The EU Nature Restoration Regulation and the Energy Sector

The highly contentious EU Nature Restoration Regulation recently came into force. Our Planning & Environment team reviews the measures it includes for restoring ecosystems and how it interacts with other EU environmental legislation. They also look at the Regulation's legally binding targets for terrestrial, marine, freshwater, and urban ecosystems, as well as specific measures for peatlands, forests, and urban development. Finally, they highlight the balance needed between restoration goals and renewable energy development, alongside the importance of National Restoration Plans for achieving these targets.

The Nature Restoration Regulation[1] is an unprecedented EU law. It requires Member States to jointly restore at least 20% of the EU’s land and sea areas by 2030. In addition, all ecosystems in need of restoration must be restored by 2050. The Regulation came into force on 18 August 2024. It sets specific, legally binding targets and obligations for nature restoration in terrestrial, marine, freshwater, and urban ecosystems. We look at what effect the Regulation might have, and how it aligns with other EU environmental initiatives.

Main aims of the Regulation

Some of the main aims of the Regulation are to contribute to:

• The long-term and sustained recovery of biodiverse and resilient ecosystems across the Member States’ land and sea areas through the restoration of degraded ecosystems, and
• Achieving the EU’s overarching objectives concerning climate change mitigation, climate change adaptation, and land degradation neutrality.

What does it mean to restore ecosystems to good condition?

The restoration of ecosystems to good condition means assisting an ecosystem to improve its structure and functions. This process can be active or passive. The goal is to reach a state where the key characteristics of the habitat type reflect the high level of ecological integrity, stability and resilience. The qualities are necessary to ensure the ecosystem’s long-term maintenance. The aim is to conserve or enhance biodiversity and ecosystem resilience within a habitat’s favourable reference area.

To which ecosystems does the Regulation apply?

The Regulation covers all types of ecosystems, including:

• Terrestrial
• Coastal
• Freshwater
• Forest
• Agricultural, and
• Urban.

These include areas such as wetlands, grasslands, forests, rivers and lakes. Marine ecosystems are also included, such as seagrass, sponge beds and coral beds. A complete list of ecosystem types is set out in the Annexes to the Regulation. Member States will first have to focus on restoring Natura 2000 sites, starting with those in poor condition. The aim is that 30% of these will be restored by 2030, rising to 90% by 2050.

What measures must be implemented?

Member States must put in place restoration measures that are necessary to restore ecosystems to good condition. Whilst these measures must be tailored to each type of ecosystem, they generally must achieve a continuous improvement until good condition is reached. Once good condition is reached, they must ensure the condition does not significantly deteriorate, subject to permitted derogations. The permitted derogations include projects of overriding public interest and projects permitted in accordance with Article 6(4) of the Habitats Directive[2], amongst others.

Derogations for renewable energy

The Regulation specifically identifies “the planning, construction and operation of plants for the production of energy from renewable sources, their connection to the grid and the related grid itself, and storage assets” to be in the overriding public interest. However, it is open to Member States to restrict this derogation in certain parts of their territory. Any such derogation must be justified in the specific circumstances. They can also restrict it to certain types of technologies, or to projects with certain technical characteristics, in accordance with their national energy and climate plans.

Peatlands

The Regulation requires Member States to put in place measures, including the ‘re-wetting of land’, aimed at restoring organic soils in drained peatlands that are used for agriculture. The area of these lands where measures must be put in place include:

• 30% by 2030, of which at least a quarter shall be rewetted
• 40% by 2040, of which at least a third shall be rewetted, and
• 50% by 2050, of which at least a third shall be rewetted.

Many renewable energy projects in Ireland are developed in peatland areas. Therefore, there may be some concern that this will impact the area of land that is available for further renewable energy development. However, the Regulation permits Member States to reduce the extent of re-wetting if they have valid reasons. This may be where re-wetting is likely to have significant negative impacts on infrastructure, buildings, climate adaptation, or other public interests, and if re-wetting cannot take place on land other than agricultural land.

In addition, the obligation on Member States to meet the re-wetting targets does not imply an obligation for farmers and private landowners to re-wet their lands. Re-wetting of agricultural and privately owned lands will remain voluntary.

Forestry

Many of Ireland’s wind farms are constructed in areas of existing forestry, particularly in upland areas.

The Regulation requires Member States to put in place restoration measures necessary to enhance biodiversity of forest ecosystems. The objectives that Member States must meet regarding forest ecosystems include, amongst others, an increasing trend at national level of at least six out of seven of the following indicators:

• Standing deadwood
• Lying deadwood
• Share of forests with uneven-aged structure
• Forest connectivity
• Stock of organic carbon
• Share of forests dominated by native tree species, and
• Tree species diversity.

