Portugal is a high-performing country in this year’s CCPI, ranking 13th.
It scores medium in the Climate Policy and Renewable Energy categories and high in Energy Use and GHG Emissions.
According to the country’s national climate law, Portugal must achieve a 55% emissions reduction by 2030 compared with 2005 levels, translating to an annual reduction of at least 4%. In 2021, the reduction was 2.8%.
Portugal submitted a draft updated National Energy and Climate Plan (NECP) to the European Commission in June 2023. In the update, the overall emissions reduction target for 2030, previously −45 to −55%, was updated to −55% in accordance with the climate law. The long-term target is unchanged from the previous NECP regarding climate neutrality by 2050. This does not reflect the climate law’s objective of studying the anticipation of climate neutrality for 2045, although the draft mentions it. This will hopefully be incorporated into the final version.
Nonetheless, the CCPI national experts point out that the country would have to achieve neutrality by 2040 to align with the 1.5°C of the Paris Agreement. The new draft NECP also shows a significant increase in the installed capacity of renewables for electricity generation (including for hydrogen production) compared with the previous NECP. However, as that mainly owes to the increase in solar and wind to produce hydrogen for export, a highly inefficient process, this additional installed renewable energy capacity does not substantially translate into emission reductions.
Coal is completely removed from power mix
Portugal aims at an 80% renewables share in electricity generation by 2026 (currently, it’s about 60% in a normal year). However, decentralised solar in buildings, already installed or projected until 2030, is still low compared with centralised solar. The experts welcome that coal was completely removed from the power mix, so the target is achievable given the prevalence of hydro, wind, and increasingly solar in the mix.
The experts criticise the government’s plans to phase out fossil fuel subsidies only in 2030. They also point out that the government has decided to suspend the increase in the carbon tax on petroleum products as part of a package of measures to support families and mitigate the impact of rising living costs.
The suspension of the marketing and production of biofuels from palm oil is a commitment included in the national climate law enacted in February 2021, and in the 2021 state budget, but it still isn’t implemented. Biofuel imports have increased following a legislative change in the accounting system for palm oil waste. Information and transparency on biofuel imports is lacking, as the government does not disclose information on biofuels’ origins. The experts point out that pellet production in Portugal has received at least €100 million in public funding since 2008. The construction of three pellet plants and the reopening of another closed plant was expected to have increased production by 2022As pellet production leads to high consumption of pine wood, the CCPI experts advise scaling it down.
Automobiles remain the dominant mode of transport
Portugal needs to improve its efforts in the transport sector. Few cities have sustainable urban mobility plans (Lisbon, for example, doesn’t have one), and automobiles remain the dominant mode of urban and extra-urban transport. The use of trains and public transport generally remains extremely low, according to the experts. Road transport emissions have been increasing, counter to what needs to happen.
Regarding industry, according to the climate law, the green industrial strategy must be ready by February 2024, but there are no known moves to prepare it or put it out for public consultation. Another worrying sector is agriculture, which shows a growing trend in emissions, along with the increasing relative weight in national emissions.
The implementation of important points to advance energy efficiency at the national level still lags. The national long-term energy poverty strategy has not yet been adopted as of this report. The diversity of funding to support building renovation also deserves attention. Despite the two programs available, a large portion of the population cannot access them because they aren’t considered vulnerable. Those programs have undergone some positive changes, but that’s still not enough to move forward to the level of renovation needed, according to the CCPI experts.
The experts want to see more support for low-income households, a faster phase-out of fossil fuel subsidies, and improvements in the transport sector. Overall, Portugal has strong policies and targets in place, and while implementation could be improved, the country is doing comparatively well in Europe.