EU Mandates Biodiversity Restoration, Setting Up New ‘Green' Requirements Alongside 'Clean' Ones for Power Sector

This June, the European Council formally adopted a first-of-its-kind regulation that sets out to restore at least 20% of the European Union’s (EU’s) land and sea areas by 2030 and all ecosystems in need of restoration by 2050. While the Nature Restoration Law represents a significant shift toward integrating biodiversity restoration into all sectors, it will add another layer of compliance for the EU’s power sector and new considerations for project planning and operations.

At its core, the Nature Restoration Law—a central element of the EU’s 2019 Green Deal and the EU Biodiversity Strategy for 2030—seeks to restore the EU’s nature and animal species to good condition. The measure is part of a broader effort to ensure the long-term recovery of resilient ecosystems across the region. As the European Council noted, current conditions are “alarming.”

According to a 2020 European Environment Agency (EEA) assessment, only 15% of the region’s habitats—including peatland, dunes, coastal habitats, forests, and grassland—can be considered in “good condition,” and the degradation of habitats has precipitated a decline in the number of animal species.

The EEA estimates that 38% of fish populations are in “bad” condition. Meanwhile, though almost €5 billion of the EU’s annual agricultural output can be directly attributed to insect pollinators, one in three bee and butterfly species are in decline, and one in 10 are on the verge of extinction. The population of common birds in the EU has also decreased dramatically—by 36% between 1990 and 2021.

The decline is driven by a multitude of factors. The abandonment of extensive agriculture—leaving behind traditional, low-intensity farming—and the intensified management practices in agriculture and forestry have resulted in habitat destruction or degradation, the Council says. The modification of hydrological regimes, like river damming and wetland drainage, has disrupted aquatic ecosystems.

At the same time, rapid urbanization has replaced natural habitats, and pollution from industrial, agricultural, and urban sources has contaminated soil, water, and air. “Furthermore, invasive alien species and climate change represent major and growing threats to native Union fauna and flora,” it said.

New Compliance Burdens for the Power Sector

The new law aims to address the urgent need to reverse biodiversity loss and mitigate climate change by implementing legally binding restoration targets across various ecosystems, including terrestrial, marine, freshwater, and urban areas. The law notably prioritizes sites under Natura 2000, a 1992-established coordinated network of protected areas worldwide. In addition, the law introduces specific measures to reverse the decline of wild insect pollinators and to increase urban green spaces and canopy cover from 2031 onward.

While it applies regionwide, the law has specific implications for the power sector. Notably, it presumes that renewable energy plants, their grid connections, and storage assets are of “overriding public interest.”

It will mean member countries can decide not to exempt these projects as long as they’ve undergone an environmental review. But the law also includes specific restoration measures that may impact land use planning and operations for existing and new power infrastructure. New power projects, for example, will need to comply with non-deterioration measures and contribute to restoration targets, and those involving significant land use changes will require comprehensive ecological assessments. Grid enhancements and expansions must also now consider ecological connectivity and non-deterioration principles.

Eurelectric, EU Power Trade Group Has Embraced Biodiversity

Despite its new compliance burdens, Eurelectric, a trade group that represents the interests of the European electricity industry, has embraced the law. The group stresses that biodiversity—efforts to preserve natural ecosystems—must be as urgent an initiative as finding a balance between advancing industrial and energy security goals, and initiatives that prioritize decarbonization.

“Nature is deteriorating at an alarming rate. [Nearly] 80% of Europe’s natural habitats are in danger, and climate change will be the main driver of biodiversity loss by 2050,” it says. But changing course is still possible. “Our decarbonization efforts can already lower risks to biodiversity by up to 75% and contribute to reducing climate change-induced global economic losses by more than €4 trillion,” it adds.

The European industry has already made striking strides in implementing “clean power.” According to Eurelectric, in the first half of 2024, renewables made up more than 50% of all power generation in Europe, while nuclear provided a stable share of 24% (Figure 1). That’s despite declining power demand, owing “mainly due to industry relocating abroad, warmer temperatures, energy savings, and slow economic growth.”

To address the demand stagnation, Eurelectric Secretary General Kristian Ruby suggested policymakers must support the uptake of electricity to provide the necessary investment signals for clean generation. In July, the group urged the new European Commission to propose a region-wide electrification plan with a 35% indicative target for 2030 and introduce a “clear electrification indicator” in EU member countries’ national energy and climate plans. “Inaction could result in missing the EU climate targets, curtailment of renewable production, and slowing down investments in the leading sector of the energy transition,” it said.

