Portugal

Portugal has emerged as a compelling destination for data centre investment in southern Europe, combining strategic geographic positioning, abundant renewable energy resources, and a regulatory environment increasingly oriented towards the facilitation of digital infrastructure. The country serves as a natural gateway to both the Iberian Peninsula and the wider European market, whilst its Atlantic coastline provides direct access to transatlantic and African submarine cable routes, existing industrial grid connections, and available land suitable for hyperscale development. The sector has attracted a substantive pipeline of investment proposals, driven principally by hyperscalers and AI-focused infrastructure investors seeking to capitalise on Portugal’s renewable energy endowment and its position outside the capacity-constrained markets of northern Europe.

Key contacts

Rita Xavier de Brito
Partner
[email protected]

Catarina Tavares Loureiro
Partner
[email protected]

João Louro e Costa
Counsel
[email protected]

Grid connection

Securing grid access in a capacity-constrained market

One of the key constraints for data centre investors and developers in Portugal is securing grid access for large-scale consumption. The rapid growth in demand for grid connection capacity – driven in significant part by an influx of data centre investment projects – has placed considerable strain on the Portuguese public electricity supply network and has prompted a substantive regulatory response from the Portuguese Government.

In Portugal, there are two key network operators. Rede Elétrica Nacional, S.A. (“REN”) is the holder of the transmission system public service concession and serves as the Portuguese transmission system operator (“TSO”). E-Redes – Energia S.A. (“E-Redes”) is the holder of the distribution system (medium and high voltage) concession and serves as the Portuguese distribution system operator (“DSO”). E-Redes is also the holder of a significant majority of the low-voltage municipal distribution grids. On the regulatory side, the Energy Services Regulatory Authority (Entidade Reguladora dos Serviços Energéticos, “ERSE”) acts as the independent regulator of the energy sector.

The Portuguese national electricity system is built upon a clear model of unbundling network activities from competitive activities. These unbundling rules mean that the ownership and operation of transmission and distribution network assets are activities exclusively reserved for the concession-holders and are not open to third parties (including data centre developers) on a standalone basis. While the developer may be responsible for the construction of connection infrastructure connecting a consumer installation to the grid, the connection infrastructure may become the property of the relevant network operator and be integrated into the public grid. This means that a data centre developer with significant connection requirements could, in principle, co-finance grid reinforcement works, although the infrastructure itself could remain under the concession-holder's ownership and control.

The connection queue: reform, priority pathways, and capacity allocation

The standard framework on grid access and connection of consumption installations is mainly set out in the ERSE Commercial Relations Regulation, which governs the conditions for the connection of electricity consumption installations to the public grid. As a general rule, the connection process works on a “first-come, first-served" basis and is initiated by the developer submitting a request to the relevant network operator. Developers must provide the technical information requested by the operator to perform studies to evaluate whether it can grant the requested grid connection and if any grid reinforcement works are necessary. For connections above a certain capacity and voltage, construction conditions and timelines are agreed between the developer and the relevant network operator.

The Portuguese National Data Centre Plan (“PNCD”), approved by the Resolution of the Council of Ministers no. 2/2026, of 8 January (“RCM 2/2026”) and Resolution of the Council of Ministers no. 70/2026, of 13 April (“RCM 70/2026”), acknowledges that grid connection times in Portugal are typically between 2 to 5 years, a range that reflects not only the complexity of technical works but also the length of administrative and licensing procedures as well as grid works and availability.

Submarine cable connectivity is itself now the subject of EU-level resilience policy and dedicated funding under the Commission’s February 2026 Action Plan on Cable Security, a consideration relevant both to the durability of Sines’s locational advantage and to the structuring of any cable consortium participation.

