waste is transferred from the original producer or holder to another person for intermediate treatment of the waste or to a dealer, as a general rule there is no exemption from responsibility for the producer or holder to perform a complete treatment operation. This means that the responsibility of the original producer or holder of the waste ends only when the complete treatment is duly documented by appropriate waste shipment documents and, where necessary, by a certificate or declaration of responsibility from the final treatment facility, which can be requested by the original producer or holder.

The initial producer or other holder of non-hazardous commercial waste must ensure its adequate management and, in the event that they do not have the correct documentation, or the documentation reveals incorrect or deficient management, this situation must be remedied. If this is not done, the administration may assume management of the waste and charge the producer with the costs. This is without prejudice to the responsibilities that the producer or holder may have incurred.

Law 7/2022, of 8 April, on Waste and Contaminated Soils in a Circular Economy, foresees an extended producer liability in order to promote prevention and improve re-use, recycling and recovery of waste. The producers of goods may therefore be required to comply with various additional obligations, such as:

• To design products and components of products to reduce their environmental impact and the generation of waste throughout their life cycle. To achieve these objectives, the producer may be required to design, develop, produce, label and market products that are suitable for multiple uses, that contain recycled materials, that are technically durable, upgradeable and easily repairable, and that, after having become waste, are suitable to be re-used and recycled.
• To accept the return of reused products.
• To provide useful information on products such as durability, reusability, repairability, possibility to recycle or economic impact.
• To establish deposit systems that guarantee the return of the quantities deposited and the return of the product for re-use or of the waste for treatment.
• To take full or partial responsibility for the organisation of waste disposal.
• To use materials from waste in the manufacture of products.
• To extend the warranty periods of the products, comply with the right to repair the product, etc.

The implementation of such measures will be conducted by means of royal decree approved by the Council of Ministers, considering their technical and economic feasibility, environmental impact and their impact on human health, while respecting the need to ensure the proper functioning of the internal market.

Compliance with the obligations established in the field of extended producer responsibility may be fulfilled individually or collectively, through the constitution of the corresponding extended producer responsibility systems.

As referred to in 5.2 Disclosure, operators of any economic or professional activity included under the scope of Law 26/2007 of 23 October, on Environmental Liability, must immediately inform the competent authority of the existence of environmental damage or the imminent threat of such damage, which has been caused or may be caused by them. They maintain such obligation even if their operators are not guilty of wilful misconduct, wrongdoing or negligence regarding the environmental damage caused by their activities.

Public access to environmental information is regulated in Law 27/2006 of 18 July, on the Right to Access Information, Public Participation, and Access to Justice on Environmental Matters (and the right to access information is also recognised in other regulations, such as Law 26/2007 of 23 October 2007, on Environmental Liability).

The public may obtain environmental information whenever it is held by the public authorities or other subjects on their behalf, without being obliged to declare a particular interest. Following this approach, individuals are entitled to be informed of the rights that they are granted by law and to be advised on the exercise thereof, including assistance in the search for information.

Law 27/2006 also sets out the deadlines before which the information must be disclosed, and establishes that information will be provided in whatever way they choose. Where the information requested is not provided, individuals will be notified of the grounds on which their request was denied. Likewise, the public must be informed of the prices charged for the provision of the information.

Pursuant to Law 27/2006, the term “public authorities” refers to:

• the national government and the governing bodies of the autonomous communities;
• the general state administration, the administrations of the autonomous communities, the constituent entities of the local administration and the public law entities which are under the authority of the state, the autonomous communities or the local entities;
• public advisory bodies; and
• public law corporations and other natural or legal persons that, under the current legislation, exercise public functions, including those of notaries and property, mercantile and movable property registrars.

Corporations are required to disclose environmental information in their annual reports. In fact, according to the Spanish National Chart of Accounts, approved by Royal Decree 1514/2007, of 16 November, the Environmental Report is one of the documents that must be attached to the Report of the Annual Accounts of each company (Note 15 of the Report). Said Environmental Report must include:

• a description and the features of the more significant systems, equipment and facilities included in the company’s property acquired to minimise environmental impact and to protect and improve the environment;
• the costs incurred in the reporting period to protect and improve the environment, indicating its purpose;
• the risks covered by the provisions relating to environmental activities, with special mention of those arising from litigation in progress;
• contingencies related to the protection and improvement of the environment;
• investments carried out during the reporting period due to environmental reasons; and
• compensations to be received from a third party.

In Spain, the promotion of programmes and measures related to green financing has increased in recent years, and the incentives associated with these programmes vary depending on the characteristics, the nature of the beneficiary, and the sector of activity. Some of the most relevant programmes are:

• the aid programmes for renewables in self-consumption, storage and thermal systems;
• the MOVES III programme; and
• the PREE 5000 programme.

See 7.3 Incentives, Exemptions and Penalties.

In addition, it is important to mention the existence of green bonds, which are used to finance or refinance green projects (ie, investment in sustainable and socially responsible assets in areas as diverse as renewable energy, energy efficiency, clean transport and responsible waste management). Green bonds are a type of debt issued by public or private institutions to finance themselves and, unlike other credit instruments, they commit the use of the funds raised to an environmental or climate change-related project.

