The aim of environmental policy is to enforce environmental rights by promoting sustainable development. This is supported by appropriate management of the environment – in particular, of ecosystems and natural resources. This contributes to the development of a low-carbon society and a “green economy”, and to rational and efficient use of natural resources, including the promotion of the circular economy, which ensures the well-being and gradual improvement of the quality of life of citizens.

Public action in environmental matters is guided by the following principles:

• sustainable development;
• intra and inter-generational responsibility;
• prevention and precaution;
• responsibility;
• recovery;
• the “user pays” principle; and
• the “polluter pays” principle.

Public policies for the environment are guided by the following principles:

• a transversal approach and integration;
• international co-operation;
• knowledge and science;
• environmental education; and
• information and participation.

There are several laws governing environmental protection, which relate to specific subjects. The key pieces of legislation include:

• the Constitution of the Portuguese Republic;
• Law 19/2014, containing the bases of environmental policy;
• Law 98/2021, the “Climate Law”;
• Law 50/2006, on environmental administrative offences;
• Decree Law 151-B/2013, on environmental impact assessment;
• Decree Law 147/2008, on responsibility for environmental damage;
• Decree Law 127/2013, on industrial emissions applicable to integrated pollution prevention and control;
• Law 58/2005, Decree Law 226-A/2007 and Decree Law 119/2019, on water;
• Decree Law 102-D/2020, on waste management (Annex I);
• Decree Law 150/2015, on the prevention of major accidents (Seveso legislation);
• Decree Law 39/2018, on prevention and control of emissions of pollutants into the air;
• Decree Law 12/2020, transposing the EU Emissions Trading System (EU ETS) into Portuguese law;
• Decree Law 4/2024, implementing the Portuguese Voluntary Carbon Market (VCM);
• Decree Law 142/2008, on the conservation of nature and biodiversity;
• Decree Law 140/99, on the conservation of wild birds and the conservation of natural habitats and wild flora;
• Law 83/95, on environmental information and popular court actions (class actions);
• Law 26/2016, on administrative and environmental information;
• Decree Law 75/2015, on the single environmental licensing procedure;
• Decree Law 30-A/2022 – exceptional rules aimed at ensuring the simplification of procedures for producing energy from renewable sources;
• Decree Law 9/2007 – general noise regulation; and
• Decree Law 169/2001, on the protection of cork oaks and holm oaks.

The key regulatory bodies with authority in environmental matters are divided into two main categories.

Government Bodies

This includes the Ministry of the Environment and Energy.

Other Public Bodies

This includes:

• the Portuguese Environmental Agency (Agencia Portuguesa do Ambiente, or APA);
• the Commissions for Regional Co-Ordination and Development, one for each region (Comissões de Coordenação e Desenvolvimento Regional, or CCDRs);
• the Inspectorate General of Agriculture, the Sea, Environment and Land Planning (Inspeção-Geral da Agricultura, do Mar, do Ambiente e do Ordenamento do Território, or IGAMAOT);
• the Portuguese Institute for the Conservation of Nature and Forests (Instituto da Conservação da Natureza e das Florestas, or ICNF);
• the Portuguese Institute of the Sea and Atmosphere (Instituto Português do Mar e da Atmosfera, or IPMA);
• the Climate Agency (Agência para o Clima, or ApC) – this agency is not yet in operation; and
• the Environment Fund (Fundo Ambiental, or FA).

There is no specific co-operation mechanism concerning national key regulatory authorities in Portugal. The general administrative co-operation instruments provided for in the Code of Administrative Procedure (Decree Law 4/2015) are applicable.

Environmental law is based on two basic principles: the principle of prevention and the principle of precaution. These legal principles are implemented through rules laid down by law, regulations or sectoral and territorial plans, designed to prevent the degradation of environmental components.

Activities that may have a negative impact on the environment are prohibited or subject to an advance environmental impact assessment procedure, and in certain situations the provision of a financial guarantee is required. For such activities, permits or authorisations are also required, setting limits on the performance of those activities and establishing monitoring and reporting obligations.

The protection of the environment and the need to adapt activities to scientific developments and physical changes in the environment led to the legal development of a mechanism typical of environmental law: the temporary and precarious nature of permits and licences. Thus, the law empowers licensing authorities to unilaterally amend the licences granted and even to revoke them. In such cases, when the licensee has made investments based on the assumption of a certain duration of the licence, the law recognises the right to compensation.

Failure to comply with legal, regulatory or licensing provisions gives rise to sanctioning liability and may give rise to reparatory liability. See 4.5 Consequences of Breaching Permits/Approvals, 5.1 Key Types of Liability and 6.1 Liability for Environmental Damage or Breaches of Environmental Law.

In contrast, violations of legal provisions when obtaining licences and permits can render them null and void.

Finally, in the event of serious non-compliance with the provisions of the licence, such licence may be revoked by the licensing authority.

Some of the entities listed in 2.1 Regulatory Authorities have the power to control, inspect and monitor compliance with environmental legislation. In exercising these powers, they may request the collaboration of the police authorities. Whenever a situation of serious danger to the environment or human health is detected, they may adopt – as a preventative measure and with immediate effect – the precautionary measures that are justified, in each case, to prevent or eliminate the hazardous situation. In the worst-case scenario, such measures may entail the closure of the installation.

IGAMAOT has the right of free access to the operators’ facilities, to request examinations (including expert examinations), document collection and consultation. Throughout these actions, despite the investigated operator’s right to a prior hearing, it must be co-operative and diligent.

In general terms, an environmental permit is required whenever an activity may significantly affect environmental assets (eg, the soil, water, sea or air, or biodiversity).

The granting of some permits is preceded by a public consultation phase, where the public may suggest conditions to be imposed and express environmental concerns. Any permit granted by skipping this phase will be invalid.

The environmental licences necessary for a given project are obtained within a single licensing procedure, at the end of which the “Single Environmental Permit” is issued, an electronic title that gathers all the environmental licences identified below.

The main environmental licences/authorisations are:

• the Environmental Impact Statement – DIA (Declaração de Impacte Ambiental), DECAPE (Decisão de Conformidade Ambiental do Projeto de Execução) and DINCA (Declaração de Incidências Ambientais);
• the Environmental Licence;
• the Title for Use of Water Resources;
• the Air-Pollutant Emissions Title;
• approval decisions under the Seveso legislation;
• the GHG Permit;
• the Waste Management Operator Licence;
• the Landfill Operating Licence;
• the Installation and Operation of Integrated Centres for Recovery, Valorisation and Disposal of Hazardous Waste Licence; and
• the Water Reuse Licence.

