Meet the Law - Law no. 98/2021, of December 31th

It was recently published on Portuguese Official Gazette, the Law no. 98/2021, of December 31, that approves the Climate Basis Law.

The main highlights regarding the bases of climate policy are the following:

General Principles

The present law recognises the climate emergency situation.

Climate rights and duties

The Government has created a public, free and accessible climate action website in order to allow citizens to participate in climate action, on topics such as greenhouse gas emissions, progress towards national targets, available funding sources, among others.

Climate policy governance

• Creation of the Council of Climate Action, a specialized body, whose function is to elaborate studies, evaluations and opinions on climate action and related legislation.
• Obligation for municipalities to approve within 24 months from the entry into force of this law, a municipal climate action plan.
• The commissions of coordination and regional development must prepare a regional climate action plan within 24 months from the entry into force of this law.

Planning and Evaluation Instruments

• The Government shall prepare and present to Parliament a National Strategy for Adaptation to Climate Change, to be in force for a period of 10 years.
• The Government shall develop and approve, every five years, sectoral plans for adaptation to climate change.

Economic and financial instruments

• The Government shall create and implement a category of tax deductions - Green IRS - that benefits taxpayers that acquire, consume or use environmentally sustainable goods and services.
• The existence of a financial instrument whose purpose is to support climate policies, contributing to the fulfilment of national and international targets and commitments, must also be ensured.
• The public and private agents and institutions, in their financing decisions should start taking into account the climate risk and the climate impact. The non-consideration of climate risk and climate impact in the short, medium and long term will be considered a breach of fiduciary duties.

Sectoral climate policy instruments

• The Government shall encourage the decarbonisation of the electric production system by ensuring: (i) the production of electricity from renewable sources; (ii) the prohibition of the use of coal for electricity production, from 2021 onwards; and (iii) the prohibition of the use of natural gas of fossil origin for electricity production, from 2040 onwards, provided that security of supply is ensured.
• The Government shall ensure the development of the electricity transmission and distribution networks, in the various electric voltage modalities, with a view to: (i) promote an intelligent and efficient grid, capable of integrating electricity production from increasingly renewable sources and storage and demand management solutions; (ii) rationalise grid access costs; and (iii) make available in a rational manner the capacity to inject into the electricity grid the production of electricity from renewable sources.
• The Government shall develop a public transport network that tends to integrate low emission or zero emission vehicles, with the aim of reducing emissions from this sector, ensuring citizens access to sustainable mobility and reducing congestion in cities.
• The Government shall prepare and present to Parliament, within 24 months of the entry into force of this law, the green industrial strategy which aims to provide a strategic framework to support companies in the process of climate transition in the industrial sector and in the fulfilment of the objectives set out in this law, reinforcing their sustainable competitiveness.

This law shall enter into force on 1 February 2022.