Whilst a derogation is provided for renewable energy development elsewhere in the Regulation, this section of the Regulation only provides two express justifications for a Member State not meeting this objective. They are:

1. Large-scale force majeure, including natural disasters, in particular unplanned and uncontrolled wildfire, and
2. Unavoidable habitat transformations which are directly caused by climate change.

Urban development

Member States must ensure that by 31 December 2030 there is no net loss in the total national area of urban green space and of urban tree canopy cover in urban ecosystem areas. The baseline for this calculation is the level of green space and tree canopy cover in 2024. Member States may exclude certain urban ecosystem areas from those total national areas. These exclusions apply to urban centres and clusters where the share of urban green space exceeds 45%. They also apply where the share of urban tree canopy cover exceeds 10%.

Member States must also achieve an increasing trend in the total national area of urban green space from 1 January 2031. This includes integrating urban green space into buildings and infrastructure within urban ecosystem areas. Progress must be measured every six years from 1 January 2031, until a satisfactory level is reached.

To comply with this, the Government and local authorities may have to revise national, county, and local area development plans to ensure their objectives are consistent with the Regulation. These objectives could potentially have the effect of limiting development in certain areas. This is because any proposed plans will have to ensure that there is no net loss, or potentially a net gain, of urban green space and/or urban tree canopy cover in urban ecosystem areas.

National Restoration Plans

Member States must prepare National Restoration Plans covering the period up to 2050, subject to periodic review. As part of this process, they must carry out the preparatory monitoring and research needed to identify the restoration measures required to meet the restoration targets and fulfil their obligations under the Regulation. This includes quantifying and mapping the area that needs to be restored to meet the restoration targets.

Of relevance for renewable energy developers is that the preparation of the National Restoration Plan must:

• Be coordinated with the mapping of areas that are required to fulfil at least the national contributions towards the 2030 renewable energy target
• Ensure synergies with the build-up of renewable energy and energy infrastructure and any renewables acceleration areas and dedicated infrastructure areas that are already designated, and
• Ensure that the functioning of those areas including the permit-granting procedures applicable in those areas, as well as the functioning of grid projects that are necessary to integrate renewable energy into the electricity system and the respective permit-granting process, remain unchanged.

Member States must submit their draft National Restoration Plan to the European Commission by 1 September 2026. The Commission will have six months to review the plan. The views of the Commission shall be taken into account by the relevant Member State in the preparation of its final National Restoration Plan. The final plan must be published within six months of receipt of the Commission’s views by the relevant Member State.

The Nature Restoration Regulation & the Climate Neutrality Regulation

Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality (the Climate Neutrality Regulation) sets out a binding objective for the Member States collectively to:

• Reduce net greenhouse gas emissions by at least 55%, compared to 1990 levels by 2030
• Climate neutrality by 2050, and
• Negative emissions thereafter.

The Climate Neutrality Regulation aims to:

• Prioritise swift and predictable emission reductions and, at the same time, enhance removals by natural sinks.
• Require the relevant EU institutions and Member States to ensure continuous progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change.
• Require Member States to integrate adaptation in all policy areas and promote ecosystem-based adaptation and nature-based solutions. These include solutions inspired and supported by nature, that are cost-effective, and that simultaneously provide environmental, social and economic benefits and help build resilience.

It is considered that the Nature Restoration Regulation can make an important contribution to achieving some of the objectives of the Climate Neutrality Regulation. These are maintaining, managing and enhancing natural sinks and to increasing biodiversity while fighting climate change. This is because ecosystems that are in good condition are recognised as being readily able to capture and store carbon more effectively than those in poorer condition.

Conclusion

The Nature Restoration Regulation is an unprecedented EU Regulation with ambitious targets. Its primary purpose is to restore our ecosystems and habitats to good condition. To achieve this, Member States must reflect on the condition of their own ecosystems and propose measures for restoring them to good status. The implementation of National Restoration Plans will be done with oversight by the European Commission to ensure there is accountability. Some of the Regulation’s objectives do raise potential concerns for the continued development of renewable energy projects in certain areas. However, a secondary objective of the Regulation is to reduce greenhouse gas emissions. It is hoped, therefore, that the derogations in the Regulation for renewable energy will be applied to the relevant types of ecosystems, subject to environmental assessment of specific plans.

People also ask

For more information and helpful advice about the EU Nature Restoration Regulation, contact a member of our Planning and Environment team

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Regulation (EU) 2024/1991 of the European Parliament and of the Council of 24 June 2024 on nature restoration and amending Regulation (EU) 2022/869

[2] Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora