This is a summary of a report from the Canadian Embassy in Portugal which provides a complete review of the environmental sector in the country, with information on each subsector and the opportunities available to Canadian companies. A link to the full report is provided below.

Market Overview/Opportunities

Public awareness of environmental issues is increasing, with surveys indicating that air pollution and odours are the most important environmental concerns, followed by noise pollution. Recent statistical data showed that only 90% of the population has a supply of good quality water, with only 77% of water effluent (public works in course to reach 90% coverage after conclusion) and 99% of urban solid waste properly treated. Industrial pollution levels in Portugal correspond to a population of 26 million - 2.5 times the actual population. The EU targets a share of 38% as renewable energies by 2010, in line with the Kyoto Protocol which urges the country to reverse those trends

GLOBE-Net Update: in March 2007, Portugal’s assistant secretary of state, Antonio Castro Guerra, announced a plan to invest EUR 8.1 billion in renewable energy projects around the country.

Opportunities

Alternative energies, coastal zones erosion prevention, environmental planning, water, forest and energy resources planning and management, industrial solid waste, and recycling are the main opportunities for Canadian companies in Portugal’s environmental sector.

Cdn $11.67 billion was planned between 2000-2006 for water sanitation and waste treatment. EU funds of Cdn $4.17 billion were available, the balance to be funded by the government and the private sector. Portugal expects similar volumes of funding in the next 2007-2013 EU Cohesion Funds Programme for basic sanitation to meet average European standards. Limitations on the amount of public debt Portugal can assume provides the private sector with opportunities to undertake projects.

To attract private investment, since 1999 the Portuguese government offers a tax credit equal to 8% of the relevant investment in environmental protection assets such as equipment (in effluents, air pollution and solid waste). This tax credit is limited to 25% of net profit tax, to a maximum of Cdn $80,000.

• Biomass:
  Forest covers 38% (3306.1 thousand hectares) of the national territory. The forest biomass produced is 6.5 million tons/year, though the effective potential available is 2.2 million tons/year. The potential for production is 230 Mwe (equivalent to 1.4 twh/year in the grid) until 2010. Government has plans to sell concessions of 150 MW until 2010. As for liquid bio-combustible, there are just a few projects going on and just a few public buses use bio-diesel. The non-used potential bio-gas production would be 383 Gwh/year. The government is approving fiscal incentives to stimulate local production to reach the EU target of 5.75% of bio-combustible in public transportation by 2010.

  
  

• Wind Energy:
  The present capacity is approximately 1.131 MW of installed power as of February 2006 with 106 wind farms with a total of 703 turbans. The present main barriers to entry into this business are connection to the grid, environmental impact issues and bureaucratic procedures. This is considered one of the largest potential energy sources in Portugal and the government aims to reach an installed capacity of 2100 MW by 2007, and 4500 MW by 2010.

  
  

• Mini-Hydrics:
  There are presently 120 concessions awarded, of which 44 are already installed (170 MW installed power and 550 Gwh/year). There are also 54 other plants, meaning an installed capacity of 86 MW and 265 Gwh/year. Total installed capacity is 98 plants (256 MW power and an output of 815 Gwh/year). The total potential available is estimated as 1000 MW and a throughput of 1500 to 1800 Gwh/year by 2010.

  
  

• Ocean Energy:
  Portugal considers itself a leading centre for R&D on ocean energy. There is a very high potential in the coastal zone of the continent and also the Azores and the conversion of just 1% of the total available energy would produce 1.2 Twh/year, which (at a load factor of 0.25) would generate an installed capacity of 550 MW. Portugal has just joint-ventured with a Scottish firm to install a 2.25 MW off-shore wave energy plant as part of a total 24 MW capacity project. Government aims to reach 50 MW capacity of ocean energy by 2010.

  
  

• Solid Waste:
  Urban and Industrial: The government opened the management of urban solid waste to the private sector. There are a large number of small firms providing services such as street cleaning, and removal of waste for recycling. Industrial solid waste management is the most crucial, as currently industries deliver their waste to municipalities which generally have scarce (or no) means to handle it. Industrial waste prevention, cleaner technologies, and end-of-line technologies, are urgently required.

Market Access Issues

For any foreign company pursuing projects, a local agent or partner is essential. The present environmental sector outlook in Portugal makes for “market niche” opportunities for Canadian companies.

Major Competition

Major competitors are water management and supply contractors like Generale des Eaux (Portugal)Ltd, Lusaqua (Vivendi, Lyonnaise des Eaux), Aguapor (AdP Group), AGS (Somague Group), and Indáqua (Mota & Ca.) Which are already well positioned in the water supply area. French, Spanish, German and Italian companies are also active in other areas.

Canadian companies interested in this sector should be aware that the major customers are the Ministry of Environment (and indirectly the Ministry of Finance, which manages the EU funds) and municipalities, which regulate the sector, and launch the public tenders.

The full version of the report is available for download.

This report is courtesy of:

Carlos Lindo da Silva, Trade Commissioner
Canadian Embassy
Av. Liberdade, 198-200, 30
1269-121 Lisbon, Portugal
Tel 011-351-21-316-4655
Fax 011-351-21-316-4695
E-mail carlos.silva@international.gc.ca