The PNCD explicitly identifies constraints on access to the electricity grid as one of the key challenges affecting project execution in Portugal. The combination of a rapidly growing demand pipeline – driven by hyperscale and AI-related data centre projects – and the relatively long timelines for both grid reinforcement and administrative procedures has created a de facto queue for large consumption connections, particularly in areas of concentrated demand (for example the town of Sines, which is considered attractive to developers due to its port infrastructure, existing industrial grid connections, access to submarine cable landing stations and available land). Submarine cable connectivity is itself now the subject of EU-level resilience policy and dedicated funding under the Commission’s February 2026 Action Plan on Cable Security, a consideration relevant both to the durability of Sines’s locational advantage and to the structuring of any cable consortium participation.

The Government’s response to this congestion was through the implementation of an exceptional regime developed to allocate interconnection consumption capacity in areas of high demand (excluding low voltage connection requests), as set out in Decree-Law no. 80/2023, of 6 September (“DL 80/2023”). The procedure is intended to be open, transparent, equitable, and competitive, and encompasses multiple potential phases: (i) manifestation of interest and posting of a performance bond, combined with identification of unused capacity; (ii) evaluation of demand and network reinforcement; (iii) making unused capacity available and, where applicable, mandatory waiver and assignment of dormant capacity; and (iv) auction procedure if necessary.

In February 2026, the Portuguese Government launched a public consultation for the manifestation of interest in the allocation of consumption-connection capacity in a high demand area composed of the entirety of the continental territory for medium and high voltage connections with a capacity above 20 MVA.

Within the DL 80/2023 mechanism, priority treatment is available to priority projects. Priority project status is available to projects with project-of-national-interest (“PIN”) status in certain at-risk sectors (as defined under EU State aid guidance) or to projects funded under specific innovation agendas under Portugal's Recovery and Resilience Plan (“PRR”). While there is no explicit fast-track category reserved for data centres as such, the combination of PIN or PRR status and the priority project regime under DL 80/2023 provides the most direct pathway to preferential capacity allocation for strategically significant projects.

Grid connection capacity constraints in Portugal are not geographically uniform: they are most pronounced in areas of concentrated data centre demand. In response, extending the DL 80/2023 exceptional procedure to the entirety of the continental grid territory in 2026 represented a recognition that localised capacity for consumption constraints are becoming a nationwide challenge, rather than one confined to a single area.

Within the DL 80/2023 mechanism, the legislator seeks to satisfy the demand for connection capacity of electricity consumption installations required, through network reformulation or reinforcement, as well as redispatch measures and the introduction of flexibility measures. Measures currently being developed under the PNCD include the identification and enabling of pre-licensed zones with early-stage licensing and coordinated planning for grid connection, as well as a review and simplification of licensing procedures to ensure more efficient processing within maximum statutory decision deadlines, while maintaining applicable legal, technical, and environmental requirements.

Flexibility obligations, connection charging, and the use-it-or-lose-it discipline

Portugal does not currently impose sector-specific mandatory demand response or interruptibility obligations on large consumers such as data centres. There is, however, a form of capacity-specific "use-it-or-lose-it" discipline embedded in the exceptional connection capacity-allocation framework established by DL 80/2023, under which holders of allocated but unused grid connection capacity for consumption are notified and required either to present evidence of their need for the allocated capacity with a corresponding use timetable, or to voluntarily make the capacity available to meet demand from incoming applicants, with the warning that failure to do so may result in mandatory assignment.

Looking ahead, the PNCD’s Energy and Infrastructure axis includes an initiative, which aims to integrate energy efficiency criteria and demand flexibility mechanisms in planned grid connection infrastructure, promoting more efficient network use and greater resilience of the energy system. This initiative signals that the Government intends to formalise demand-side flexibility requirements as a structural element of future data centre grid connections, though the precise legal instruments and financial incentive mechanisms remain to be defined in implementing legislation.

The connection charging framework applicable to large electricity consumers – including data centres – is set out principally in ERSE Commercial Relations Regulation. As a general principle, the costs associated with a new connection are structured around the four main components: (i) costs of connection elements (the physical infrastructures linking the installation to the grid); (ii) a standardised network contribution, calculated by multiplying the ERSE-published unit value in €/kVA by the requested power, with the applicable unit value varying by voltage level and published periodically by ERSE; (iii) connection service charges, which cover items such as site visits, design documents, budgeting, and construction supervision; and (iv) third-party costs, which reflect costs incurred by the operator in connection with works carried out by third parties necessary to implement the connection. In relation to metering, large electricity consumers connected at medium, high or very high voltage are subject to mandatory remote metering under the applicable ERSE regulatory framework and network operator’s technical specifications, enabling both the network operator and suppliers to access such data for billing, settlement and network management purposes.

