Environmental Law 2022 Comparisons

General Principles of Environmental Law

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 the gradual improvement of the quality of life of citizens.

Public Action Principles

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; and
• the polluter pays.

Public Policy Principles

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.

Environmental Laws

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

• the Constitution of the Portuguese Republic;
• Law 19/2014, the bases of environmental policy;
• Law 98/2021, the climate framework law;
• Law 50/2006, the framework law for environmental administrative offences;
• Decree Law 151-B/2013, the legal framework for environmental impact assessment;
• Decree Law 147/2008, the legal framework of responsibility for environmental damage;
• Decree Law 127/2013, the legal framework of industrial emissions applicable to integrated pollution prevention and control;
• Law 58/2005, the water law;
• Decree Law 102-D/2020, the general framework of waste management;
• Decree Law 39/2018, the legal framework of prevention and control of emissions of pollutants into the air;
• Decree Law 12/2020, the legal framework for greenhouse gas emission allowance trading;
• Decree Law 142/2008, on the conservation of nature and biodiversity;
• Decree Law140/99, the legal framework of 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; and
• Decree-Law 9/2007, the general noise regulation.

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

On one hand, there are the governmental bodies, which are governmental per se or directly depend on the government. This first category includes the Ministry of the Environment and Climate, the Secretariat of State of Environment and Energy, the Minister of Economy and Sea and the Commissions for Regional Coordination and Development, one for each region – North, Centre, Lisbon and Tejo Valley, Alentejo and Algarve (CCDR-N, CCDR-C, CCDR-LV, CCDR-Alentejo and CCDR-Algarve). Another important authority, although not regulatory in nature, is the Environmental Fund. This public fund is currently dependent on the Minister of the Environment and Climate and financially manages environmental policies in the areas of climate change, water and waste management, environmental damage, conservation of nature and environmental I&D.

On the other hand, there are other public bodies, arguably as important as the governmental ones, that are not directly dependent on the government. This second category includes the Portuguese Environmental Agency (APA), the Inspectorate General of Agriculture, Sea, Environment and Land Planning (IGAMAOT), the Portuguese Institute for the Conservation of Nature and Forests (ICNF) and the Portuguese Institute of the Sea and Atmosphere (IPMA).

Regulatory Authorities’ Investigative Powers

Some of the entities listed in 2.1 Key Regulatory Authorities have powers of control, inspection and monitoring of 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 preventive measure and with immediate effect, the precautionary measures that, in each case, are justified to prevent or eliminate the hazardous situation. These include:

• the suspension of the installation's operation;
• the closure of all or part of the installation; or
• the seizure of all or part of the equipment.

In particular, IGAMAOT has the right to free access to the operators' facilities, to request examinations, expert examinations, document collection and consultation.

The Inspector-General of IGAMAOT has generic authority over any administrative offence proceedings.

Environmental Permits

In general terms, an environmental permit is required whenever an activity may significantly affect components of the natural environment, such as the soil, the subsoil, water resources, the sea, the air, biodiversity and the landscape.

The main environmental licences/authorisations are:

• Environmental Impact Statement (DIA) and Declaration of Conformity of the Execution Project (DCAPE);
• Environmental Permit;
• Title for Use of Water Resources;
• Air-Pollutant Emissions Title;
• approval decisions under the Seveso legislation;
• Greenhouse Gas Emissions Permit;
• Waste Management Operator Licence;
• Landfill Operating Licence;
• Installation and Operation of Integrated Centres for Recovery, Valorisation and Disposal of Hazardous Waste Licence; and

•       Water Reuse Licence.

Environmental Licence Procedure

Environmental licences must be obtained prior to carrying out an activity that has environmental impacts.

Obtaining a licence implies the submission of an application on an electronic platform, SILiAmb, followed by the payment of a fee. The main environmental permits are incorporated in the Single Environmental Permit (TUA), which is an electronic title that contains all the information about the licensing and previous administrative control acts on environmental matters to which each operator is subject.

Challenging Rights

Under the Constitution of the Portuguese Republic and the law, any citizen – as well as associations and organisations defending the environment, regardless of whether they have a direct interest in the claim – may administratively and judicially appeal environmental licences. Local authorities also have the right to appeal such licences in relation to interests held by residents in their area of jurisdiction.

