PORTUGAL Trends and Developments Contributed by: Assunção Cristas, Catarina Pinto Correia, Carolina Vaza and Mariana Vicenia, VdA
early-bird fee is designed to catalyse market partici- pation and methodology development across sectors. Complementing this framework, Decree-Law 122/2024 of 31st December established the Agên- cia para o Clima, IP (Climate Agency), consolidating national climate governance and reallocating to the new agency the climate-related competences previ- ously held by the Portuguese Environment Agency. Among its legally defined roles are: • the development and implementation of climate policies; • the role as national authority for the EU Emissions Trading System and related registries; • the supervision and promotion of carbon markets, including the VCM; and • the co-ordination and management of climate- related funds (including, inter alia, the Environmen- tal Fund, the Social Climate Fund, the Modernisa- tion Fund and the Blue Fund). The government subsequently appointed the agen- cy’s board by Resolution of the Council of Ministers 25/2025 of 14th February, enabling operational lead- ership across these functions. The regulatory “missing piece” remains the ordinance on capital requirements and minimum insurance con- ditions to cover reversals of sequestered emissions from natural risks such as wildfires, storms, floods, pests and disease. The EU’s New Architecture for High-Integrity Carbon and Nature Finance In late 2024, the EU adopted the Regulation estab- lishing a Union certification framework for permanent carbon removals, carbon farming and carbon storage in products. This Carbon Removals and Carbon Farm- ing (CRCF) framework is voluntary and anchored in robust monitoring, reporting and verification. It adopts a two-step model – certification first, then issuance of certified units – under strict criteria on quantifica- tion, additionality, long-term storage and sustainabil- ity. Crucially, the CRCF framework requires carbon farming activities to generate co-benefits for biodi- versity and ecosystem services; secondary legisla- tion is expected to operationalise methodologies and
integrity safeguards, including third-party verification and science-based tools to assess permanence and reversal risk. This “co-benefits by design” approach foreshadows the EU’s broader turn towards integrating biodiver- sity and ecosystem outcomes into climate finance mechanisms. On 7 July 2025, the European Commis- sion published its Roadmap towards Nature Credits. The Roadmap sets out a stepwise plan to develop high-integrity nature credits – certified, tradable units representing verifiable nature-positive outcomes, quantified using recognised biodiversity metrics or ecosystem indicators. The Commission’s approach emphasises: • certification first, credits later, with integrity safe- guards to avoid greenwashing and double count- ing, and clear separation of roles among develop- ers, certifiers and registries; • methodological pluralism within a coherent frame- work, acknowledging the heterogeneity and location-specificity of ecosystems and outcomes; • bottom-up development through an EU expert group, pilots and international co-operation, along- side seed finance and de-risking tools to address early-stage transaction costs; and • policy coherence with existing instruments, includ- ing potential uses in supporting national targets under the Nature Restoration Regulation (Regula- tion (EU) 2024/1991) and alignment with disclosure and sustainable finance frameworks. The Roadmap is explicitly not a nature-offsetting regime. It proposes a certification and crediting architecture to reward nature-positive actions that go beyond legal obligations and the mitigation hierarchy, while leaving open longer-term questions about mar- ket design, governance and demand drivers. A Reframed EU 2040 Climate Trajectory: Flexibility, Sectoral Interlinkages and Market Signals In early 2024, the European Commission proposed amending the European Climate Law to include a binding EU target of a 90% net reduction in green- house gas emissions by 2040 (relative to 1990). In its supporting analysis and communications, the Com-
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