Power access and procurement

Power procurement: a mature PPA market with strategic cost levers

Portuguese law permits data centre operators to use a range of power procurement structures. Physical PPAs – long-term bilateral agreements under which a producer supplies electricity from a specified renewable generation asset to a consumer, with delivery effected through the public grid – are a well-established instrument in the Portuguese market. Virtual, or synthetic, PPAs are similarly available: under such structures, the data centre operator continues to procure electricity at market prices through a power supplier, whilst the PPA counterparty provides a financial settlement mechanism (typically structured as a CfD) by which the parties exchange the difference between an agreed strike price and the relevant market reference price. Virtual PPAs do not constitute regulated electricity supply contracts under Portuguese law and are generally structured as private law commercial agreements, however, where the arrangement qualifies as a commodity derivative under Directive 2014/65/EU (MiFID II) as implemented in Portugal, the requirements of the applicable financial markets framework will apply accordingly. As regards direct supply arrangements, Decree-Law no. 15/2022, of 14 January (“DL 15/2022”) provides for individual and collective self-consumption of electricity from renewable sources, under which a data centre operator may develop or commission on-site or proximate renewable generation capacity and consume the output directly, subject to applicable technical, environmental and administrative licensing requirements. Co-located backup generation, including different types of power generation and energy storage systems, is similarly permitted subject to the applicable licensing regimes.

From a cost perspective, the interaction between the chosen procurement structure and regulated network charges is a material consideration. Where electricity is consumed from the public grid – as is the case with physical and virtual PPAs – access tariffs and general economic interest charges (“CIEG”) apply on the volume consumed. Electricity generated and self-consumed on-site without injection into or import from the public grid is, in principle, exempt from access tariffs on the self-consumed portion, which may represent a meaningful cost advantage for operators able to optimise on-site generation against load. As noted in section 6.3.1 below, operators qualifying for electro-intensive consumer status may additionally benefit from significant reductions in CIEG charges, irrespective of the procurement structure adopted. The Portuguese corporate renewable PPA market is active and benefits from the country’s abundant renewable assets. Portugal has been active in terms of executed corporate PPAs, with a growing number of hyperscale and infrastructure investors having concluded long-term renewable supply agreements, particularly in connection with utility-scale solar and onshore wind projects.

Portugal currently has no operational nuclear power plants and, unlike several of its European neighbours, has not historically pursued nuclear energy as part of its electricity generation mix. Absent a fundamental shift in Portuguese energy policy, in-country nuclear power generation is not expected to be available in the short to medium term.

Guarantees of Origin: European interoperability and the approaching granularity standard

Portugal operates a guarantee of origin (“GOs”) scheme for the certification of the electricity produced from renewable energy sources, including GOs for renewable electricity and for renewable heating and cooling, and GOs for renewable gases and low-carbon gases. Each GO represents one megawatt-hour (MWh) of energy produced from a qualifying renewable source. The Portuguese GO framework does not impose a mandatory additionality requirement as a condition of GO issuance; that is, there is no general rule restricting the issuance of GOs exclusively to newly commissioned generation facilities. GO issuance is therefore implemented irrespective of the age of the installation.

For GO issuance, the system operates by reference to a period tied to the production period recorded on the GO, with the default reference period for production declarations being one month. For cancellation – the mechanism by which a consumer claims the renewable attribute of a GO – the relevant consumption period must be continuous, cannot exceed twelve months, and cannot span different civil years, meaning that in practice GO matching in Portugal operates on an annual or sub-annual basis. The GOs framework does not currently prescribe hourly certificate matching, nor does Portugal seem to be moving towards a more granular certificate matching. However, with Renewable Energy Directive (Directive (EU) 2023/2413, “RED III”) introducing provisions designed to encourage more granular – including hourly – matching of renewable energy consumption with production, it is reasonable to expect that Portuguese implementing legislation will progressively align with those requirements in the coming years.

Portugal’s GO framework is designed to operate within the European Energy Certificate System (“EECS”), administered by the Association of Issuing Bodies (“AIB”), with cross-border interoperability facilitated through the AIB as GOs are mutually recognised across the AIB member network (encompassing most of Europe’s electricity markets). International transfers of GOs – both imports into Portugal and exports from Portugal – are, where possible, carried out through the AIB in accordance with the EECS framework and AIB rules. GOs from other EU Member States are recognised unless there are well-founded doubts as to their accuracy, reliability, or veracity, and any refusal of recognition, together with the reasons therefor, must be communicated to the competent authorities. Portugal is accordingly fully aligned with the EU GOs framework established under the Renewable Energy Directive and its successors. This mutual recognition is particularly relevant for data centre operators operating across multiple European jurisdictions, as it allows GOs sourced in one EU Member State to be cancelled and claimed by a consumer in another, facilitating European renewable energy procurement strategies.

National strategy, investment incentives, and planning

AI data centre policy architecture, tax levers, and tariff benefits

The Portuguese Government's national AI strategy is structured around two pillars.

The first is the National Artificial Intelligence Agenda, approved by the RCM 2/2026, which sets forth several key measures and actions to be carried out by the Portuguese Government in the field of AI between 2026 and 2030, foresees key measures including the implementation of the PNCD, the creation of zones with simplified licensing procedures, and the establishment of a centralised investor support structure.

The second pillar is the PNCD, approved by RCM 70/2026, which outlines the Portuguese State's strategy for strengthening the country’s computational capacity and digital infrastructure, spread into four strategic areas: the economic axis, the digital and technological axis, the energy and environmental axis, and the governance and administrative simplification axis.

Portugal does not have a specific tax regime for data centres, nor government-designated zones with specific incentives to be awarded upon the construction or operation of data centres. Nevertheless, Portuguese law provides a range of tax benefits relevant to data centre development. These include tax benefit regimes for productive investment, such as Decree-Law no. 162/2014, of 31 October (“DL 162/2014”), which allows deductions from corporate income tax liability based on eligible investment under the provisions of DL 162/2014, as well as exemptions from or reductions in municipal property tax, municipal property transfer tax, and stamp duty. Furthermore, these benefits are supplemented by contractual investment incentive regimes negotiated with the Portuguese State on a case-by-case basis, which may include tax credits and property tax benefits. Finally, subsidies and support may also be granted in the future under European-based investment programmes such as Portugal 2030 and the Portuguese Recovery and Resilience Facility.

Regarding energy tariffs benefits, obtaining the electro-intensive customer status under the provisions of DL 15/2022 allows for reductions of between 75% and 85% on general economic interest charges levied for using the electricity grid. This regime may be particularly relevant for data centre operators with high energy consumption, although it does not constitute a sector-specific incentive.

NIS2 obligations and supervisory architecture

In Portugal, data centre service providers are expressly designated as essential entities pursuant to Decree-Law no. 125/2025, of 4 December (“DL 125/2025”) and may be designated as critical entities after a national risk assessment under the terms of Decree-Law no. 22/2025, of 19 March (“DL 22/2025”). These providers are subject to the supervision of the Portuguese National Cybersecurity Centre (“CNCS”) which is the competent regulatory body with supervisory authority over the sector.

The supervisory regime applicable to data centres depends on whether their respective managing entities are classified as “essential entities” or “important entities” under DL 125/2025, which is determined by whether they have more than 250 employees, and whether their annual turnover or annual balance sheet total exceeds EUR 50 million or EUR 43 million respectively (in case of certain categories of entities, those are in scope regardless of their size). While essential entities are subject to continuous ex-ante supervision (including inspections, regular audits and information requests), important entities are subject to ex-post supervision, which is triggered in the event of evidence of non-compliance with applicable legal obligations.