The granting of licences in environmental matters is also subject to public consultation, as a way of ensuring greater involvement of citizens in decision-making on environmental issues that concern them. To enable citizens to exercise the right to public consultation, the government has created a website, Participa, allowing the public to consult ongoing environmental licensing procedures that are legally subject to public consultation and related documents. Participa also allows people to submit opinions, which must be considered prior to the licensing decision.

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).

Historical Environmental Incidents

The extent of liability for non-compliance with environmental standards can be analysed from two different perspectives: (i) the subjects to whom the liability might be attributed, and (ii) 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, ie, 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 harmful activity of the environment is 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, without prejudice to the causes of interruption and suspension provided for in the law. So, in practice, this period might be extended by up to eight years.

Environmental liability (for environmental damage) and civil liability

In relation to the limitation period for environmental and civil liability, there is the problem of the latency period, since damage to the environment and to third-party rights/interests resulting from them may only manifest long after the fact(s) at their origin. As a result, the applicable legislation established that liability for damage caused by any emissions, events or incidents that happened more than 30 years ago is time-barred.

Moreover, this 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. In these cases, it will be necessary to resort to the traditional civil liability rules of the Portuguese Civil Code. Under these rules, non-contractual civil liability expires three years from the date the injured party became aware of their right, and contractual civil liability expires in 20 years.

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 after 15 years from 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 the environmental liability of the offender, or be considered an environmental crime.

Administrative offence liability

This type of liability is the most common way to punish behaviour that violates environmental legal provisions. It corresponds to a social and administrative censure whose reason to exist is the subsidiarity of criminal law and the need to sanction illegal behaviour that is subject to a lesser social disapproval. This is why the administrative offence liability framework, although it has many specific characteristics of its own, is, in a certain way, close to criminal law. In fact, most breaches of environmental law, as well as of the provisions established in the permits, trigger environmental administrative 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 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 the fines, interim decisions (including the preventive 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 intended to repair the damage caused to people and property.

Environmental liability for environmental damage

This type of responsibility arises from Directive 2004/35/EC of the European Parliament and of the Council (which was incorporated into the Portuguese law through Decree-Law 147/2008). It is designed to repair the damage caused to the environment itself, specifically, significant damage caused to protected species and natural habitats, water resources and soil. Causing environmental damage, or an imminent danger of such damage, while pursuing economic activities – regardless of their public or private nature, profitable or not – might lead to the liability of the perpetrator. Liability for environmental damage implies the obligation to implement preventive and repair measures, and to bear the associated costs.

Criminal environmental liability

The Portuguese Criminal Code includes four environmental crimes:

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

In the worst-case scenario, environmental crimes may lead to the application of a five-year custodial sentence. If death or offences involving physical injury result 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 minimum and maximum 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 others, the economic and financial situation of the convicted person and its 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 relation to the traditional civil liability rules to bear in mind. In these kinds of liabilities, the assessment of the evidence of the causal link is based on a criterion of likelihood and probability that the harmful act can cause 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. Moreover, 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 parties responsible, they are presumed to be liable in equal shares.

Civil liability

Civil liability is traditionally dependent on meeting five requirements, specifically:

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

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

There are some specifics about the causal connection rules to bear in mind. Under the general civil liability rules, proving the causal link between the fact and the damage depends on greater certainty, on adequate causality. However, in this kind of civil liability, the assessment of the evidence of the causal link is based on a criterion of likelihood and probability that the harmful act can cause the damage in question.

Additionally, concerning fault, it should be noted that, for some economic activities, this type of responsibility applies regardless of the existence of guilt or intent. Moreover, if several persons are liable, all are jointly and severally liable for the damages, 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 as listed above in "Civil liability".

An important issue is that the operator may not be obliged to pay the costs of preventive or restorative measures. For instance, if it can demonstrate that there was no intention or negligence on its part and that the environmental damage was caused as a result of an event expressly permitted by the issued licences or that it was damage that, at the time, given the scientific knowledge available, was not likely to occur.

Administrative offence liability

Administrative offence liability is based on the same five requirements as for civil liability. However, in this case, it is always necessary to establish the guilt of the perpetrator. The failure to meet any one of those requirements is sufficient for there to be no liability.

