Portuguese Manufacturers Lose €1.3B to Red Tape, Jeopardizing Jobs and Exports

Factories are designed, plots of land have been reserved and financing is lined up, yet the cranes stay idle. Portuguese businesses say a maze of environmental approvals is trapping money and momentum at the very moment the country needs fresh capacity to meet export orders and hit climate-transition targets.

At a glance

A snapshot of the industry survey lays bare the magnitude of the log-jam. The questionnaire carried out by the Association of Portuguese Industry points to €1.3 B in stranded capital, of which 730 M still await technical opinions and another 490 M were simply abandoned. Fully 44 % of dossiers have been stuck for more than two years, while 14 % are older than five. The toughest chokepoints involve Planos Diretores Municipais, clearance from Reserva Ecológica Nacional and Reserva Agrícola Nacional rules, and slow sign-offs on Planos de Pormenor and Planos de Urbanização. Companies name the Agência Portuguesa do Ambiente, the Comissões de Coordenação e Desenvolvimento Regional and the Instituto da Conservação da Natureza e das Florestas as the most common bottlenecks.

A queue worth €1.3 B

What does that headline figure actually represent? Mostly bricks and mortar. Roughly 43 % of the blocked money would finance new production units, 33 % would enlarge existing plants and 21 % covers specialised machinery. The majority of respondents operate in manufacturing, a sector that already delivers almost 22 % of Portuguese exports. Executives argue that every month of delay hits cash-flow projections, forces them to turn away orders and ultimately nudges jobs toward competing hubs in Spain or Eastern Europe.

Two years feels like forever

Portuguese licensing law offers regulators ninety working days to rule on an application. In practice, deadlines slip, additional documents are requested and the calendar restarts. Entrepreneurs report having to hire full-time staff just to push files from one desk to the next. In regions such as the Centro and Alentejo, where industrial sites overlap sensitive habitats, the number of mandatory opinions can exceed a dozen. One automotive supplier interviewed by this newspaper said it began its expansion paperwork in 2019 and is still waiting for a final signature despite having already paid €450,000 in municipal fees and environmental studies.

Where the paperwork stalls

Urban planning rules sit at the heart of the impasse. Any change to a Plano Diretor Municipal can trigger an environmental impact screening even if the plot has been zoned for industry for decades. Meanwhile, releasing land from REN or RAN protection demands joint approval from agriculture, environment and regional agencies. Overlapping mandates mean that a rejection at any point sends the file back to square one. Industry lawyers have counted more than 30 different legal instruments that can be invoked during a single authorisation cascade. The situation is compounded by remote-working patterns adopted during the pandemic which never fully reversed, leaving thinly staffed desks and longer feedback cycles.

Business frustration turns into proposals

Faced with rising carrying costs, companies are no longer talking about tweaks but about structural change. The AIP survey shows 76 % of respondents favour giving the Economy Ministry exclusive authority to issue environmental licences for industrial projects, arguing it would bundle expertise and shorten lines of accountability. A similar share demands legally binding maximum response times, after which tacit approval would apply. Executives also call for a roll-back of 2021 legislation that handed part of the licensing burden to private zone-management firms, a move they say simply added another invoice without removing a single form.

Reform promises still on the paper

Lisbon insists it has heard the complaints. Decree-Law 11/2023 trimmed the list of projects requiring a full Environmental Impact Assessment and introduced corridor-wide reviews for rail and energy lines. Decree-Law 10/2024 tackled urban-planning hurdles by setting a 30-day clock for municipal licences and a 60-day limit for environmental ones. Officials also point to the Portugal 2030 funding round, which sets aside €400 M for greener production lines. Yet the AIP data suggest the toolbox has not bitten: many of the delayed projects entered the pipeline after the reforms took effect.

Environmental voices warn about shortcuts

Green organisations acknowledge the bureaucratic drag but caution against turning simplification into deregulation. The group ZERO argues that Portugal’s tragic history with industrial accidents shows why rigorous checks matter. Activists fear that replacing scientific review with automatic clearance could expose communities to pollution risks and undermine long-term climate goals. They instead propose boosting agency budgets so that technical staff can be hired, trained and retained, thereby tackling the root cause of slow verdicts.

Inside the European context

Brussels sees the same tension across the bloc. A 2025 sustainability scoreboard estimates that Portugal needs an extra €1.6 B of annual eco-investment to meet EU water, waste and air-quality targets. Faster approvals could unlock part of that sum, but critics warn that loosening safeguards might also jeopardise access to NextGenerationEU funds, many of which come with strict environmental conditionality. In short, Portugal must walk a tightrope between competitiveness and compliance.

Will 2026 look different?

With a general election looming next autumn, both major parties have promised a “licensing shock” in their draft manifestos. Civil-service unions, however, insist that any timetable reform must be matched by higher headcounts and digital tools, otherwise delays will simply migrate from one desk to another. For factory managers in Aveiro, Braga or the Setúbal Peninsula, the litmus test is brutally simple: will they be pouring concrete this time next year? The answer, worth thousands of jobs and billions in exports, hinges on how quickly Portugal can transform a thicket of well-intentioned rules into a system that protects nature without suffocating growth.