Data centre service providers must adopt enhanced cybersecurity and operational resilience measures, including technical, organisational, and risk management measures aimed at preventing, responding to, and recovering from incidents. These measures also require the appointment of responsible internal officers and impose duties of cooperation and notification with regard to the relevant authorities, including the CNCS.

Foreign investment screening: narrow scope, cumulative triggers, and third-country acquirers

Portugal does not have a specific foreign investment screening regime exclusively applicable to data centre acquisitions or investments. However, pursuant to Decree-Law no. 138/2014, of 15 September (“DL 138/2014”), Portugal has established a foreign direct investment screening regime for acquisitions of control over strategic assets in the energy, transport, and communications sectors. For these purposes, “strategic assets” are defined as the main infrastructures and assets devoted to national defence and security, as well as to the provision of essential services in the energy, transport, and communications sectors.

Under DL 138/2014, the Portuguese Government has the power, in exceptional circumstances and through a reasoned decision, to oppose the acquisition, by persons from third countries outside the European Union (“EU”) and the European Economic Area (“EEA”), of direct or indirect control over such strategic assets, where such transactions may jeopardise national defence and security or the security of supply of essential services to the national interest.

The application of DL 138/2014 to any particular transaction is, however, subject to the cumulative satisfaction of the following requirements: (i) the relevant asset must fall within one of the covered sectors: namely, energy, transport or communications; (ii) the asset must qualify as a “strategic asset” within the meaning of the regime; (iii) the asset must be operational at the time of the transaction; and (iv) the acquirer must be a person from a third country, that is to say, a country outside the EU and the EEA. Where any of these conditions is not satisfied, the provisions of DL 138/2014 will not apply.

Where all of the above conditions are met, the Portuguese Government may initiate an assessment procedure on its own motion within 30 days of the transaction's signing or from the date on which it was publicly disclosed. Furthermore, entities involved in the transaction may request confirmation from the Portuguese Government that no assessment procedure will be initiated and no decision to oppose the transaction will be adopted. In both cases, the absence of a decision by the Portuguese Government indicates non-opposition to the transaction in question. Should a decision of opposition be adopted, any legal acts and transactions relating to the operation in question shall be null and void, including those concerning the economic exploitation of or exercise of rights over the assets or the entities controlling them.

Accordingly, an investment in a data centre would be subject to a case-by-case analysis as it may be subject to DL 138/2014 – but only to the extent that the data centre in question is operational, qualifies as a strategic asset within the relevant sectors, and the acquirer of control is an investor from a third country outside the EU and the EEA.

Data localisation: a permissive general regime with sectoral exceptions

Portugal does not impose a general mandatory data localisation requirement for personal or non-personal data. As an EU Member State, Portugal is subject to the directly applicable framework established by Regulation (EU) 2016/679 (the “GDPR”). The Portuguese data protection framework, including Law no. 58/2019, of 8 August (which ensures the implementation of the GDPR in the Portuguese legal order), does not introduce any additional data localisation obligation beyond those arising from the GDPR itself.

Notwithstanding the absence of a general data localisation obligation, certain sector-specific rules and guidance from the relevant supervisory authorities may, in practice, constrain the location of data processing and storage. In the financial sector, prudential supervisory requirements – including those arising from the European Central Bank’s supervisory framework and the European Banking Authority’s guidelines on outsourcing – impose conditions on the outsourcing of critical or important functions, including requirements relating to data access, auditability, and supervisory oversight, which may effectively favour the retention of certain data within the EEA or within jurisdictions subject to equivalent regulatory standards. In the health sector, while there is no express statutory requirement mandating that health data be stored in Portugal, the processing of health data is subject to enhanced protections under the GDPR and Law no. 58/2019, and sector-specific rules governing the national health system may impose conditions on the hosting and accessibility of patient data. As regards government and classified data, the Portuguese national security classification framework – governed by the applicable SEGNAC regulations (National Security Department) – imposes restrictions on the handling, storage, and transmission of classified information, which may require that certain categories of government workloads be processed and stored within national territory or in facilities meeting specific security accreditation standards.