The regulators’ traditional approach is mainly based on the logic of command and control.

A more pedagogical approach by some regulators is noteworthy, as they provide information on their websites that is useful for understanding the law.

Moreover, the law provides for the possibility of contracts being signed between public entities and private operators in certain situations, either to enable them to gradually bring their behaviour in line with the law or to involve them in the management of environmental assets.

Environmental permits may be transferred from one operator to another, whether they are natural or legal persons, as long as they are identified. However, specific conditions may have to be complied with.

In the case of breaching of an environmental approval/permit, immediate action to contain or repair the consequences of said breach may be necessary, as well as communication of the occurrence to the competent entities. These entities may establish a deadline for all required corrections to be made and schedule a visit to the site to confirm that this has been done.

Moreover, non-compliance with environmental permits may trigger environmental liability.

There are two main types of liability for environmental damage or breaches of environmental law. Specifically, there is punitive liability (administrative offence liability and criminal liability) and restorative liability (civil liability and environmental liability).

The extent of liability for non-compliance with environmental standards can be analysed from two perspectives:

• the subjects to whom the liability might be attributed; and
• the period during which the liability subsists.

The Liable Party

Environmental law is structured to attribute liability to the person who committed the unlawful act and caused the environmental damage – that is, to the person who carries out, controls, registers or notifies an activity whenever that person exercises or may exercise decisive powers over the technical and economic functioning of that activity.

As such, the criterion for attributing liability is not that of the current (or purchasing) operator or landowner, but rather the subject to whom the activity that harmed the environment can be attributed.

Liability Limitation Period

Administrative offence liability

The limitation period for administrative offences is a maximum of five years from the commission of the offence. Nevertheless, this timeframe can be extended to eight years if there is a suspension or interruption in the proceedings.

Environmental liability (for environmental damage) and civil liability

Liability for environmental damage from events over 30 years ago is time-barred. For civil liability, compensation claims must be made within three years of the injured party becoming aware of their right, as long as this is within 30 years of the event.

Moreover, environmental liability is not applicable to damage caused by any emissions, events or incidents prior to 1 August 2008 or to damage caused by any emissions, events or incidents that occurred after 1 August 2008 due to a specific activity performed or concluded before that date.

Criminal liability

The statute of limitations for crimes depends on the applicable penalty and the specific crime in question. In the worst-case scenario, criminal liability expires 15 years after the commission of the act.

Types of Liability

The violation of legal and/or regulatory provisions in environmental matters might constitute an administrative offence, entail the civil liability or environmental liability of the offender, or be considered an environmental crime.

Administrative offence liability

This type of liability is most commonly used to punish environmental violations. It corresponds to social and administrative censure for actions less severe and less socially reprehensible than criminal offences.

Administrative offence proceedings can lead to the application of fines of between EUR2,000 and EUR5 million, depending (among other criteria) on the type of offence, its perceived seriousness and the infringer’s degree of guilt. In the case of the presence or emission of one or more dangerous substances that seriously affect health, the safety of people and property, and the environment, the range of fines for the more serious offences can be doubled. Additionally, in the most serious situations, apart from fines, interim decisions (including the preventative suspension of the polluting activity) and ancillary sanctions (such as a ban on carrying out the activity or the loss of public subsidies) may be applied.

Civil liability

If an environmental offence causes damage to a third party, the perpetrator is liable to pay compensation to repair the damage caused to people and property.

Environmental liability for environmental damage

This type of responsibility is designed to repair the damage caused to the environment itself – specifically, significant damage caused to protected environmental assets. Causing environmental damage, or an imminent danger of such damage, while pursuing economic activities might lead to the liability of the perpetrator. Liability for environmental damage implies the obligation to implement preventative and repair measures, and to bear the associated costs.

Criminal environmental liability

The Portuguese Criminal Code includes four environmental crimes:

• damage to nature (species, natural habitats and subsoil);
• pollution, associated with the degradation of environmental components such as air, water and soil;
• pollution that causes a common danger, in cases where the pollution triggers danger to the life or physical integrity of a third party; and
• activities that are dangerous to the environment, including some actions concerning ozone-depleting substances, and trans-boundary movements of waste.

In the worst-case scenario, environmental crimes may lead to the application of a five-year custodial sentence. If death or physical injury results from the crime of pollution that causes a common danger, both the minimum and maximum thresholds are increased by one third.

For the crimes they commit, legal persons and similar entities are subject to the main penalties of a fine or of dissolution. The limits of the fine applicable to legal persons and similar entities are determined with reference to the term of imprisonment provided for natural persons, and one month’s imprisonment corresponds to ten days of fine. Each day of fine corresponds to an amount between EUR100 and EUR10,000, which the court sets according to (among other things) the economic and financial situation of the convicted person and costs regarding employees.

Limits and Conditions on Civil, Environmental and Administrative Liability

The limitation periods referred to above should be considered as general limits on liability.

In the case of civil and environmental liability, there are specifics concerning guilt and causation. In these kinds of liability, the assessment of the causal link is based on the likelihood and probability that the harmful act caused the damage in question. Concerning guilt, for some economic activities listed in the law, these types of liability are applicable regardless of the existence of guilt or intent.

Civil liability

Traditionally, this depends on meeting five requirements, specifically:

• fact;
• illegality;
• fault (in cases where the liability is not strict);
• damage to a third party caused by damaging an environmental component; and
• a causal connection between the fact and the damage (based on a likelihood criterion).

These conditions are cumulative, so failure to meet any one of them is sufficient for there to be no liability.

If several persons are liable, all are jointly and severally liable for the damage, even if one or more are at fault, without prejudice to the correlative right of recourse that they may exercise reciprocally. When it is not possible to individualise the degree of participation of each of the responsible parties, they are presumed to be liable in equal shares.

Environmental liability for environmental damage

Environmental liability is traditionally dependent on meeting the same five cumulative requirements listed above.

An important issue is that there are specific grounds for exclusion of liability.

Additionally, concerning fault and joint/several liability, the considerations above also apply.