As in criminal law, it is important to underline that only the fact described and declared to be subject to a fine by a law prior to the time it was committed is punishable as an administrative offence. Moreover, if the law in force at the time the act was committed is subsequently changed, the law that is more favourable to the defendant will apply.

The fine may be specially reduced when there are circumstances prior, subsequent to, or contemporaneous with, the commission of the administrative offence which markedly reduce the unlawfulness of the act, the culpability of the perpetrator, or the need for the fine. In these cases, the minimum and maximum limits of the fine are reduced by half.

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

Corporate Liability

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.

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 paragraph, 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.

This 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

In their corporate governance, companies are obliged to consider climate change in decision-making processes and to incorporate a climate risk analysis. Moreover, for each annual financial year, companies must assess the exposure to climate change of the carbon impact of their activity and operation, and they must integrate this assessment into their management reports.

Administrative Offence Liability

Given the legal provisions of the framework law for environmental administrative offences, it is not clear that this type of liability cannot 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 fraud against the law.

Environmental Administrative Offences

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

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

If there are several individual persons 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 its managers, directors, or persons with leading functions.

Environmental Crimes

Without prejudice to the right of recourse, persons occupying a leadership position are liable on a subsidiary basis for the payment of fines and compensation for which the legal person or equivalent entity is convicted, in relation to crimes:

• committed during the period they held those positions, without their express opposition;
• committed previously, when it was their fault that the assets of the legal person or equivalent entity became insufficient to pay the fine in question; or
• committed previously, when the final decision to apply them has been notified during the period they held their position and the failure to pay is imputable to them.

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

Directors’ and officers’ liability insurance may include administrative, civil and environmental liability, even if this is achieved by negotiating tailor-made insurance with the insurer. Typically, such insurance covers civil liability and administrative liability. Environmental liability can be included in the insurance if agreed with the insurance company.

Climate risk in corporate governance

Under the climate framework law the duties of care, loyalty and reporting of managers or directors and members of corporate bodies with supervisory functions include prudent consideration and transparent information sharing about the risk that climate change poses to the business model, capital structure and assets of companies.

As referred to in 5.1 Liability for Historical Environmental Incidents or Damage, 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 the operator commits.

The legal framework on liability for environmental damage determines that some operators (depending on the activity they carry out) are obliged to set up one or more financial guarantees of their own that are autonomous, and alternative or complementary to each other, that enable them to assume the environmental liability inherent to their activity.

Financial guarantees can be constituted by taking out insurance policies, obtaining bank guarantees, participating in environmental funds, or constituting own funds reserved for this purpose. If the financial guarantee is constituted through bank guarantees, the financial institution will be liable under the terms established in the guarantee.

Furthermore, financial institutions and lenders should also consider the provisions set out in the new climate framework 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.

Besides establishing those principles, the climate framework law also determines that public and private agents and institutions must take climate risk and climate impact into account in their financing decisions. Moreover, their risk analysis in financial intermediation must also consider these factors. The failure to take climate risk and climate impact into account is considered a violation of fiduciary duties.

The liability of the financial institutions can only be safeguarded contractually. Specifically in the case mentioned of the constitution of a mandatory financial guarantee (see 8.1 Financial Institutions/Lender Liability), the limits of the financial institution's liability will be stated in the terms of the bank guarantee.

Civil claims relating to environmental damage are recoverable provided private interests are damaged as a consequence of it.

The condition that the damage is caused by that action (causal link) is set out in greater detail in the applicable criteria when referring to damage to environmental compounds, especially air (diffuse emissions).

Environmental components (soil, water, air, species/habitats) 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. This is to say that the act committed by the agent is unlawful and, as such, gives rise to 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 (for instance, replacing injured specimens with new ones) or by paying the corresponding amount of money whenever the former is not feasible, for instance, if the injured specimen is the last of its species or when part or all of damages claimed are non-material.

Financial compensation often poses difficulties in measuring damage, for instance, measuring the damage arising from poor air quality caused by the activity of a nearby industrial facility.

