Portugal - Country Commercial Guide

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2023-01-06


Portugal ranks as the 11th EU member state most dependent on imported energy sources, with a decreasing dependence since 2000, when 85% of its energy was imported.  This is mainly due to the lack of fossil energy sources, which continues to impact the total consumption of primary energy significantly.  The main fossil fuels that account for the primary energy supply are oil, natural gas, and coal.  It is estimated that Portugal’s fossil fuel dependence by 2030 will be around 65%.  Nevertheless, over the last two decades, Portugal focused heavily on developing renewable energy, primarily wind and solar, which helped the country lower its energy dependence to below 80%.

Portugal continues to be a global leader in renewable energy production.  A well-structured incentive mechanism and the adoption of ambitious targets helped this sector grow over the last couple of years.  Portugal’s new ambitious national energy and climate plan for 2030 and roadmap to carbon neutrality by 2050 targets at least 80% of electricity production coming from renewables and to further decarbonize the energy sector.

The government is committed to a policy that will support the development of the market and ensure decarbonization goals are met most cost-effectively.  There is a strong focus on electricity and natural gas interconnection to unlock the potential of Portugal’s solar and wind resources and liquefied natural gas capacity to support local economic development and European energy security.  To achieve these ambitious goals, Portugal announced the decommissioning of the country’s two coal-fired thermoelectric power plants.  The EDP coal-fired power plant in Sines closed in January 2021, and the Tejo Energia Pego power plant closed on the 30th of November 2021.  The country has also developed a hydrogen strategy to decrease natural gas imports and reduce greenhouse gas emissions by 2030.

Leading Sub-Sectors

Renewable Energy

At the end of June 2021, the installed capacity in units of production of electric energy from renewable sources was 14,762 MW.  According to the EU Directive 2009/28/E.C., the percentage target from renewable energy by June 2022 reached 58%.  The primary renewable energy sources included hydro, wind, solar, and biomass.  To speed up the deployment of solar projects, the government is also set to stop environmental impact assessments for sites with a capacity lower than 50MW. 

Portugal continues to be an attractive market for the development of renewable energy.  However, decision-making tends to be bureaucratic and collaborative relationships with local companies are considered the most appropriate strategy for entering the Portuguese market.  Any major project will mostly require some joint venture.  A sustained local presence, product exposure, or track record in the renewable energy industry will also be a significant asset while the market develops.

A recent example is the solar auctions, the first one launched in 2019, which awarded 1,400 MW at an average tariff of 20.4 euros per MWh, where the lowest reached 14.7 euros per MWh.  The second auction to award 700 MW was held on August 24 and 25, 2020.

Table: Installed Capacity

Installed Capacity (MW)





7, 353







Urban Solid Waste















Source: DGEG April 2022


Table: Electricity Generation by Type

Electricity Produced (GWh)


2022 (April)










Urban Solid Waste












TOTAL- adjusted



% of Renewable Energy (Real)



% of Renewable Energy (Directive 2001/77/EC)



Source: DGEG April 2022

Green Hydrogen

The government is promoting an industrial policy around hydrogen and renewable gases based on the definition of a set of public policies that guide, coordinate and mobilize public and private investment in projects areas of production, storage, transport, and consumption of renewable gases in Portugal.

According to the Government, Portugal has a competitive advantage over other countries due to its lower electricity production costs and considers that hydrogen production, through electrolysis, is only competitive if electricity prices are around or below 25 euros per MWh. 

The government’s main objective is to incorporate hydrogen as a sustainable and integrated pillar linked with various economic sectors and is in line with the strategy of transition to a decarbonized economy.  This has generated interest from local and foreign companies to develop hydrogen projects and look for synergies and partnerships.

There are opportunities for U.S. companies to participate in Portugal’s emerging hydrogen cluster.  U.S. investors and exporters of technology, parts, or components for the hydrogen sub-sector can take advantage of the favorable business environment.  Portugal aims to develop a new hydrogen cluster to produce green hydrogen using renewable-powered electrolysis that splits water (H2O) to make environmentally friendly hydrogen (H2) gas that can be used in zero-emission energy generation applications. 

Sines will receive an investment of 1.3 billion euros in a project of hydrogen and ammonia produced from renewable sources, led by the Portuguese-Dutch company Madoqua Ventures and supported by the Danish Copenhagen Infrastructure Partners and Dutch Power 2X.  It will allow the annual production of 70 thousand tons of green hydrogen, creating 500 direct and indirect jobs.

Natural Gas

Portugal was the first European country to receive U.S. liquefied natural gas (LNG) via the Port of Sines in 2016.  According to the latest statistics from the U.S. Department of Energy, Portugal has received 10.728 million cubic feet from the U.S. between January and March 2022.  Portugal currently ranks 15th worldwide (and 6th in Europe) with 1.9% of total imports of U.S. LNG.  The United States is Portugal’s second largest supplier of natural gas after Nigeria.

There are opportunities for U.S. and Portuguese investors to further expand the infrastructure at the Port of Sines due to its strategic position for LNG exports to Europe.  Portugal can act as an Atlantic LNG service station for vessels that use this energy source, using Sines’ port complemented with LNG floating bunkering units and/or ship-to-ship transfer solutions.  The country operates a virtual LNG pipeline between mainland Portugal and the Island of Madeira, which uses LNG ISO containers transported in a conventional containership alongside other commodities, cutting LNG shipping costs.  This concept can be further developed for LNG short-sea shipping to other regions lacking pipeline infrastructure.


Portugal is a small country with diverse mineral resources.  It is one of the EU’s significant copper, tin, lithium and tungsten producers and a global producer of marble, limestone, and granite.  According to the Directorate-General for Energy and Geology (DGEG), in 2019, the Portuguese mining industry had a production value of 1,039 million euros and an export value of 1,021 million euros that employed 9920 workers.  Regarding mines, in 2019, there were 851 active quarries and bottling/hydrotherapy entities.

The government is also committed to further developing the industry, namely a cluster around the lithium and battery industry, which includes a tender for the concession of new prospection licenses.  These may lead to the construction of lithium hydroxide refineries, battery materials laboratories, and the technology and equipment necessary to extract and process lithium.


The sector is very receptive to technological advances, which presents opportunities for market entry via collaborative research or partnerships with local companies.

U.S. products and solutions enjoy a good reputation in terms of reliability and high quality.  Nevertheless, purchase decisions are based on several factors, including cost, availability of financing, after-sales service, and technology transfer.  Obtaining up-to-date information on market dynamics is very important, given the fast-developing nature of the industry and the constant introduction of new technologies.

Portugal continues to play a significant role in Europe’s energy mix to improve Europe’s energy security and increase competition.  Portuguese companies are also looking for partnerships at all levels.

The renewable energy sector will continue to be active due to the Portuguese government and EU commitments to reduce oil dependency and greenhouse gas emissions.  U.S. manufacturers and exporters of parts and systems for large and small hydropower, controls, pumps, valves and monitors, biomass or biogas technology, engineered components and systems, low-cost solar water heaters, grid-connected solar kits, among other solutions, should seek the assistance of the U.S. Commercial Service in Portugal.


Ministry of Environment and Climate Change

Directorate-General for Energy and Geology

Portuguese Association for Renewable Energy

National Strategy for Hydrogen – Public Consultation

Portuguese Association for the Extractive and Manufacturing Industry


Key Government Regulatory Agencies

Ministry of Environment and Climate Change - https://www.portugal.gov.pt/pt/gc22/area-de-governo/ambiente-e-acao-climatica

Directorate-General for Energy and Geology - https://www.dgeg.gov.pt/

Portuguese Association for Renewable Energy  - https://www.apren.pt

Leading Products – NAICS

  • Hydroelectric Power Generation – 221111
  • Wind Electric Power Generation – 221115
  • Biomass Electric Power Generation – 221117
  • Solar Electric Power Generation – 221114
  • Other Electric Power Generation – 221118