Administrative offence liability

Administrative offence liability is based on the same five requirements as civil liability. However, in this case the minimum and maximum limits of the fine are reduced by half when there are circumstances prior or subsequent to, or contemporaneous with, the commission of the administrative offence that markedly reduce the unlawfulness of the act, the culpability of the perpetrator or the need for a fine.

In some circumstances, voluntary payment of the fine at the minimum amount or with a reduction of up to 25% is allowed.

Administrative Offence Liability

As far as administrative offences are concerned, legal persons are liable if the damaging activity is attributable to them. The general rules specifically state that legal persons or equivalent are responsible for administrative offences committed by their bodies in the performance of their duties.

Civil Liability and Environmental Liability (for Environmental Damage)

Regarding civil liability and environmental liability, legal persons are liable if the damaging activity is attributable to them. See 6.4 Shareholder or Parent Company Liability and 7.1 Directors and Other Officers.

Criminal Liability

Legal persons or equivalent are liable for environmental crimes when committed:

• in their name or on their behalf and in their direct or indirect interest by persons occupying a leadership position; or
• by whoever acts in their name or on their behalf and in their direct or indirect interest, under the authority of the persons referred to in the preceding bullet point, by virtue of a breach of their duties of vigilance or control.

It is understood that the bodies and representatives of the legal entity, and whoever has the authority to exercise control over its activity, occupy a leadership position.

The criminal liability of legal persons and similar entities is excluded when the agent has acted against express orders or instructions from those in charge.

The criminal responsibility of the legal person does not exclude the individual liability of the actual perpetrators, nor does it depend on their liability.

Climate Risk in Corporate Governance

See 6.5 ESG Requirements.

The aims of green taxation are to penalise those causing pollution and damage to the environment, to reduce energy dependence from abroad, and to encourage more sustainable production and consumption patterns. In so doing, green taxation reinforces both the freedom and liability of citizens and companies, and promotes efficiency in the use of resources.

From a taxation perspective, there are essentially two groups of mechanisms to pursue environmental goals:

• deterrence taxes (or fees or financial contributions), in line with the “polluter pays” principle; and
• tax benefits, such as exemptions.

Moreover, environmental components may influence the calculation formulae of classic taxes such as corporate income tax (Imposto Sobre o Rendimento das Pessoas Coletivas, or IRC).

The following are some examples of environmental tax mechanisms (eg, deterrence taxes, fees and contributions) currently in force in Portugal.

• Waste management fee (Taxa de Gestão de Resíduos) – this aims to encourage the reduction of waste production, stimulate compliance with national waste management targets and improve the performance of the sector.
• Fees due under Producers Responsibility Organisation (PRO) schemes (eg, ecovalor paid to the PRO and contribuição financeira paid to public services for municipal waste management).
• Water resources management fee (Taxa de Recursos Hídricos) – this aims to compensate for the environmental cost inherent in activities likely to have a significant impact on water resources.
• Carbon tax (TCO₂) – this is levied on sectors not included in the ETS. This tax is indexed to the price of carbon in the ETS sector.
• Road vehicle tax (Imposto Único de Circulação), vehicle excise duty (Imposto Sobre Veículos) and excise duty (Impostos Especiais de Consumo) – these seek to burden taxpayers in proportion to the environmental cost they cause (eg, the influence of particle or CO₂ emission levels in the calculation of the road vehicle tax).
• A financial contribution for light or very light plastic bags and for single-use take-away packaging for meals (save for packaging used for meals handed out under charitable schemes or, being 100% recyclable, having at least 25% of recycled materials incorporated).
• A tax on less energy-efficient light bulbs.
• A carbon tax on air and sea travel.
• A contribution for single-use plastic, shopping bags or aluminium packaging for ready-made meals.
• The influence of parameters such as location in areas of urban regeneration, energy efficiency or use of renewable energy (eg, 50% reduction in the municipal property tax rate when the property is exclusively used in the production of energy from renewable sources) in the calculation of municipal property tax (Imposto Municipal Sobre Imóveis).
• Expenses related to exclusively electric vehicles are not subject to autonomous taxation for IRC or personal income tax (Imposto sobre o Rendimento das Pessoas Singulares, or IRS), provided that the acquisition cost does not exceed EUR50,000. There is the possibility of deducting value-added tax (VAT) on the purchase, manufacture or importation, leasing and conversion of electric vehicles or plug-in hybrids, provided that the acquisition cost does not exceed EUR50,000, as well as charging-related expenses.

Tax benefits include the following:

• IRC exemption for PROs – to manage specific waste flows during the entire licensing period for results which, during this period, are reinvested or used for the purposes legally attributed to them;
• exemption from property transfer tax (Imposto Municipal a Transmissão Onerosa de Imóveis) and stamp duty (Imposto de Selo) on acquisitions that fall within forest intervention areas;
• a vehicle purchase tax (Imposto Sobre Compra de Veículos) exclusion for non-motorised vehicles and exclusively electric vehicles or those powered by non-combustible renewable energies;
• exemption from road vehicle tax for non-motorised, exclusively electric vehicles or those powered by non-combustible renewable energies;
• deductible expenses in higher proportion to their nominal value, such as the expenses of car-sharing and bike-sharing systems, with the acquisition of fleets of bicycles, and with electricity and vehicular natural gas for vehicle supply, etc;
• possibility of deducting VAT on the purchase, manufacture or importation, leasing and conversion of electric vehicles or plug-in hybrids;
• exemption from municipal property tax, municipal property transfer tax and stamp duty for buildings completed more than 30 years ago or located in urban regeneration areas, provided they fulfil certain conditions – namely, that they have been rehabilitated; and
• under IRC, there is the possibility of deducting provisions set up to cover the cost of repairing environmental damage.

Administrative Offence Liability

Given the legal provisions of the framework law for environmental administrative offences, it is not clear whether this type of liability can also extend to shareholders.

Civil Liability and Environmental Liability (for Environmental Damage)

Regarding civil liability and environmental liability, if the operator is a commercial company that is in a group or control relationship, the environmental liability extends to the parent or controlling company when there is abuse of legal personality or illegal fraud.

