Portugal currently applies a tax and parafiscal burden on the renewable energy sector that, according to a study by Nova School of Business and Economics (Nova SBE) and law firm Lobo Carmona commissioned by the Portuguese Renewable Energy Association (APREN), has no equivalent elsewhere in Europe. The report argues that sector-specific taxes are discouraging new investment and reducing the country's competitiveness.

The study estimates that the renewable energy sector generated €1.11 billion in total tax contributions in 2024, equivalent to 1.16% of Portugal's total tax revenue. It also contributed €5.34 billion to GDP, supported 62,434 jobs, avoided €2.1 billion in fossil fuel imports, and prevented 11.7 million tonnes of CO2 emissions.

According to the report, companies in the sector face an overall tax burden equivalent to around 35% of their profits, despite already paying an effective corporate income tax rate above the national average. In addition, sector-specific parafiscal charges reached €135 million in 2024, while renewable energy companies paid €312 million through the Extraordinary Energy Sector Contribution (CESE) and the clawback mechanism between 2020 and 2024.

The authors state that Portugal is currently the only European country maintaining a permanent levy of this kind on renewable energy producers, taxing the net value of assets regardless of whether projects generate profits. According to the study, this creates a more burdensome and less competitive tax framework than those found in other European markets.

The report identifies regulatory barriers—not technology costs—as the main obstacle to further renewable energy deployment. It estimates that around €60 billion in planned investments remain stalled due to permitting processes lasting between five and seven years, limited grid capacity, and the absence of new renewable energy auctions since 2022. To meet the targets of Portugal's National Energy and Climate Plan (NECP) 2030, the country needs to install an additional 22.2 GW of renewable capacity.

The study concludes that removing these barriers could increase the sector's annual tax contribution to €2.8 billion, more than double its current level, while each year of delay represents an estimated €1.7 billion in lost potential tax revenue. Under a scenario in which Portugal achieves its NECP targets, the report projects that the green economy could generate €4.79 billion in tax revenues by 2030, contribute €32.2 billion to GDP by 2040, and increase sector employment by more than 400%.

The report recommends eliminating the CESE, reducing permitting times to less than three years, relaunching renewable energy auctions under a predictable schedule, expanding transmission grid investment, promoting power purchase agreements (PPAs), revising electricity tariff structures, and increasing the redistribution of tax revenues to communities hosting renewable energy projects.