The real damage caused functions as a limit on the eligible compensation but sometimes, especially when the unlawful act is not intentional, the judge is granted powers to reduce the compensation equitably in the event of negligence. To do this, the judge considers the degree of culpability of the perpetrator, the economic situations of the perpetrator and of the injured party, and other circumstances of the case. This principle of equitability may also apply in cases where there are several perpetrators: compensation is allocated according to the degree of culpability of each one and not merely pro rata.

If not contractually grounded, civil claims are subject to a limitation period of three years.

In Portuguese tort law, 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 an administrative offence. Of course, these penalties revert to the state and not to the injured party, which is only entitled to the above-mentioned equivalent to the damage.

Popular Actions

The Constitution of the Portuguese Republic recognises the fundamental right to bring a popular action, integrating it in the scope of the rights, liberties and guarantees of political participation. The Constitution expressly lists the preservation of 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 justice system to protect legal situations that are insusceptible of individual appropriation, as is often the case with environment-related matters. This protection can be exercised both in the judicial courts and through the administrative procedure themselves.

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 access to environmental information.

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 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, when they so request.

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 licensing was valid and if 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 in Portugal, dated 11 September 2012, in which the Lisbon Court of Appeal (Case No 2209/08.0TBTVD.L1-1) 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, sleep and tranquillity of the residents, and the economic right of the wind farm, whose wind turbines emit noise and/or shadow, 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 taking each specific case into account. Therefore, the residents are required to definitively demonstrate that the location in question is their home and that they are truly affected by the noise in question.

Concerning the right to civil compensation, Law 90/88 of 13 August 1988 specifies that the state is liable for compensating all citizens who are directly harmed by actions of Iberian wolves (Canis lupus signatus Cabrera). In this context, the Central North Administrative Court decided, on 22 February 2013 (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. This complementary legislation was repealed in the meantime by Decree Law 54/2016, which now provides much more detailed rules on compensation for damage to animals.

Furthermore, a recent decision from the Central North Administrative Court of 13 March 2020 (Case No 00036/06.8BEPNF) established that the operation of a waste water treatment plant under normal conditions that is licensed for this purpose cannot be grounds to award compensation to people living nearby. The Court stressed that 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 minor inconveniences (which are not even worthy of legal protection) that were eventually suffered by those people. As such, it does not trigger the right to compensation. From another perspective, in order to protect a bat colony, the Central South Administrative Court decided, in a protective order (Case No 06793/10), on 31 March 2011, that a windmill in a wind farm could only be constructed and installed at certain times of the day and in 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 institutes.

It is possible to use indemnities or other contractual agreements to transfer liability – for example, from a given date onward – to another party. These transfers of responsibility are subject to the general principles of law, such as good faith and proportionality.

These types of contracts do not have any binding effect on the competent 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. In other words, the regulator will always hold the perpetrator of the damage liable, regardless of what is contractually stipulated.

The contracts might, however, have an influence on the regulators, especially in a scenario where there is continuation of the damaging activity 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.

Environmental insurance is available in the Portuguese legal system. In fact, in some cases, for operators carrying out certain 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 in an environmental component and from the activity of the insured.

There are no specific laws concerning contaminated land. A draft law was under discussion in 2015, but no official publication has yet occurred.

Nevertheless, the prevention of emissions into the soil is covered by environmental procedures, such as environmental licensing (Decree Law 127/2013) and the environmental impact assessment (Decree Law 151-B/2013). Moreover, Decree Law 147/2008, determines that environmental damage, which includes damage to the soil, must be communicated to the appropriate authorities within 24 hours. For further details concerning self-reporting obligations, please see 15. Environmental Disclosure and Information.

Under Decree Law 102-D/2020, every operation for the remediation of the soil, not included in the legislation on environmental damage, requires a specific licence.

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 were carried on, or where there are signs of contamination, a technical quality assessment be carried out.

Moreover, the APA issued supporting documents about the technical requirements to use in contamination assessments and remediation operations, for instance, addressing the reference values for the soil.

The development of the key policies to combat climate change is 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 emissions;
• a strengthening of the capacity for carbon dioxide (CO₂) sequestration; and
• adaptation to expected climate change impacts.