The main ESG requirements have been enacted at the EU level and are directly applicable, notably through the Taxonomy Regulation (which offers a unified system for classifying environmentally sustainable activities, aiding financial actors in distinguishing between and comparing environmentally friendly investments) and the Sustainable Finance Disclosure Regulation and the respective delegated acts (aimed at standardising how sustainability-related information in the financial sector should be reported). Financial intermediaries and alternative investment fund managers must also integrate ESG risks into their operations, as dictated by the Commission Delegated Regulations (EU) 2021/1253 and 2021/1255.

Supervision and Enforcement

ESG requirements are mainly supervised and enforced by:

• the Bank of Portugal;
• the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários, or CMVM); and
• the Supervisory Authority for Insurance and Pension Funds (Autoridade de Supervisão de Seguros e Fundos de Pensões, or ASF).

The Bank of Portugal has a dedicated committee that streamlines its ESG initiatives annually and has shown its commitment to exploring the interaction between the environment, the financial system and monetary policy. The CMVM ensures that regulated companies maintain transparency in financial and sustainability practices and promote the integration of ESG factors in market practices. The ASF analyses the environmental dimension and ESG rating application to the national insurance sector’s investment portfolio, overseeing the regulation and supervision of insurance, reinsurance, pension funds and their managing entities.

The following legal requirements at the national level should be highlighted.

• The Climate Law mandates that private companies prioritise climate and environmental balance. Directors are also expected to consider and disclose climate change-related risks to companies.
• The Structured Deposits Law (Law 35/2018) mandates that credit institutions include sustainability objectives in the design of structured deposits and provide transparent information about their sustainability characteristics. This also extends to marketing and advisory roles.
• The Asset Management Legal Framework (Decree Law 27/2023) dictates that asset managers incorporate sustainability risks, ensuring that they have the resources and procedures to do so effectively.
• The Investment Firms Regulation (Decree Law 109-H/2021) emphasises the importance of investment firms having strategies and internal policies to manage and control sustainability risks that can adversely affect investment value.
• The Commercial Companies Code mandates that major corporations disclose non-financial and diversity information in accordance with the EU Non-Financial Reporting Directive. Although the Corporate Sustainability Reporting Directive (CSRD) has not yet been transposed into Portuguese law, the CMVM has issued guidance clarifying that companies already subject to the obligation to publish non-financial statements should do so in accordance with the European Sustainability Reporting Standards.
• The Securities Code requires each listed company to establish and disclose its remuneration policy on its website and explain how the remuneration policy contributes to the sustainability of the company. In addition, the remuneration policy must set out the criteria for granting variable remuneration, if applicable, and how these criteria contribute to the company’s business strategy, long-term interests and sustainability.
• The Balanced Gender Representation Law (Law 62/2017) ensures gender parity in management positions and the supervisory bodies of public sector entities and listed companies.
• Companies with over 75 employees must hire a percentage of staff with significant disabilities, as per the Employment of Persons with Disabilities Law (Law 4/2019).
• The Labour Code guards against discrimination and addresses workers’ health and safety.
• The Gender Salary Equality Law (Law 60/2018) promotes gender-neutral pay structures.
• The Protection for Whistle-Blowers Law (Law 93/2021) safeguards individuals reporting specific violations.

Environmental Impact Assessment (EIA)

During the post-evaluation phase of the EIA, audits should be conducted to ensure compliance with the terms and conditions set forth for project approval within the EIA process.

In exceptional and duly substantiated cases, additional measures may be established in this phase to minimise or compensate for significant unforeseen negative impacts.

Control of Major-Accident Hazards (Seveso)

Higher hazard levels, as established in the Seveso legislation, are subject to specific prevention measures, which come with various obligations that are subject to annual audits and inspections.

Waste Treatment Activity

Establishments where waste treatment activities are carried out are subject to inspections to ensure compliance with the legal conditions established in the licence, as well as an overall re-examination of their operating conditions every seven years.

EU ETS

Under the ETS regime, there is an annual procedure of monitoring, reporting and verifying operators’ emissions. This is known as the ETS compliance cycle.

Environmental Administrative Offences

Directors, managers and other persons who hold management positions (even if only de facto) in legal entities (even if irregularly constituted) and any other similar entities are responsible on a subsidiary level for:

• fines imposed for infractions regarding acts that took place during the period when they held their positions, or for previous acts if they are responsible for the company’s assets or the legal person is unable to pay the fine;
• fines due for previous acts when the definitive decision to apply them was notified during their term of office and the failure to pay is attributable to them; and
• the procedural costs resulting from the proceedings brought under the framework law for environmental administrative offences.

If several individual persons are responsible for the wrongful acts or omissions that result in the insufficiency of the assets, their responsibility is joint and several.

Civil Liability and Liability for Environmental Damage

When the harmful activity is attributable to a legal person, the obligations arising from the legal framework on liability for environmental damage are jointly and severally levied on such person’s managers, directors or persons with leading functions.

Environmental Crimes

Persons occupying a leadership position may be liable on a subsidiary basis for the payment of fines and compensation for which the legal person or equivalent entity is convicted.

If several individual persons are responsible under these terms, their responsibility is joint and several.

Environmental insurance is available in the Portuguese legal system. Regarding potentially harmful activities, it is mandatory to have a financial guarantee, which can be provided by taking out environmental responsibility insurance. This type of insurance usually covers multiple risks arising from pollutant discharges into an environmental asset due to the activity of the insured.

Normally, insurers exclude damage caused by workers’ errors and intentional acts. However, IGAMAOT believes that these exclusions violate the law. There are currently several administrative offence cases on this subject, and the courts have yet to rule on the matter.

As referred to in 6.1 Liability for Environmental Damage or Breaches of Environmental Law, liability falls upon the operator to which the activity that harmed the environment is attributed. Therefore, financial institutions or lenders are not, in principle, liable for the offences that the operator commits.

Nevertheless, financial institutions and lenders should consider the provisions set out in the Climate Law.

In fact, as far as sustainable financing is concerned, several guiding principles were laid down that should guide the financial policies, financial management, capitalisation support and borrowing of the state and of private entities. Examples include the principle of accountability and prudence, which is intended to incorporate climate risks in the valuation of assets and liabilities, and the principle of transparency, which promotes the disclosure of information regarding the impact of management and investment decisions by managers, investors and consumers. Lack of transparency or failure to share information is considered an improper sale, under the regulation of the market of financial instruments.

Furthermore, failure to take climate risk and climate impact into account in financing decisions is considered a violation of fiduciary duties.

See 6.5 ESG Requirements.

The liability of financial institutions can only be safeguarded contractually. Specifically in the case of the constitution of a mandatory financial guarantee (see9.1 Financial Institutions/Lenders), the limits of the financial institution’s liability will be stated in the terms of the bank guarantee.

Civil damages recovery relating to claims for environmental damage may occur provided that private interests are damaged as a consequence of the event (causal link). Environmental assets are often private property or located on private property. Thus, the injured party may bring an action for damages based on civil liability whenever someone offends their rights or interests by damaging any component of the environment. In other words, the act committed by the agent is unlawful and, as such, raises civil liability if it violates another person’s subjective right – such as the right to property – or if it violates any legal provision intended to protect the interests of others. In these cases, the agent is obliged to repair the damage resulting from the offence.

Compensation is enforced in kind (eg, replacing injured specimens with new ones) or by paying the corresponding amount of money whenever the former is not feasible.

The real damage thus assessed works as a limit on the eligible compensation, although sometimes – especially when the unlawful act is not intentional – the judge is granted powers to reduce the compensation equitably, considering the degree of culpability of the agent, its economic situation and that of the injured party, as well as other circumstances of the case. This principle of equitability may also apply in cases where there are several agents: compensation is allocated according to the degree of culpability of each one and not merely pro rata. See 5.3 Key Defences and 6.1 Liability for Historical Environmental Incidents or Damage.

The principle of equivalence between damage and compensation applies to environmental civil claims to its full extent. Thus, exemplary or punitive damages have no place in Portuguese law.

It should be noted that the deterrence effect usually linked to exemplary or punitive damages is pursued by the application of significant penalties when the unlawful act is also specifically qualified by the law as an administrative offence.

The Portuguese Constitution recognises the fundamental right to bring a popular action, as part of the set of political participation rights. The Constitution expressly lists the environment as an asset that can be protected by popular action. This means that, by means of popular action, any citizen, as well as certain associations and organisations, can access the judiciary system to protect legal situations that are not susceptible to individual appropriation, as is often the case with environment-related matters. This protection can be exercised judicially or before the administrative authorities.

Institutional parties can bring popular actions, and it is important to emphasise the role of environmental non-governmental organisations (ENGOs), which have been granted broad legal standing in environmental matters. ENGOs are, in principle, exempt from paying court fees and benefit from a 50% exemption from the fees due for accessing environmental information held by public authorities.

Whether or not they have a direct interest in the legal action, ENGOs have legal standing to:

• bring the legal actions necessary to prevent, correct, suspend and put an end to acts or omissions of public or private entities that constitute a threat to or may damage the environment;
• bring legal actions to enforce civil liability in relation to the acts and omissions referred to above (although they are not entitled to any financial compensation arising from them, the role of ENGOs here is to open the court case and organise the joinder of any entitled injured parties to the court action);
• take legal action against administrative acts, decisions and regulations that violate the legal provisions that protect the environment; and
• lodge complaints or accusations, act as interested parties (assistentes) in criminal proceedings for crimes against the environment, and monitor administrative offence proceedings, should they so require.

There is a growing interest in the environmental impacts of public and private projects.

EIA Procedure

The court annulled the environmental impact decision regarding the Crato multi-purpose hydraulic development project, on the grounds that the analysis of project alternatives was not properly carried out, that an adequate assessment of the project’s effects on the Natura 2000 Network areas was not conducted, and that the cumulative effects of infrastructure associated with the project were not considered (Case No 299/22.1BECTB). This action was brought by an environmental association against the licensing entities. An appeal was filed, which is currently pending a decision.

Citizens’ Right Not to Be Disturbed

In matters of noise, there is case law in Portugal deciding, in general terms, that the rights of the residents should prevail over the rights of the operators of economic activities, and this may happen even if the licensing is valid and noise limits are not exceeded. Consequently, in such circumstances, operators may be obliged to adopt mitigation measures in order to reduce the noise produced.

Specifically, there is case law (Case No 2209/08.0TBTVD.L1-1) in which the court upheld the right of inhabitants living in the vicinity of a wind farm to have wind turbines removed or their operation suspended at a certain time of the day, on the grounds of noise emission and/or the shadows from the wind turbines.

The Portuguese courts have taken the view that, in these situations, there is a collision of rights at issue between:

• the right to rest and sleep and the right of the residents to tranquility; and
• the economic right of the wind farm – whose wind turbines emit noise and/or shadows – to operate as a business.

In the abstract, it is considered that the rights of the residents should prevail over the rights of the economic operator. However, even if the economic activity is licensed, it has been held that this assessment should be made considering each specific case individually. Therefore, the residents are required to definitively demonstrate that the location in question is their home and that they are truly affected by such noise.

Animal Rights

Concerning the right to civil compensation, Law 90/88 specifies that the State is liable for compensating all citizens who are directly harmed by actions of Iberian wolves (Canis lupus signatus). In this context, the court decided (Case No 00242/05.2BEMDL) that when Iberian wolves kill animals owned by citizens, this damage is eligible for compensation by the State, as is any emotional damage suffered by the owners. This is because the above law does not differentiate between property damage or personal injuries, although the complementary legislation in force at the time of the decision (Decree Law 139/90) referred to damage to animals. The current complementary legislation provides far more detailed rules on compensation for damage to animals.

Furthermore, a decision from the court (Case No 00036/06.8BEPNF) established that the operation of a waste water treatment plant that is licensed for this purpose cannot be grounds under normal conditions to award compensation to people living nearby. The court stressed that the aim of these plants is to prevent the contamination of soils and water, and that a public interest objective of this type will prevail over any minor inconveniences that were eventually suffered by these people. As such, it does not trigger the right to compensation.

From another perspective, to protect a bat colony, the court decided in a protective order (Case No 06793/10) that a windmill on a wind farm could only be constructed and installed at certain times of the day and during certain months of the year. Moreover, its operation could only occur at a certain speed and in specific time periods. This demonstrates that the courts decide on environmental matters regardless of the presence of other legal institutions. On comparable grounds, similar measures have been imposed by the competent authorities under the EIA procedure on project sponsors.

It is possible to use indemnities or other contractual agreements to transfer liability to another party – these are subject to the general principles of the law, such as good faith and proportionality.

These types of contracts do not have any binding effect on the regulators, who will always take into consideration the party responsible for the activity that harms the environment. This follows the accountability and “polluter pays” principles.

The contracts might, however, have an influence on the regulators, especially in a scenario where the damaging activity is continued and where it may be difficult to locate in time the fact that gave rise to the damage and establish a causal link with an operator.

In water legislation, in cases of non-compliance with the law, it is possible for adaptation contracts to be signed between the licensing authority and the operator. These contracts provide a recovery plan that will allow the operator to remedy the illegalities, and may also provide the obligation to install an environmental management system and carry out periodic environmental audits.

There are no specific laws concerning contaminated land. A draft law has been under discussion in Portugal since 2015 and a proposal for a European Directive on soil monitoring and resilience was released in 2023, but no official publication of these laws has yet occurred.

Nevertheless, the prevention of emissions into the soil is covered by environmental procedures, such as environmental licensing and the EIA. Furthermore, the law of responsibility for environmental damage determines that soil damage must be communicated to the appropriate authorities within 24 hours. For further details concerning self-reporting obligations, see 16. Environmental Disclosure and Information.

Considering the absence of regulation on this matter, the APA recommends that, in the case of transfer of property on land where potentially polluting activities have been conducted or where there are signs of contamination, a technical quality assessment be carried out.

The APA has issued supporting documents about the technical requirements to use in contamination assessments and remediation operations.

If the soil contamination creates a significant risk to human health and the environment (environmental damage), remediation can be demanded from the liable party referred to in 6.1 Liability for Historical Environmental Incidents or Damage. However, the public authorities may intervene as a last-recourse solution if the operator does not act accordingly or if it cannot be identified.

Furthermore, according to the Waste Management Act, in contamination situations that are not considered environmental damage, if the current owner wishes to excavate contaminated soil and the liable operator is not identified, it may have to take on the remediation operations under the terms of the previously obtained licence.

Soil remediation operations aim to remove the source of contamination and treat the contaminated soil so that the contamination no longer poses an unacceptable risk to human health and/or the environment, taking into account its current or intended use. Although responsibility for soil remediation can be transferred to a party that did not cause the contamination, the party that did cause it remains liable to the regulatory authorities.

See 5.3 Key Defences.

See 5.3 Key Defences.

From another perspective, if any legal or natural person is aware of a situation of contamination or environmental damage, a complaint may be made to the competent authorities – even if the person concerned did not suffer any damage as a result of said situation.

An investigation may be triggered following information disclosure by the operators, a complaint from any third party, or inspections performed by the public authorities.

Regarding the investigation process, see 4.1 Investigative and Access Powers.

Key Policies

The key policies to combat climate change are based on fundamental principles of environmental law, particularly the principle of sustainable development, the “polluter pays” principle and the principle of intergenerational solidarity.

In particular, the following goals have been set to tackle climate change:

• a reduction in greenhouse gas (GHG) emissions;
• improving the capacity for CO₂ sequestration; and
• adaptation to expected climate change impacts.

Planning Instruments

There are several important planning instruments to achieve these goals, of which the following stand out:

• at the European level, the European Climate Law (Regulation (EU) No 2021/1119) establishing the framework for achieving climate neutrality in the EU by 2050, which entails a zero balance between GHG emissions and their removal; and
• at the national level, the National Energy and Climate Plan 2030 (PNEC2030) (Council of Ministers Resolution 53/2020), which is under review and establishes policies for decarbonisation of the economy, energy efficiency and energy transition, as well as goals for sectors to reduce GHG emissions, among others.

Legislation

There is legislation that addresses GHG emissions and seeks to achieve the established goals, namely:

• Decree Law 12/2020 (transposing Directive 2003/87/EC), which establishes the framework for the trading of licences for the emission of GHG, along with Decree Law 93/2010, which provides such a framework for the scheme; and
• Decree Law 145/2017 incorporating Regulation (EU) 517/2014 into Portuguese law, which aims to reduce GHG emissions.

The Climate Law sets forth an ambitious approach to climate change. Several instruments are provided to prevent and adapt to climate change, including tax and monitoring by specific bodies. This law also introduces some significant measures, such as:

• climate change impact assessment of parliamentary or government laws;
• identification and quantification of avoided GHG emissions in the State’s general accounts, with a breakdown of the information for each climate protection measure implemented;
• progressive elimination of public funds for fossil fuel usage until 2030;
• a ban on prospection or exploitation of oil;
• a ban on using coal for electricity generation from 2021 onwards; and
• a ban on using fossil natural gas for electricity generation from 2040 onwards, effective only if energy safety is considered safeguarded.

Portuguese climate change legislation was revised to transpose Directive (EU) 2023/959 amending Directive 2003/87/EC.

Furthermore, aligned with the European Commission’s strategy, the Portuguese government enacted a law to establish and regulate a VCM. This market lets companies buy carbon offsets voluntarily, supporting their internal climate goals beyond mandatory regulations. The act also sets standards, project eligibility and mechanisms for issuing, transferring and using carbon credits in a State-managed market.

The European Climate Law provides that climate neutrality should be reached by 2050. To achieve this, a goal has been set to reduce GHG emissions at the EU level by at least 55% (compared to 1990 levels) by 2030.

PNEC2030

PNEC2030 governs the main climate action goals, pursuant to and in compliance with Regulation (EU) 2018/1999 of 11 December 2018 on the Governance of the Energy Union and Climate Action. The first version of PNEC2030 was approved before the enactment of the new European Climate Law and establishes that the reduction of GHG emissions must be between 45% and 55% (compared to 2005 levels). It also defined the following goals by sector for the reduction of GHG emissions, for 2030 in comparison to 2005:

• 70% for services;
• 35% for the residential sector;
• 40% for transport;
• 11% for agriculture; and
• 30% for the waste and industrial waste water sector.

PNEC2030 was recently reviewed to accommodate the most recent strategy on an EU level.

VCM

See 14.1 Key Polices, Principles and Laws Relating to Asbestos and PCBs.

Asbestos

The legislation that regulates the protection of workers against the risks of exposure to asbestos at work is Decree-Law 266/2007 of 24 July 2007. The law determines that employers must use all available means to reduce the exposure of workers in the workplace to dust from asbestos or materials containing asbestos, and must restrict exposure to the limit value (0.1 fibres per cubic centimetre over a daily period of eight hours).

Furthermore, the removal of material containing asbestos – as well as the wrapping, transportation and management of the corresponding construction and demolition waste – is subject to a specific regulation, Ordinance No 40/2014 of 17 February 2024, and may only be performed by duly licensed waste-management operators.

PCBs

The management of polychlorinated biphenyls (PCBs) and equipment containing them is regulated by Decree-Law 277/99 of 23 July 2024. This law stipulates that owners of equipment containing more than 5 dm³ of PCBs must notify the National Waste Authority annually of the quantity they hold.

Holders of PCBs and equipment containing them are also obliged to decontaminate or dispose of them in accordance with the timetable and other conditions established by the law. PCB decontamination and/or disposal operations must be carried out by companies duly licensed by the National Waste Authority.

The General Framework on Waste Management (RGGR), Annex I of Decree-Law 102-D/2020, is the cornerstone of waste law in Portugal. Decree-Law 152-D/2017 (UNILEX), the Portuguese regime on extended producer responsibility (EPR), is also relevant for the following waste flows:

• packaging (until EU Regulation 2025/40 of 19th December comes into force);
• used oil
• used tyres
• electric and electronic equipment
• end-of-life vehicles
• furniture
• mattresses; and
• self-caring health products.

The waste flow of batteries is regulated by EU Regulation 2023/1542, of 12th July.

The RGGR sets out the main principles and rules on responsibility, liability and regulatory conditions for waste management, in line with Directive 2008/98/EC, known as the Waste Framework Directive. Among these principles, the following are the most important.

• The responsibility for waste management – this general principle establishes the waste producer as the person responsible for the management of their own waste under a licensed enterprise (of the responsible person or of a third person), save for urban waste, which is managed by the public service for waste management. A special EPR principle applies to the person placing products on the market resulting in waste pertaining to one of the specific waste flows set forth in UNILEX. EPR obligations are to ensure the management of the life cycle of the product under a PRO or under a licensed individual scheme.
• The waste management hierarchy – this involves setting a priority order in waste prevention and waste management options – ie, prevention, preparation for reuse, recycling, waste-to-energy recovery and other forms of recovery and, as a last resort, disposal.
• The planning of waste prevention and waste management – this is government planning, notably providing certain targets for which some persons (usually PROs) are accountable.
• The proximity of waste management operations to the place where the product became waste.

This legislation also covers waste transportation and establishes rules and schemes on urban waste, construction and demolition waste, as well as dangerous waste. Finally, it sets out the main provisions on the licensing procedures for waste management operators.

To create the conditions necessary for a circular economy, the RGGR has also introduced rules on by-products and end-of-waste status, as well as other forms of waste declassification.

Environmental liability falls on the person responsible under the applicable law, and sanctions and regulatory responsibility cannot be transferred. However, from a contractual standpoint, the costs relating to environmental responsibility/liability may be transferred or retained under the parties’ agreement.

Transfer of Liability

When a party responsible for waste management delivers the waste to a third party, such as a licensed waste management operator or any other operator authorised to deal with it (eg, a PRO or public urban waste management system), the first party’s liability for waste management ceases and it is transferred to these operators. To properly transfer their responsibility, the person concerned must be sure that the chosen operator’s scope of licensing covers the waste that is being delivered for management.

Documentation

Evidence on the proper management and circulation of waste can be found in the documents that waste producers, transporters and final recipients are obliged to fill in, such as electronic waste notes (e-GAR), which must accompany all waste transport operations and set out information on the above players and the waste. Likewise, waste producers must fill in and submit annual waste record charts to the APA – eg, on the types and quantities of waste produced and to whom it was delivered for transportation and treatment.

The eco-design of products, take-back schemes and recovery obligations are prominent in specific waste flow regulations (listed in 15.1 Key Laws and Regulatory Controls).

Information for End Users

Concerning goods in general, producers must ensure that their end users can obtain the necessary information about the possibility of reusing the goods and their components and about their dismantling, as well as information about substances of high concern. In addition, specific regulations need to be enacted, and products are not to be placed on the market unless some quotas of recovered materials are incorporated into them. For specific waste flows, producers must also provide end users with certain information, such as on:

• waste prevention measures;
• their contribution to reuse and preparation for reuse;
• existing take-back and collection schemes; and
• the prohibition on littering.

UNILEX

UNILEX is based on two main features and brings into effect the EPR principle set out in European law. Producers placing products on the market under these flows (eg, packaging) must sign up to one of the corresponding PROs, by which the producers’ responsibility is transferred to the manager of such scheme. Adhering to a PRO triggers a payment obligation of a regulatory fee (ecovalor) intended to cover all the costs of waste management vis-à-vis the products placed on the market and declared to the PRO.

These producers can implement an individual scheme by carrying out the waste management operations themselves, subject to the prior approval of the APA. While provided for in Portuguese law, individual schemes are rare, though this solution is of growing interest to big players under the EPR.

Take-Back

Regarding take-back, if the producer of the tyres or of the electrical and electronic equipment is simultaneously the seller to the final user, it is obliged in some circumstances to take back the waste arising from those goods, at no cost. If the producer is not the seller to the end user, it must provide for the creation and implementation of a collection grid and pay the corresponding costs.

Deposit Refund System

In 2024, Portugal created a mandatory deposit refund system (Sistema de Depósito e Reembolso, or SDR) applicable to non-reusable plastic and metal beverage bottles of less than three litres. This SDR, carved out of the universe of general packaging EPR systems, will be managed by special-purpose PROs operating in a competitive environment – with SDR Portugal currently being the only licensed PRO for this packaging stream. The objective is to encourage end users to return their packaging to designated collection points by refunding a deposit paid at the time of purchase, thereby enhancing the recycling potential for this packaging waste.

The goal fixed by the Portuguese government is the recycling of at least 90% of this packaging waste by 2029.

The Circular Economy

Portuguese law intertwines production and recovery in line with the principles of the circular economy. For instance, secondary raw materials obtained from the recycling of packages must be incorporated, whenever possible, into the production of packages, and electrical and electronic equipment must be designed for ease of dismantling and the recovery of waste, components and materials. The producers of this equipment must also do so bearing in mind the goals of resource efficiency, the reduction of dangerous chemical products and the durability of the products. The producers of batteries must also, among other requirements, design these so that they progressively contain fewer dangerous substances.

Disposal

Finally, disposal may occur in the form of incineration – especially waste-to-energy incineration – or landfilling. Requirements for disposal are directly linked to the principle of hierarchy of waste management options and waste characteristics (eg, hazardousness).

Waste operators can only manage waste under a specific permit issued by public entities. It is usual for these permits to set out obligations on the proper handling of the waste to avoid contamination events.

Furthermore, for the decommissioning of a waste treatment plant, the operator must follow the conditions specifically established in the permit and must present a waiver request alongside an assessment of the state of the soil. Maintenance actions may also be required after the plant’s closing. Regarding the obligation to take over a financial guarantee, see 8.1 Environmental Insurance.

An application for a soil remediation licence must contain an assessment of the local contamination, including a risk analysis for human health and/or the environment, as well as a definition of the decontamination objectives, a timetable and a monitoring plan to assess the effectiveness of the operation. Decontamination operations are subject to a final inspection by the licensing authority (CCDR).

Regarding the consequences of non-compliance, see 4.5 Consequences of Breaching Permits/Approvals.

Responsibility to Inform the Competent Authority

The law determines that operators must immediately inform the competent authority of all matters relating to the existence of an imminent threat of environmental damage, of the preventative measures taken, and of the success of these measures in preventing damage. If environmental damage actually occurs, the operator must inform the competent authority of all the relevant facts within 24 hours. These obligations are usually included in the operators’ environmental permits and are preferably fulfilled by electronic means.

Without prejudice to these obligations, the competent authority may, at any time, require the operator to provide information on an imminent or suspected threat of environmental damage, or on damage that has already occurred. All prevention and remediation costs are paid by the operator.

Responsibility to Inform the Public

Concerning information to the public, the competent authorities must inform health authorities about any imminent threats of environmental damage that could affect public health.

Additionally, public entities must ensure immediate release of environmental information in case of an imminent threat to human health or the environment, caused by human actions or natural phenomena, enabling at-risk populations to take preventative action. Besides that, no general warnings to the public are required, unless a warning is considered to be a necessary prevention measure.

Periodic Reporting

Conversely, operators must regularly report on their environmental performance, including water discharge and abstraction quality and quantity, atmospheric emissions and waste production (see 16.3 Corporate Disclosure Requirement).

The law provides that all people have the right to access environmental information by consulting, reproducing or being informed of the existence and content of such documents. Applicants do not have to provide a specific interest to exercise this right; however, the request for access to environmental information may be subject to additional requirements, and it may be denied or reduced.

In contrast, the law provides for a duty, applicable to public authorities and bodies, to actively disclose (electronically) certain parts of this information, in such a way that it is publicly accessible.

Entities Obliged to Disclose Environmental Information

This legal framework applies to all public entities. It also applies to private associations or organisations in which public entities exercise powers of management control, or appoint, directly or indirectly, the majority of the members of the administrative, management or supervisory body. Furthermore, it applies to entities responsible for managing public archives and entities actually performing an administrative role or exercising public powers. This includes entities holding concessions or delegations of public services. In some cases, the law also covers documents held or produced by any entities with legal personality that have been created to satisfy, in a specific manner, needs of general interest.

Moreover, this framework applies to any natural or legal person, of a public or private nature, that belongs to the indirect administration of the bodies or entities referred to above and which has duties or roles, or which performs public administrative functions or provides public services, relating to the environment. This includes public corporate entities, owned or part-owned companies, and concessionary companies. It also includes any natural or legal person that holds or materially maintains environmental information on behalf, or on account, of any of the bodies or entities referred to. Finally, this law also applies to entities that met the above requirements at an earlier time, for documents corresponding to that period.

The public can also be informed of, and participate in, environmental issues during the public consultation periods.

Companies are obliged to disclose environmental information in three different ways, as follows:

• to the general public, by making information available on their websites or at their premises (Seveso legislation);
• to public bodies, which will analyse it and provide conclusions to the company only; and
• to public entities that are subsequently obliged to make the information available to the general public – for example, following requests to obtain an Environmental Licence (Decree-Law 127/2013) or those within the EIA procedure (Decree-Law 151-B/2013), the competent entity must disclose this information via its website.

Companies that hold an Environmental Licence are also required to send an annual environmental report to the APA, to demonstrate compliance with all the conditions set by the Environmental Licence.

The management report that companies must prepare under corporate legislation must include, as far as necessary to understand the evolution of the business, the company’s performance or position, non-financial information (including environmental matters) and an assessment of the risk exposure to climate change. This is mandatory for large companies – any undertaking that exceeds two of the following three thresholds:

• balance sheet total of EUR20,000;
• net turnover of EUR 40 million; and
• average number of employees during the period of 250 that are public interest entities, which, by the closing of the balance sheet, employ an average of more than 500 workers during the financial year.

See 6.5 ESG Requirements.

For details of the environmental information to be made available to economic and financial agents, see 9.1 Financial Institutions/Lenders.

Green finance in Portugal is broadly aligned with international market standards (LMA principles/guidelines and ICMA Principles), and oversight sits with the Portuguese Securities Market Commission (CMVM), the Bank of Portugal, and the Insurance and Pension Funds Supervisory Authority. In addition to this market-led alignment, the EU Green Bond Standard has applied since December 2024, with the CMVM designated as the competent authority in Portugal, including for supervising/registering external reviewers. The CMVM also issued a Sustainability Guide in 2024 to steer supervised entities in line with the EU framework.

Portugal also adopted Decree-Law No 4/2024 establishing a national framework for the VCM.

It is now very common to include an analysis of environmental matters within the scope of the due diligence exercises that precede M&A, finance and property transactions. Moreover, it is also usual to complement legal due diligence with technical due diligence.

Typically, the matters examined include whether the essential environmental permits are in place to conduct an activity or to utilise a property.

There is no express legal requirement that requires a seller to disclose environmental information to a purchaser. However, the principle of good faith in the pre-contractual phase imposes duties of information that bind the parties to provide all the clarifications necessary for the honest conclusion of the contract.

The most common environmental issues that usually arise within the context of a transaction are related to environmental licensing, contamination of soil and water lines and the absence of, or non-compliance with, EIAs.