PORTUGAL Law and Practice Contributed by: Assunção Cristas, Catarina Pinto Correia and Carolina Vaza, VdA
oversight and transparency. Certification is granted for a period of five years, after which it must be renewed with the Commission to maintain its validity. This pro - cess ensures that only those frameworks consistently meeting the required criteria retain their certified sta - tus. The regulation’s structured approach to certifica - tion, which flows from the Commission down to each individual carbon credit, is designed to safeguard the quality and integrity of these climate change instru - ments within the European Union. This chain of certi - fication aims to instil confidence in the environmental effectiveness of carbon credits and the markets in which they are traded. 3.2 Carbon Pricing and Trade Impacts The EU Regulation establishing a Carbon Border Adjustment Mechanism (CBAM) entered into force on 17 May 2023. As a member state of the EU, Por - tugal will be impacted by the obligations arising from this mechanism. Bearing in mind that the main objec - tive of the EU CBAM is to avoid carbon leakage and inspire partner countries to establish carbon pricing policies to fight climate change, the import of relevant goods – so far, cement, iron and steel, aluminium, fer - tiliser, hydrogen and electricity – into Portugal will be dependent on the issuance of CBAM certificates. Only authorised CBAM declarants will be able to import the relevant goods to EU territory, which means import - ers that operate in Portugal will also have to become authorised CBAM declarants. CBAM declarants will need to: • buy CBAM certificates at the beginning of each year; • report, until 31 May of each year, on the quantity of relevant goods imported into the EU in the pre - ceding year, on the number of CBAM certificates purchased, and on its correspondence with the amount of greenhouse gas emissions embedded in the products; and • submit proof that CBAM certificates were bought for the calendar year in question until 31 May. Starting on 1 October 2023, importers of relevant goods are obliged to provide information concern - ing embedded emissions. Authorisations to become CBAM declarants will need to be requested from 1 January 2024 onwards and, starting on 1 January
2026, CBAM declarants will be obliged to declare the goods imported, their embedded greenhouse gas emissions, and the quantity of corresponding CBAM certificates bought. Recently, in September 2025, the European Council adopted a regulation that simpli - fied and strengthened the EU’s CBAM, as part of the Omnibus I legislative package. The regulation aimed to simplify the CBAM and make compliance more cost-effective. The main objective was to reduce the regulatory and administrative burden, as well as com - pliance costs for EU businesses, particularly SMEs. The climate ambition underlying the CBAM remains unchanged, as around 99% of the emissions embed - ded in imported goods will continue to fall within the scope of the CBAM. Replacing the current threshold that exempts goods of negligible value from the scope of the CBAM, the amendments establish a new de minimis threshold based on mass, under which imports of up to 50 tonnes per importer per year will not be subject to the CBAM rules. The measure is expected to exempt from the CBAM primarily SMEs and individuals who import small or negligible quantities of goods covered by the CBAM regulation. 4. Liability for Climate Change and ESG Reporting 4.1 Liability for Climate Change and ESG Reporting As part of the EU, all the EU legislation on report - ing and information obligations, namely to investors, is fully applicable in Portugal. A growing number of investors are creating specific funds under the most stringent EU regulations to address climate issues, combining the SFDR and the European Taxonomy. It should be noted that the Corporate Sustainability Reporting Directive (CSRD) sets mandatory reporting obligations for in-scope companies concerning ESG sustainability matters, whilst the TCFD only provides for voluntary disclosure of information concerning climate-related risks and opportunities. The Corpo - rate Sustainability Due Diligence Directive (CSDDD), published in 2024, but amended by Omnibus I legis - lative package, has a broader scope than the TCFD, which goes far beyond the disclosure of related risks
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