There are important planning instruments to achieve these goals, as follows:

• 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 the emissions of greenhouse gases and their removal;
• the National Energy and Climate Plan 2030 (approved by Council of Ministers Resolution No 53/2020), which arose in the context of the Regulation of the Union’s Governance for Energy and Climate Action (Regulation (EU) No 2018/1999), establishes policies for decarbonisation of the economy, energy efficiency and energy transition, as well as goals for sectors to reduce greenhouse gas emissions;
• the Roadmap for Carbon Neutrality 2050 (published by Council of Ministers Resolution No 107/2019), which aims to reach carbon neutrality by 2050 – ie, a neutral balance between the emissions of greenhouse gases and carbon sequestration;
• the National Strategy to Adapt to Climate Change (approved by Council of Ministers Resolution 56/2015, and extended until 31 December 2025 by the Council of Ministers Resolution 53/2020), which seeks to adopt solutions to adapt various sectors to the effects of climate changes (eg, agriculture, forestry, transport);
• the Action Programme to Adapt to Climate Change (approved by Council of Ministers Resolution 130/2019), created for the specific implementation of the adaptation measures set out in the National Strategy to Adapt to Climate Change; and
• the National Roadmap for Adaptation 2100, which is still under development, will carry out an evaluation of Portugal’s vulnerability to climate change and will define the guidelines in order to plan the territorial adaptation and adaptation of the different sectors to climate change.

Furthermore, there is legislation that addresses the emission of greenhouse gases and seeks to achieve the established goals, namely:

• Decree Law 12/2020, which establishes the framework for the trading of licences for the emission of greenhouse gases, along with Decree Law 93/2010 which provides such a framework for the scheme;
• Decree Law 145/2017 incorporates into Portuguese law Regulation (EU) 517/2014, and aims to reduce the emission of greenhouse gases, for example, by regulating the use of equipment containing such gases.

The new climate framework law sets forth an ambitious approach to climate change. Several instruments are provided for 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 governmental laws;
• identification and quantification of avoided greenhouse gas 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;
• ban on prospection or exploitation of oil;
• ban on using coal for electricity generation from 2021 onwards; and
• ban on using fossil natural gas for electricity generation from 2040 onwards, effective only if energy safety is considered safeguarded.

The European Climate Law (Regulation (EU) 2021/1119) provides that climate neutrality should be reached by 2050. To achieve this, a goal is set to reduce greenhouse gas emissions at EU level of at least 55% (compared to the 1990 levels) by 2030. This law followed the Green Deal, approved in December 2019, and is an increase from previous targets, which were to reduce greenhouse gas emissions by at least 40% by 2030.

In line with this goal, “Fit for 55”, a package of proposals was recently published through a Communication from the Commission, dated 14 July 2021. It proposes a comprehensive set of measures to ensure that greenhouse gas emissions are reduced to at least 55% by 2030 (compared to 1990 levels). The proposed amendment to the Effort Sharing Regulation (Regulation (EU) 2018/842) provides that between 2023 and 2030, Portugal must reduce its greenhouse gas emissions by 28.7% (compared to 2005 levels). This represents an increase of more than 10% in relation to the current goal of a 17% reduction.

These proposals are to be inserted into legal texts, which may affect the Portuguese legislation. Other legislation is expected to be published in the meantime that will lead to changes to these goals.

In Portugal, the National Energy and Climate Plan 2021-2030 – which was approved before the new European Climate Law was enacted – establishes that the reduction of greenhouse gas emissions should be between 45% and 55% (compared to 2005). It also defined the following goals by sector for the reduction of greenhouse gas emissions, in comparison with 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.

The Roadmap for Carbon Neutrality 2050 determines that carbon neutrality can only be reached by 2050 if greenhouse gas emissions are reduced between 85% and 90% (compared to 2005 levels), along with the creation of carbon sinks.

Decree Law 266/2007 determines that employers must resort to all available means to ensure the exposure of workers in the workplace to dust from asbestos or materials containing asbestos is reduced to a minimum and, in any case, is not above the exposure limit value (0.1 fibre per cubic centimetre, based on 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 – are subject to specific rules (Ministerial Order 40/2014) and may only be performed by duly licensed waste-management operators.

Decree Law 102-D/2020, which entered into force on 1 July 2021, is one of the key laws governing waste in Portugal and sets out the general rules on waste management. This Decree Law enacts the new general framework on waste management (RGGR), the new legislation on landfills. It also amends Decree Law 152-D/2017 (commonly known as Unilex) on management of certain specific waste: packaging waste, used oil, used tyres, electric and electronic equipment waste, batteries and accumulators waste, and end-of-life vehicles. Currently, Decree Law 102-D/2020 and Decree Law 152-D/2017 are the cornerstones of waste law in Portugal.

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 most important are the following.

• Responsibility of the waste producer/waste holder. Regarding specific waste flows under Decree Law 152-D/2017, the principle in force determines the extended producer responsibility (EPR) and provides that the placer of products on the market is the person responsible for the corresponding waste, ie, product’s producer, the packager and the supplier of service packages must resort to an individual or integrated scheme in order to ensure proper management of the lifecycle of their product.
• Waste management hierarchy, setting a priority order in waste prevention and waste management options: prevention, preparing for re-use, recycling, waste-to-energy recovery and other forms of recovery and, as a last resort, disposal.
• Planning of waste prevention and waste management, notably providing for certain targets.
• 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, Decree Law 102-D/2020 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.

When a party responsible for waste management delivers it to a third party, such as a licensed waste management operator or any other operator authorised to do so (eg, an entity responsible for the EPR schemes or urban waste management systems), liability for waste management ceases and it is transferred to those operators. To properly transfer their responsibility, the person responsible must be sure that the chosen operator’s scope of licensing covers the waste that is being delivered for management.

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, 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 tables (Mapa Integrado de Registo de Resíduos) to inform APA on the types and quantities of produced waste and to whom it was delivered for transportation and treatment.

Ecodesign, take-back schemes and recovery obligations are prominent in specific waste flow regulation (listed in 14.1 Key Laws and Regulatory Controls).

Nevertheless, 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 on substances of high concern. In addition, provided specific regulations are enacted, products are not to be placed on the market unless some quotas of recovered material are incorporated in them. For specific waste flows, producers must also provide end-users with information on waste prevention measures, their contribution to reuse and preparation for reuse, existing take-back and collection schemes, and the prohibition on littering.

The Portuguese general rules on specific waste flows are based on two main features and they bring into effect the EPR principle set out in European Law. Producers placing products on the market subject to these flows (eg, packaging) must sign up to a scheme created for the management of the waste in question, by which the producers’ responsibility/liability is transferred to the manager of the scheme. This signing up triggers an obligation to pay a regulatory fee (known as ecovalor or prestação financeira) intended to cover all costs of waste management vis-à-vis the products placed on the market and declared to the manager of the scheme. Instead, these producers can implement an individual scheme by carrying out the waste management operations themselves, subject to the prior approval of the APA. Although provided for in Portuguese law, individual schemes are rather rare.

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.

Portuguese law intertwines production and recovery in line with principles of 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 to ease its dismantling and the recovery of its waste, components and materials. The producers of this equipment must also do so bearing in mind the goals of resources efficiency, the reduction of dangerous chemicals products and the durability of the products. The producers of batteries and accumulators must also, among other requirements, design to progressively contain less dangerous substances (by replacing, for instance, heavy metals such as mercury, cadmium and lead).

Finally, disposal may occur in the forms 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 (such as hazardousness).

Decree Law 147/2008 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 preventive measures taken, and of the success of these measures in preventing damage. If the environmental damage actually occurs, the operator must inform the competent authority of all 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 the damage that has occurred. All prevention and remediation costs are paid by the operator.

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, the competent public bodies and entities must ensure that, in the event of an imminent threat to human health or the environment, caused by human action or natural phenomena, all environmental information is released immediately to enable the populations at risk to take measures to prevent or reduce the damage arising from this threat. Besides that, no general warnings to the public are required, unless it is considered a necessary prevention measure.

The public can obtain environmental information from public authorities and bodies. Law 26/2016 provides that all people have the right to access administrative documents (including environmental documents) 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. With regard to environmental information, 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.

Note, however, that there are cases in which the request for access to environmental information may be subject to additional requirements, and it may be denied, or reduced to the information that can be made available. Examples are internal communications between entities and cases where the request may have adverse consequences in terms of confidentiality issues, copyright, environmental protection, etc.

