First Greek climate law sets deadlines for ban on conventional vehicles

Greece’s parliament passed the first climate law with more flexible requirements than the original proposal, following extensive public consultations.

The National Climate Law, carrying binding 2030 and 2040 carbon emission targets as well as a commitment to achieve climate neutrality by 2050, is crucial for the country’s decarbonizing efforts.

A major point in climate law is decommissioning all lignite power plants by 2028, with a reevaluation in 2023.

Most major changes in its final form have to do with the prohibition of new heating oil burners in buildings and the restrictions for sales of new conventional cars.

Alternative fuels to be used with heating oil

Specifically, the ban on using heating oil in new buildings from 2023 has been removed for the structures that can be connected to a natural gas network. Also, the total prohibition of new heating oil systems from 2030 has been removed.

Instead, there is an obligation from 2030 to use heating oil mixed with at least 30% alternative fuels.

However, the obligation to stop the sale and installation of heating oil systems from 2025 remained in the final version of the climate law.

At the same time, the Ministry of Environment and Energy will review, by the end of 2025, the ban on the sales of new heating oil systems, as well as the timeframe for using heating oil mixed with renewable fuels.

New dates for prohibiting conventional cars and introducing electric vehicles

There are also significant changes regarding restrictions on the sales of new conventional cars. The goal of selling passengers and commercial electric vehicles exclusively from 2030 remains. However, the date may change according to the European Union’s guidelines and the reevaluation of its energy policy.

In the new climate law, there is also a one-year extension, to January 1, 2026, for the rule that only zero-emission taxis can operate in Attica and Thessaloniki and one-third of rental vehicles.

The requirement that one-fourth of new private vehicles are electric or hybrid with an emission limit of 50 grams of carbon dioxide per kilometer was also pushed back to the beginning of 2024.

Taxation of windfall profits proves to be difficult

Apart from the said issues, an amendment was included in the climate law concerning the taxation of windfall profits of power producers, intended for financing the measures to support Greek consumers during the energy crisis.

The government has announced that 90% of the profits would be taxed, but the issue is their exact and fair calculation. The Regulatory Authority for Energy’s formula was opposed by power producers, while some political parties said that the government aimed too low.

The regulator has said windfall profits are around EUR 900 million, but direct and indirect discounts to consumers must be removed before the final taxable amount. It includes the damages claimed by suppliers’ that signed contracts with consumers with fixed tariffs over the last couple of years. They said that such consumers avoided the jump in prices during the crisis, which means they were indirectly subsidized.