The Emerging Challenge: Balancing Clean Energy Initiatives with Biodiversity Measures

But Eurelectric is also deeply cognizant of the challenging balance between advancing climate change initiatives—under which renewables are distinctly flourishing—and implementing biodiversity measures to protect vital ecosystems like wetlands, grasslands, forests, rivers, lakes, and marine habitats.

In Europe, this appears to have evolved into a polarized debate that often frames nature conservation and renewable energy development as opposing goals. For instance, achieving the ambitious COP28 target of tripling renewable energy by 2030 requires a stunning 3 GW of new capacity daily, which will require vast amounts of land and potentially impact natural habitats.

The trade group is moving decisively to address the emerging conundrum. In June, it released a “first-of-a-kind” guidebook, “Power Plant 2.0,” aimed at promoting a “nature-inclusive” design and good operational practices for grid and renewable projects. The guidebook lays out 12 key principles based on a “mitigation hierarchy”—a foundational step-by-step approach to “avoid and minimize adverse impacts on biodiversity” on renewable and grid project siting, building, operating, and decommissioning.

The principles essentially comprise three groups. The first group is about taking actions in a sequential manner following the mitigation hierarchy protocol. The second group focuses on identifying the right measures—both on and off-site—to bring additional biodiversity benefits, including working with local communities, populations, and national authorities. The third group relates to securing long-term benefits and ensuring best practices are shared across relevant actors and the public.

European Power Companies Leading on Biodiversity Efforts

Meanwhile, so far, several European companies have moved decisively to implement biodiversity initiatives. UK firm SSER, for example, applies the mitigation hierarchy to minimize environmental impacts to offshore wind projects throughout lifecycle phases. Efforts include selecting foundations that do not require impact piling (such as bucket foundations) and using vibro-piling or coffer dams to reduce noise levels that may negatively impact marine mammals. Projects also use noise abatement systems (for example, Big Bubble Curtains) and monitoring for marine mammals “to ensure none are within a starting distance before noisy works begin,” it said.

In another example, Austrian firm VERBUND’s €280 million LIFE Projects on the Danube and Inn Rivers, spanning Austria and Germany, focused on improving ecological connectivity and habitat conditions around hydropower plants. The projects included creating new river corridors, bypassing rivers and floodplains, restoring fish connectivity, and enhancing bird species and fish biomass.

At various wind projects in France, German firm BayWa r.e. has supported local farmers with agroecological measures, organized workshops, established natural corridors, and implemented soil conservation practices. Austrian firm illwerke, meanwhile, enhanced biodiversity at their transformer station in Bürs, Vorarlberg, by seeding species-rich plants, planting wild shrubs, implementing adaptive mowing schedules, and conducting ecological inspections.

Irish company ESB Networks trialed an alternative decommissioning method at a retired substation (Figure 2). By incorporating bat access, installing nesting boxes, planting native flowers and trees, removing non-native trees, and retaining deadwood for insects, the approach was €50,000 cheaper than standard decommissioning. It also increased bird and pollinator presence at the site.

Integrating Biodiversity Will Be Costly—But Vastly Beneficial

Eurelectric is clear-eyed that integrating biodiversity is costly. An estimated 84% of developers it surveyed for the guidebook reported added costs ranging from €25,000 to €280 million per project.

However, the “benefits transcend nature protection,” the trade group noted. With biodiversity-enhancing business models, companies could improve their reputations and garner social acceptance for new projects, potentially mitigating delays. “They can reduce the consenting and investment risks and inspire investors’ confidence and trust,” it explained. “These projects also add wider environmental benefits to local communities, build in climate and disaster resilience, and potentially reduce generation curtailments as well as operational costs, making a more attractive business case.”

Challenges remain, it notes, however. Along with high costs associated with biodiversity measures, scientific data “is also limited and there is no common guidance nor agreed metric to measure nature protection.” Another frequent issue lies in “the complex interaction between the different actors who operate in the area whose objectives, policies, and demands might clash,” it says. “It’s important to balance priorities in a way that provides the best outcomes for nature whilst also delivering on other legislative, community, and social requirements.”

The trade group lauded policymakers’ adoption of the new Nature Restoration Law in June. However, in parallel, it urged the EU to “reward biodiversity-mindful projects by increasing funds under the [Multiannual Financial Framework (the EU’s long-term budget)], facilitating the use of ecological non-price criteria in renewables auctions, and providing fiscal incentives for [power purchase agreement] buyers with a biodiversity strategy.” An EU biodiversity framework “should also harmonize the many metrics available today and provide guidance for biodiversity integration across economic sectors,” it said.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).