The practical impact of data localisation and security classification requirements on data centre siting decisions in Portugal is, at present, relatively limited for private sector operators, given the absence of a general localisation mandate and the free movement framework applicable within the EEA. Portugal’s position as an EU Member State, combined with its geographic location makes it an attractive jurisdiction for operators seeking to serve European and transatlantic markets without encountering cross-border data transfer restrictions within the EEA. However, for operators seeking to host government workloads or data subject to national security classification, the applicable SEGNAC requirements and any future implementing measures under the PNCD may influence siting decisions in favour of facilities located within Portuguese territory and meeting the requisite security accreditation standards. The PNCD acknowledges the importance of aligning Portugal’s digital infrastructure strategy with applicable data sovereignty and security requirements, and future regulatory developments in this area may further shape the conditions under which data centre operators are able to host public-sector and security-sensitive workloads.

Planning classification: municipal variability and pre-licensing uncertainty

Portugal does not have a land use or zoning classification specifically for data centres. The applicable planning framework depends on the relevant municipal master plan (plano diretor municipal) and the classification assigned by the licensing authority. Municipal practice varies depending on whether the data centre is intended for industrial, storage, tertiary, or technology services use. This lack of a uniform classification creates uncertainty during the pre-licensing stage and has been identified as an obstacle to sector development in the PNCD.

The applicable licensing process is governed by Decree-Law no. 555/99, of 16 December, which controls building operations at a municipal level.

Fast-track consenting: the PIN regime and the PNCD’s pre-installed zones

Currently, Portugal does not have a national or fast-track infrastructure regime applicable to data centres specifically. There is also no centralised licensing mechanism that would combine all the planning, environmental, and sectoral consents required for such projects in a single authorisation, which only exists at the environmental licensing level.

Against this backdrop, the PNCD identifies the simplification and rationalisation of licensing procedures as a strategic priority, proposing the establishment of “pre-installed zones” - areas with a pre-prepared planning and environmental framework, as well as coordinated planning of connections to essential infrastructure, including energy and telecommunications networks. However, this remains a programmatic policy direction that has not yet been implemented in legislative terms.

Moreover, as stated above, the PIN (Projeto de Interesse Nacional) regime is a Portuguese legal framework, established to attract and facilitate large-scale investment projects considered to be of potential national interest. Under the regime, projects meeting certain eligibility thresholds – typically relating to investment volume, job creation, technological innovation, export capacity, or contribution to regional development – may apply for PIN status, which grants them a streamlined and expedited treatment by public authorities. Once classified as PIN projects, investors benefit from a coordinated, single-point-of-contact approach with the public administration, priority handling of licensing and permitting procedures, and dedicated support from relevant government agencies, including AICEP (Agência para o Investimento e Comércio Externo de Portugal).

Environmental regulation and sustainability

Case-by-case EIA screening

In Portugal, data centres are not automatically subject to an environmental impact assessment (“EIA”) under Decree-Law no. 151-B/2013, of 31 October. Whether they are subject to this regime depends on a case-by-case screening decision by the relevant public authority (namely, the Portuguese Environmental Agency or the entity responsible for the project’s licensing procedure), which is responsible for granting the necessary administrative authorisation for the project, and depends on the project’s characteristics and size.

Energy efficiency: a transitional regime moving towards European alignment

Portugal does not currently impose mandatory energy efficiency standards on data centres, but rather a layered framework of EU-derived reporting obligations, tariff conditionality, and forthcoming implementing legislation. The present regime rests on Directive (EU) 2012/27 and Directive (EU) 2013/17, together with the Portuguese instruments that transpose them.

