The Portuguese Government has kicked off the voluntary carbon market, an increasingly relevant instrument in the transition to a green economy. But what exactly does this new market mean and why are so many companies and citizens paying attention to this development?

What is the voluntary carbon market?
The voluntary carbon market is a system that allows the offsetting of greenhouse gas (GHG) emissions on a non-mandatory basis. In other words, companies, institutions or even individuals can purchase carbon credits to compensate for emissions they are unable to eliminate directly.

Each carbon credit corresponds to one tonne of CO₂ equivalent (tCO₂e) that has been avoided or removed from the atmosphere, usually through sustainable projects such as reforestation, ecosystem conservation, renewable energy or regenerative agriculture.

Unlike the regulated market, which is mandatory and managed by public entities (such as the European Union Emissions Trading System – EU ETS), the voluntary market operates more flexibly, based on ethical and environmental commitments.

The voluntary carbon market is a system in which companies, institutions or even individuals can offset their CO₂ emissions voluntarily, meaning they choose to make a difference, not because they are required by law.

How does it work?
Each carbon credit represents one tonne of carbon dioxide that was not emitted or was removed from the atmosphere through projects such as:

• Forest planting and preservation;
• Renewable energy (solar, wind, biomass…);
• Sustainable agriculture;
• Protection of natural ecosystems.

By purchasing these credits, those who emit polluting gases (such as companies with transportation or industrial production) can offset the environmental impact they cannot eliminate directly.

What is the Portuguese Government implementing?
The Portuguese Government has recently announced the launch of a national voluntary carbon market, which aims to:

• Certify national carbon sequestration projects (in forests, soils, oceans, etc.);
• Increase transparency in the buying and selling of credits;
• Support rural and environmental development by channeling funds into sustainable projects;
• Position Portugal as a reference in the European green economy.

This system will be supervised by public entities, ensuring that the credits are reliable, traceable and have real impact, combating so-called greenwashing — when the environmental benefits of an action are exaggerated.

What are the main benefits?

1. For the environment
The most direct benefit is the net reduction of global carbon emissions. Supported projects help restore ecosystems, protect forests and encourage more sustainable agricultural practices.

2. For companies
Participating in this market is a concrete way to assume climate responsibility and strengthen a sustainability-driven image. In addition, companies can:

• Offset unavoidable emissions;
• Achieve carbon neutrality targets;
• Differentiate themselves in the market among increasingly conscious consumers.

3. For local communities
Carbon offset projects can generate green jobs, enhance rural areas and promote innovation. In many cases, invested funds remain within the regions, directly benefiting local populations.

4. For the country
The voluntary market contributes to national and European climate goals, while also attracting sustainable foreign investment and boosting the Portuguese green economy.

Challenges and next steps
Despite its potential, the voluntary carbon market faces challenges:

• Ensuring credibility and independent verification of projects;
• Avoiding double counting of emission reductions;
• Creating attractive economic incentives for participants.

The Portuguese voluntary carbon market is an important step towards a more sustainable and competitive economy. More than a financial tool, it is an instrument of environmental responsibility that transforms the fight against climate change into an opportunity for development and innovation. The green future is being built now, and each carbon credit can be an investment in that future.

Andreia Arenga
30.10.2025

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