Civil society, businesses and politicians have become increasingly aware of climate change and its harmful impact on people, the environment and the economy in recent years.
Considerable investment in sustainability projects is needed to achieve climate targets. This context provides companies with a range of opportunities to develop new business models, e.g. based on hydrogen, e-mobility and renewable energy.
More information on hydrogen and e-mobility can be found on the following pages.
Hydrogen
the energy carrier of the future
At the same time, companies face tougher regulatory demands at both European and national level. Germany’s controversial Renewable Energy Act (EEG) came into force on 1 January 2021. Other tools available to lawmakers include tightening emissions trading, fast-track approval procedures for key infrastructure projects such as expansion of the electricity grid, and tax measures. In addition, businesses are subject to enhanced sustainability requirements, including stricter air quality control regulations, a ban or restrictions on climate-harmful gases and substances, and extended product responsibility – including restrictions on environmentally harmful packaging.
Robert Habeck’s initiative to accelerate the expansion of renewable energy, and particularly approval procedures, is very much to be welcomed.
Ursula Steinkemper, Partner
It is already apparent that environmental and climate-related regulations will be tightened even further going forward.
Given the ambitious targets for combating climate change, it is likely that changes in the energy industry will not be limited to a substantial increase in power generation from renewable energy, expansion of electricity and gas grids, and innovative integrated solutions, e.g. in the context of neighbourhood developments. There will also be an urgent need to accelerate and streamline approval procedures so that the facilities and infrastructure required to meet climate targets can be built within the necessary timescales.
The real estate industry has a key role to play in achieving climate targets. The buildings sector accounts for around 30% of German greenhouse gas emissions, which makes improving the energy efficiency of existing and newly constructed buildings particularly important for climate change mitigation. Banks and insurance companies are also increasingly looking at environmental and climate risks and basing their investments on sustainability criteria.
Our specialised interdisciplinary team can represent you in disputes related to the causing of environmental and climate damage. We also advise on all aspects of environmental and climate protection, including the following topics:
Do not hesitate to contact our experts on the topics of climate change, EEG and environment at any time.
Partner
Rechtsanwältin | Fachanwältin für Verwaltungsrecht (Certified lawyer for administrative law) | Head of Energy & Climate Change, CMS Germany
Stuttgart
Dr. Friedrich von Burchard
Partner
Rechtsanwalt
Duesseldorf
Climate change and dealing with evolving de facto and legal frameworks
Climate change is one of the greatest challenges the world faces in the coming years and decades. It will not only result in physical changes (e.g. extreme weather events, the risk of flooding and of low water levels), but also in a far-reaching restructuring of the economy. All sectors are affected by the adopted or proposed legislative changes and by other measures designed to accommodate climate change, as well as by corporate initiatives such as the pursuit of zero carbon.
We can support you around the following topics among others:
- Phasing out coal: operating restrictions on coal-fired power stations, decommissioning, compensation issues, area development options, transitional solutions (e.g. gas-fired power plants, approval procedures, construction), labour market consequences, regional development, etc.
- Lawsuits to establish corporate liability for climate damage
- Stricter and/or amended environmental controls, additional approval procedures and requirements
- Expansion of renewable energy: especially development projects (planning, approval procedures, construction, funding) and transactions
- Network expansion
- Energy storage
- Electromobility
- Advice on all activities related to hydrogen
- Various interdisciplinary topics involving development projects/neighbourhood developments, e.g. transactions and corporate law advice, energy efficiency, energy supply and mobility
- Changes in requirements imposed by banks and insurance companies due to the need to consider climate change in projects
- CO2 tax and emissions trading
Further content on climate change can be found here
Expansion of renewable energy / gas-fired power stations as a transitional technology
Coal-fired power generation is set to be discontinued in Germany by 2038. The necessary legislation was passed by both houses of the German parliament on 3 July 2020. The final report of the “Commission for Growth, Structural Change and Employment” and the German government’s climate change programme contain detailed proposals on how this target can be achieved.
To maintain security of supply, new gas-fired power stations and biomass-fired plants are needed, ideally at existing power plant locations.
Our specialists can advise you on all aspects of environmental and planning law. In particular, they provide support around regional development plans, regional planning, licensing and planning permission procedures for grid expansion projects, power plants and renewable energy projects.
Further content on renewable energy can be found here
Energy storage
Storage of electrical energy is a key element in building an electricity market that aims to eventually generate power solely from renewable sources. Energy storage facilities perform a buffer function at the intersection between volatile generation and consumption. Their flexibility makes a valuable contribution to transformation of the energy market and to energy stability.
In addition to the technological challenges posed by electricity storage, the legal and regulatory framework is also crucial to developing new business models in the storage sector. Recent years have seen the adoption of the first EU-level legal basis in this respect. German law also contains many provisions that are relevant to electricity storage, but these are spread across a number of different pieces of legislation rather than forming a coherent and consistent approach.
We can advise on all legal and regulatory issues that arise in relation to storing electrical energy.
An initial overview of the legal and regulatory framework for electricity storage in Germany is available here.
Further content on energy storage can be found here.
Network expansion for electricity and gas
The growing proportion of renewable energy poses immense challenges for the energy system. Traditionally, power plants have been built close to the point of consumption. Due to the expansion of renewable energy, European electricity trading and liberalisation of the electricity market, the geographical distance between electricity generation and consumption is becoming ever greater, thereby requiring additional transmission and distribution capacity.
The grid infrastructure needs to be adapted at all voltage levels to enable integration of the growing share of renewable energy into the energy system. To date, electricity has only ever flowed in one direction: from a large, centralised generating plant to many decentralised consumers. This is now changing as systems become increasingly decentralised. The existing grid was not designed to handle these large power transits or to feed energy back from the distribution grid into the transmission grid.
Many (planning approval) procedures for grid expansion are ongoing, and more can be expected. That applies to both the electricity and gas sectors. The approval procedures are slow and protracted, although acceleration provisions have been introduced for some grid expansion projects, combined with shorter appeal stages for third-party legal challenges. Project developers nevertheless face legally complex challenges, both in licensing procedures and during actual implementation of grid expansion projects.
Our experts can advise you on all legal issues around grid expansion and provide support with regard to regional development plans, regional planning, approval procedures and planning permission procedures for grid expansion projects.
Further content on grid expansion can be found here
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