Two domestic instruments operate at different levels. On one hand, Decree-Law no. 68-A/2015, of 30 April addresses energy consumption at the company level: mandatory four-year independent energy audits (unless a certified energy or environmental management system is in place), energy management systems, and incentives for technological modernisation. On the other hand, Decree-Law no. 84/2024, of 4 November, which partially transposed Directive (EU) 2023/1791 and gives effect to Commission Delegated Regulation (EU) 2024/1364, addresses data centres as a specific asset class, imposing reporting and public disclosure obligations on facilities with an installed IT power capacity of 500 kW or above across energy consumption, renewable energy use, waste heat reuse, water consumption, and other efficiency indicators. The regimes are cumulative, and operators caught by both must reconcile divergent reporting cycles, indicator sets, and supervisory channels.

Transposition of Directive (EU) 2023/1791 remains incomplete, and there is no meaningful administrative or case law experience to draw upon. However, once the EU Data Centre Energy Efficiency Package is adopted, it is expected to introduce harmonised thresholds applying directly across Member States, converting disclosure into substantive performance standards.

The most immediate point at which energy efficiency is already a binding commercial condition lies in the electro-intensive customer regime under DL 15/2022: maintaining that status requires implementation of an EN ISO 50001:2018 certified energy management system within three years of joining the scheme. The ISO 50001 condition is the gating criterion for access to the most valuable tariff reductions available under Portuguese law.

Finally, in Portugal, energy efficiency is not yet a standalone requirement for grid access or prior control permits, but that is an artefact of regulatory lag. Data centre operators assume that mandatory thresholds will be introduced within the current investment horizon, that retrofitting compliance is materially more expensive than designing to anticipated future standards, and that the current electro-intensive status and PNCD eligibility already track performance levels that are likely to be mandated in due course.

Waste heat recovery: an emerging frontier with structural constraints

Currently, Portugal imposes no mandatory obligations on data centre operators regarding the supply or utilisation of waste heat, placing it at the permissive end of the European spectrum, which is shifting rapidly towards ever-greater prescription. The structural constraints on the Portuguese regime are real: a limited district heating infrastructure, a climatic profile that reduces the marginal heating value of recovered heat, and a geographic distribution of likely clusters at distance from concentrated industrial offtakers.

There are currently no known reference projects in Portugal involving the use of waste heat from data centres in district heating networks or industrial processes. The PNCD does, however, identify waste heat recovery as a relevant technological solution for the sustainability of the sector.

Sustainability reporting: a European framework awaiting domestic implementation

The sustainability reporting obligations applicable to data centre operators in Portugal arise principally from EU law, with no national instruments specifically targeting the sector. The Portuguese position is defined by the interaction between the directly applicable elements of the EU framework, the ongoing process of domestic transposition, and the sector-specific reporting introduced by Decree-Law no. 84/2024.

The CSRD has not yet been transposed into Portuguese law, but that is not equivalent to non-application. The obligation to prepare and publish a sustainability report within the scope and timeline specified in the CSRD is sufficiently precise and unconditional to engage direct effect; the substantive content of that report is separately governed by the ESRS adopted under Commission Delegated Regulation (EU) 2023/2772, which as a directly applicable delegated regulation requires no transposition. In-scope operators cannot defer compliance pending domestic implementation, although the practical enforceability of those obligations remains incomplete: Portugal has not yet designated the competent supervisory authority or established the administrative penalty regime required under Articles 34 and 51 of CSRD. Operators subject to both the CSRD and Decree-Law no. 84/2024 face real friction in the interim: their reporting cycles do not align, their indicators differ, and the audiences to whom each instrument’s disclosures are directed have different expectations. That coordination burden is transitional, rather than permanent – once CSRD is transposed, it will largely supersede the domestic regime – but it is presently unmitigated by any consolidated Portuguese guidance.

No publicly relevant greenwashing investigations or enforcement proceedings have targeted data centre operators or their energy suppliers in Portugal to date. That absence reflects regulatory lag rather than low risk. The Portuguese Consumer Directorate (Direção-Geral do Consumidor) has demonstrably intensified its attention to environmental claims: in 2024, it reviewed more than 250 advertising messages in the energy sector and intervened to require the withdrawal of a ‘fly greener’ claim, following a complaint by DECO Proteste (Portugal’s principal consumer protection association).

