PORTUGAL Law and Practice Contributed by: Manuel Protásio and Catarina Coimbra, VdA
mate Framework Law, approved by Law No 98/2021 of December 31st. This framework aims for climate neutrality by 2050, potentially advancing to 2045, and introduces the right to a balanced climate, which could lead to climate litigation. Key initiatives under this law include the IRS Verde tax deduction for sustainable goods and services, the Cli - mate Action Portal for citizen engagement and trans - parency, and the establishment of a carbon budget. Additionally, a new Council for Climate Action will independently analyse and discuss climate policies. Portugal also created a voluntary carbon credits mar - ket that includes projects for both carbon sequestra - tion and emissions reduction, exceeding a similar EU proposal. Furthermore, there is increasing interest in carbon sequestration projects, particularly those involving marine ecosystems, capitalising on Portugal’s geo - graphic advantages. These initiatives reflect Portugal’s comprehensive and proactive approach to sustainable development, encompassing legislative action, market mechanisms, fiscal incentives and corporate governance reforms. 3.4 Energy-Transition Minerals As an EU member state, Portugal adheres to EU leg - islation and participates in initiatives that promote the responsible exploration, development and use of criti - cal raw materials. The EU’s Critical Raw Materials Act (CRMA) aims to ensure a secure and sustainable supply of energy- transition minerals. This legislation outlines measures to enhance the sourcing, recycling and production of critical raw materials within the EU, to reduce depend - ency on external suppliers and to encourage sustain - able mining practices. As an EU Regulation, the CRMA has general applica - tion, is binding in its entirety, and is directly applicable to its member states, including Portugal – meaning that its provisions and targets, such as increased
extraction, processing and recycling of strategic raw materials by 2030, must be observed nationally. Lithium is classified as a strategic raw material under the CRMA, reflecting its importance for batteries, electric vehicles and renewables. The CRMA outlines benchmarks to strengthen domestic supply chains and lessen EU dependence on external sources. Strategic projects, such as Portugal’s Barroso lithium mine, benefit from faster and more predictable permit - ting processes as well as better access to funding and support at the European level. In addition to opportunities, the CRMA also introduces new obligations. Companies involved in extraction and refining must meet stringent environmental and social criteria, manage supply chain risks, and pro - mote circularity and sustainable practices, including recycling. To implement CRMA requirements at national level, Portugal has established dedicated working groups and is adapting its legislative framework to facilitate mining projects in line with EU priorities. Ultimately, by complying with the CRMA, Portugal positions itself to take advantage of growing European demand for energy-transition minerals. 4. Taxation of Mining and Exploration 4.1 Mining and Exploration Duties, Royalties and Taxes Taxes Companies carrying out exploration and mining activi - ties in Portugal will be subject to the general provi - sions provided in the Corporate Income Tax Code. However, pursuant to the Company Tax Code, the provisions made retained against the costs in con - nection with the environmental damage of the mining site are tax-deductible. Royalties Financial contributions are required for prior assess - ment, prospecting, research and experimental explo - ration activities. These contributions will be annual,
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