Such agreements will be supervised by the public administration or private entity promoting them and will be enforceable by virtue of the agreed conditions or, alternatively, by means of the exercise of the corresponding action before the courts.

Environmental due diligence is typically conducted on M&A, finance and property transactions. However, the scope of these due diligences may vary in accordance with the type of transaction. For instance, finance transactions usually require a more limited due diligence scope than M&A or property transactions. Nevertheless, acquisition finance transactions or project finance transactions will normally imply a bigger due diligence scope in relation to environmental law matters.

In any case, due diligences are very common in those transactions which imply companies operating in sectors which have a clear impact on natural resources and the environment.

The main goal of an environmental due diligence is to verify that the seller company complies with environmental regulations; obtains valid permits and licences as required for the relevant activity; fulfils the conditions set out on said permits and licences; and understands the legal implications of the different risks and contingencies identified. In certain sectors, it is common due diligence for the permits to be supplemented with a technical and legal analysis to mitigate liabilities arising from contaminated soil and water.

Generally, there is no express provision under which a seller is required to disclose environmental information to a purchaser. However, the seller should inform the purchaser of any environmental issue they are aware of based on the principle of good faith and to avoid subsequent claims for compensation based on hidden defects (vicios ocultos).

It is a general principle of law that the seller is liable for hidden defects in what is sold, provided that the purchaser did not know of the existence of such defects. However, the Spanish courts do not recognise the seller’s liability when the purchaser, due to its activity, cannot argue its inexperience or absence of knowledge to claim that it was at a disadvantage to the seller as, in such case, due care during the assessment and negotiation process should have enabled the purchaser to discover the environmental damage or the breach of environmental law.

However, according to Spanish regulation, where a potentially contaminating activity has been carried out, landowners have to declare such circumstance in the corresponding public deed for the transfer of the land. This declaration must also be registered within the Property Registry.

Environmental taxes are a fundamental tool that can be used to tax behaviour that is harmful to the health of the planet, based on the simple “polluter pays” principle, and they are essential to combatting climate change. In addition, in recent years, tax incentives and deductions have also been applied to those who carry out environmentally friendly actions and activities.

Some of the Most Relevant Environmental Taxes

Special tax on non-reusable plastic packaging

This tax has been applicable since 1 January 2023. It is an indirect tax that applies to the use in Spanish territory of non-reusable containers containing plastic, whether they are empty or used for holding, protecting, handling, distributing or presenting merchandise. The aim of this tax is to prevent plastic waste generation.

Tax on waste disposal in landfills and on incineration and co-incineration of waste

The Waste Disposal Tax is structured as an indirect tax on the deposit of waste in landfills, as well as on the incineration and co-incineration of waste. In this context, its purpose is to promote the diversion of waste towards less environmentally harmful options, such as recycling or valorisation.

Tax on the value of gas, oil and condensate extraction

Tax on the value of oil, gas and condensate extraction has been applicable to the companies that perform the extraction since 1 January 2016. Its purpose is to tax the value of public domain products (gas, oil and condensate) extracted in Spanish territory.

Tax on fluorinated greenhouse gases

This tax was introduced in Spain in an effort to counteract the environmental effects of halogenated hydrocarbon generation, considering its negative contribution to global warming. The tax has been applicable since 2014.

Tax on the value of electricity production

This is configured as a direct and real tax on the production of electricity, and it came into effect on 1 January 2013.

Taxes on nuclear activities

Taxes are raised on nuclear activities, such as, the production and storage of nuclear fuel and radioactive waste, or the production of spent nuclear fuel and radioactive waste resulting from nuclear energy generation.

Taxes related to the transport sector

These taxes have an impact on the preservation of the environment by taxing vehicle owners and applying deductions or exemptions, depending on the characteristics of the vehicle.

The methods used to resolve environmental disputes in Spain depend on the type of liability involved and the parties to the dispute.

• In cases of civil environmental liability between individuals or small-scale companies, the dispute is typically resolved directly in the courts of civil jurisdiction. However, in situations where environmental liability arises within large-scale companies or significant commercial operations (such as M&A, asset transactions, large infrastructure construction or project financing), it is not uncommon for the dispute to be resolved through arbitration. Although the cost will be higher, so will the expertise, and resolution timelines are often shorter compared to the civil courts.
• Cases of administrative environmental liability typically involve a public authority that enforces environmental laws, either demanding preventative or remedial actions for damage, or imposing penalties. In these situations, decisions and actions taken by the public authorities in Spain can be challenged by private individuals before a specialised jurisdiction: the administrative-contentious jurisdiction. Therefore, cases of administrative environmental liability against individuals are ultimately resolved by these courts, which either confirm or annul the decisions of the public authorities.

It would be interesting to adopt measures that provide incentives for environmental protection through aid, subsidies, compensation or other measures, rather than focusing on the imposition of penalties. In this context, the number of companies and individuals involved in improving the environment could be increased.

For instance, at consumer level, it would be interesting to reward users for the return of glass bottles or plastic packaging. With this measure, which has been implemented in other EU countries, consumers themselves maintain a clean and, at the same time, protected environment.