Real estate

Site acquisition

Due diligence in the real estate sector should focus on reviewing land registry certificates for properties on which data centres are located, as well as verifying relevant unregistered matters. Key aspects to examine include the chain of title, registered encumbrances, unregistered third-party rights, compatibility of the use permit with intended use (i.e. as a data centre), exposure to environmental risks (including soil contamination) and the land's physical and geotechnical conditions. The allocation of risk between the seller and the buyer is governed by the general rules of the Portuguese Civil Code and is typically supplemented by contractual warranties and representations, specific indemnities, and, in some cases, price retention or escrow mechanisms in line with market practice for real estate transactions.

In Portugal, the main structures for securing the right to use a property for a data centre are freehold acquisition, surface rights and commercial leases. Freehold acquisition provides maximum operational flexibility, significantly reducing the risk of third-party interference whilst facilitating financing through the granting of security interests over the property. The surface right enables infrastructure to be constructed or maintained on third-party land and is frequently used in project finance structures. It is a transferable and encumberable real right (including by way of mortgage) and may be constituted for a fixed or indefinite term. Upon expiry, ownership of the constructions reverts to the landowner, and the parties may agree on compensation or indemnity mechanisms. This structure offers an intermediate risk profile: it is less exposed to landlord insolvency than a lease, but dependent on the stability of the constituted right.

Non-residential leases must be in writing and may only be agreed for a maximum term of 30 years. Leases exceeding six years are mandatorily subject to land registration, which reinforces their enforceability against third parties and purchasers of the property. In the event of a property transfer or landlord insolvency, the lease generally remains in force under applicable civil and insolvency legislation. However, the tenant's position depends on the lease's enforceability and the insolvency proceedings' specific circumstances. Portuguese law does not provide for statutory step-in rights for lenders in lease agreements. These are usually addressed in the contract and, if necessary, through tripartite agreements between the lender, operator, and landlord.

Space provided to third-party tenants may be offered as a sub-lease, which is subject to the non-residential lease regime. Alternatively, service agreements can be used to avoid the mandatory lease regime. In the latter case, care must be taken to ensure that the arrangement is not reclassified as a lease, particularly by granting exclusive and stable use of a defined area. Where a head lease is in place, it is essential that the agreement expressly authorises the transfer of use to third parties; otherwise, the subletting will be invalid. The fit-out obligations, service levels, operator access for installation and maintenance of equipment, allocation of preventive and corrective maintenance responsibilities, and reinstatement of the space at the end of the term should be expressly regulated in the contract.

Securing power, fibre, and water access across third-party land

The routing of power, fibre optics, and water connections across third-party land may require the establishment of predial servitudes (easements), or the use of administrative mechanisms as set out in sector-specific legislation.

These servitudes may be established by operation of law, contract, will, usucaption or pursuant to the doctrine of the common owner, or as a result of a judicial or administrative decision. Two particularly relevant examples are the statutory right of way, which applies when a property lacks adequate access to a public highway and must be established via the route and means that impose the least burden on the servient tenement, and the statutory water channel easement, which allows water to be conveyed across third-party land for agricultural or industrial purposes. In both cases, the establishment of these servitudes requires the payment of compensation to the owner of the affected property.

In the energy and telecommunications sectors, administrative servitudes and other statutory rights to install infrastructure on third-party land are particularly relevant, specifically in relation to electricity and electronic communications networks. These provide more structured mechanisms where it is not possible to obtain the consent of the affected landowners.

In practice, obtaining these rights often requires negotiation with affected landowners along the infrastructure route. This can introduce significant delays to the project timeline and increase implementation costs, especially where there is no applicable framework of administrative servitudes or public utility regimes to allow for the coercive imposition of the burden.

Predial servitudes are subject to land registration and once constituted and registered they attach to the burdened property and bind subsequent owners in the event of a transfer. However, outside the cases expressly provided for by law, there are no general mechanisms to unilaterally impose servitudes on landowners who refuse to encumber their properties. This leaves the operator dependent on obtaining private agreements, identifying alternative routes, or, where there is a legal basis, resorting to the courts to recognise the rights arising from such servitudes.