Strategic Pathways for Portugal's Industrial Decarbonisation and Energy Transition

Portugal has established a forward-looking energy transition framework underpinned by its Roadmap for Carbon Neutrality 2050 the Basic Climate Law and the National Energy and Climate Plan NECP 2030. The country aims to reduce greenhouse gas emissions by 55 percent by 2030 compared to 2005 levels and achieve climate neutrality by 2045. Notable progress includes a 43 percent reduction in emissions by 2024 largely driven by decarbonising electricity supply. However the transition now requires a focus on end-use sectors such as transport industry and buildings where emissions remain high

To enhance this effort Portugal needs to develop a coherent national roadmap that integrates sectoral strategies regulatory reforms and investment plans. This roadmap should be built on bottom-up agreements with industry municipalities and labour groups to reflect real-world implementation barriers technology readiness and economic viability. Such an approach facilitates coordinated action increases transparency and ensures practical alignment of policies infrastructure development and workforce skills

Supporting a just and inclusive energy transition is crucial. Portugal is actively working through the Just Transition Fund and the Social Plan for Climate Action to empower vulnerable households and workers affected by phase-outs of fossil fuel industries. Tackling energy poverty by improving access to building renovations clean heating and affordable electric mobility is vital to maintaining social cohesion and broad acceptance of climate policies

Simultaneously addressing the needs of regions dependent on fossil fuel supply chains involves targeted retraining and workforce redeployment programmes. Lessons from past industrial transitions emphasise early planning and regional support to smoothly manage structural shifts ensuring workers can transition to emerging clean energy sectors

Electrification of the economy is central to Portugals decarbonisation strategy. Price signals must reflect supply costs to motivate consumers while ensuring affordability through targeted support. Current electricity tariffs incorporate various levies and subsidies that distort the true cost. Shifting essential policy costs to the state and introducing more dynamic time-of-use tariffs would better support the rollout of renewables batteries and demand response solutions

Electric vehicles represent another key focus area. Despite a significant increase in EV adoption road transport remains the largest emissions source. Policies promoting used EVs supported by expanding urban charging infrastructure and modal shift initiatives are essential. Prioritising low-income households for used EV subsidies and increasing charging availability in urban areas will promote equitable access to cleaner mobility options

Accelerating industrial decarbonisation involves defining targeted pathways for different subsectors. Portugals forthcoming Green Industrial Strategy will outline emission reduction targets focusing on electrification energy efficiency and innovation. Supporting sectors such as manufacturing and SMEs with tailored policies and workforce development programmes will boost competitiveness and align industry with climate commitments

Building retrofit programmes remain vital despite relatively low current emissions. Portugal must expand comprehensive support through one-stop shops white certificate schemes and targeted support for low-income households. Integrating these measures fosters social inclusion enhances energy efficiency and promotes deep renovations that deliver long-term benefits in comfort affordability and emission reductions