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, which belongs to the indirect administration of the bodies or entities referred to above and which have duties or roles, or perform public administrative functions or provide public services relating to the environment. This includes public corporate entities, owned or part-owned companies (empresas participadas) and concessionary companies. It also includes any natural or legal person that holds or materially maintains environmental information on behalf or on the 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 environmental issues (and participate) during the public consultation periods – please refer to 3.2 Environmental Permits.

Environmental Information from Companies

If companies are subject to environmental rules, they may be obliged to disclose environmental information in three different ways, as follows.

• To the general public, by making information available on their websites or in their premises. For instance, the legislation on the prevention of major accidents (Decree Law 150/2015) obliges operators to do this.
• To public bodies, which will analyse it and provide conclusions to the company only. In this regard, Decree Law 39/2018 requires that operators causing air emissions have to monitor them (usually twice a year) and, subsequently, send the corresponding results to the APA or the CCDR for them to ascertain whether operators are in compliance with the limits for air emissions (and other legal requirements). Similar obligations to report the results of self-monitoring are established in the water law and in Decree Law 226-A/2007 (the water resources use regime).
• To public entities that are obliged to, subsequently, make the information available to the general public. For example, following the requests to obtain an environmental licence (Decree Law 127/2013) or the ones within the environmental impact assessment procedure (Decree Law 151-B/2013), the competent entity must disclose this information via its website.

In terms of annual reports, if companies engage in activities under Decree Law 127/2013, they are required to send an annual environmental report to the APA, which must first be confirmed by a certified entity, to demonstrate compliance with all 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. For large companies, which, by the closing of the balance sheet, employ an average number exceeding 500 workers during the financial year, this is mandatory (Decree Law 262/86).

For details of environmental information to be made available by economic and financial agents, please see 8.1. Financial Institutions/Lender Liability.

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

Some of the environmental issues analysed during a due diligence are:

• environmental impact assessment;
• environmental licence;
• environmental liability;
• waste management;
• specific waste flows;
• contamination of soils and water lines;
• emissions of air pollutants;
• equipment containing ozone-depleting substances and greenhouse gases;
• water supply;
• wastewater.

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

The aim of green taxation is to penalise pollution and damage to the environment, reduce energy dependence from abroad, and encourage more sustainable production and consumption patterns. In doing so, green taxation reinforces 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, 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 (IRC).

Below are some examples of green tax mechanisms currently in force in Portugal.

Deterrence Taxes

• Waste Management Fee (TGR), which aims to encourage the reduction of waste production, stimulate compliance with national waste management targets and improve the performance of the sector. Water Resources Management Fee (TRH), which aims to compensate the environmental cost inherent in activities likely to have a significant impact on water resources.
• Carbon Tax (TCO2), which is levied on sectors not included in the European Emissions Trading Scheme. This tax is indexed to the price of carbon in the ETS sector.
• Road Vehicle Tax (IUC) and Excise Duty (IEC), which seek to burden the taxpayers in proportion to the environmental cost they cause.
• Tax on light plastic bags.
• Tax on less energy-efficient light bulbs.

Tax Benefits (especially, Exemptions)

• Corporate Income Tax exemption for entities managing integrated systems for to manage specific waste flows, during the entire licensing period for the results which, during this period, are reinvested or used for the purposes legally attributed to them.
• Exemption of Property Transfer Tax and Stamp Duty on acquisitions for value of properties that fall within forest intervention areas.
• Vehicle Purchase Tax 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.

Environmental Components in Classic Taxation

• Influence of parameters such as energy efficiency and location in areas of urban regeneration in the calculation of Municipal Property Tax.
• 50% reduction in the Municipal Property Tax rate when the property is exclusively used in the production of energy from renewable sources.
• Influence of the particle emission levels in the calculation of the Road Vehicle Tax.
• Deductible expenses in higher proportion to their nominal value, such as expenses of car-sharing and bike-sharing systems, with the acquisition of fleets of bicycles, with electricity and vehicular natural gas for vehicle supply, etc.
• The Road Vehicle Tax rates increase on oil and diesel vehicles, according to CO2 emissions.