PORTUGAL Trends and Developments Contributed by: Assunção Cristas, Catarina Pinto Correia and Carolina Vaza, VdA
VdA Rua Dom Luís I, 28 1200-151 Lisboa Portugal
Tel: +351 21 311 3400 Fax: +351 21 311 3406 Email: acr@vda.pt Web: www.vda.pt
The European and Portuguese Regulatory Landscape: Regulation of the Voluntary Carbon Market The European regulatory landscape is undergoing significant transformation, marked by a series of ambitious initiatives aimed at bolstering economic resilience, fostering sustainable growth and enhanc - ing the competitiveness of the single market. Among the most notable recent developments are the Draghi report, the Omnibus I package and the Clean Indus - trial Act, each of which signals a renewed commitment by EU institutions to address both longstanding and emerging challenges. These measures collectively reflect a strategic pivot towards greater integration, innovation and sustainability, setting the stage for a new era in European policymaking. The Draghi report, commissioned to assess the future of European competitiveness, has provided a com - prehensive blueprint for revitalising the continent’s economic model. Its recommendations emphasise the need for deeper capital markets, increased invest - ment in digital and green technologies, and a more agile regulatory framework. In parallel, the Omnibus I package not only provides more time for adaptation to ESG obligations, but also proposes reviewed criteria for the targeted entities and lightens the obligations. Meanwhile, the Clean Industrial Act underscores the EU’s determination to lead the global transition to net zero, proposing robust support for clean technolo - gies and the decarbonisation of key industrial sec - tors. Together, these initiatives are shaping a dynamic regulatory environment, with far-reaching implications for businesses and investors across Europe.
The Draghi report, Omnibus I package and Clean Industrial Act collectively illustrate a strategic pivot in European policy-making by signalling a shift towards a more integrated, forward-looking and sustainabili - ty-driven approach. This new direction is character - ised by a recognition that the challenges facing the European Union – from economic competitiveness to climate change – require co-ordinated, compre - hensive responses rather than “piecemeal” reforms. Taken together, these initiatives represent a holistic strategy that seeks to align economic, financial and environmental objectives, marking a clear departure from previous, more siloed approaches. This integrat - ed policy-making framework is designed to position Europe as a global leader in both competitiveness and sustainability, setting a new benchmark for regulatory ambition and coherence. As part of the EU, all these changes are applicable in Portugal, and the recently published versions of the directives must be transposed in due time. While there is a certain sense of providing more time to implement the ESG agenda, the challenges of climate change, biodiversity loss and circular economy remain. The strict targets set out in the European Climate Law to achieve climate neutrality by 2050 are currently not under revision, but the pathway to achieving them is undergoing changes and expected to continue to do so. One such change may be a recalibrated balance between cutting emissions and offsetting. The Euro - pean Regulation for certification of carbon removals, although very strict, opens the door to that path, and is expected to provide ground for a credible voluntary carbon market.
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