The legislation sets interim targets for Greece to cut greenhouse emissions by at least 55% by 2030 and by 80% by 2040 before achieving zero-net emissions by 2050.
It also engages the country to cut dependence on fossil fuels, including weaning off indigenous lignite or brown coal - once the main source of energy - in electricity production from 2028 onwards. This target might be brought forward to 2025, taking into account security of supplies.
"It's an existential matter, a very important one, because it has to do with our lives, because it has to do with our children's lives," Energy Minister Kostas Skrekas told lawmakers before the vote.
"Is this just going to help protect the environment? Νο, it's not. It also helps the country's energy security."
Greece is planning investments worth about 10 billion euros to expand its power grid by 2030, while it speeds up the development of renewables to more than double their share in electricity production.
The country, like many others, has been in the grip of rising prices for gas, electricity, fuel and food since last year, a trend that has been exacerbated by Russia's Feb. 24 invasion of Ukraine.
The Greek government has been subsidising power and gas bills and has also offered a one-off grant to vulnerable groups at a total cost of 4 billion euros ($4.29 billion) since last year.
As part of an additional package worth 3.2 billion euros, the law stipulated that Greece will cover a big part of the increases that households have seen in their power bills from December until the end of May.
Environmental group Greenpeace said the legislation was a small step towards climate neutrality and that it lacked a strategy to enable Greece to shift away from fossil fuels in a front-loaded and fast way.
