The recommendation is aimed primarily at low-income households, with a view to reducing emissions in a transport sector that remains heavily reliant on oil.

Review of Portugal’s energy policy

The proposal is included in the Review of Portugal’s Energy Policy 2026, presented in Lisbon, a document that forms part of the IEA’s regular cycle of analyses of member countries’ energy and climate policies and sets out 10 measures for Portugal.

In the case of transport, it identifies as priorities support for used electric vehicles, the expansion of the urban charging network and new measures to increase modal shift.

Transport

According to the report, transport is the main source of energy-related greenhouse gas emissions in Portugal, accounting for 54% in 2024, whilst oil accounted for 92% of the sector’s total final energy consumption.

The IEA notes that the uptake of electric vehicles is “rapidly expanding” in Portugal, thanks to a favourable tax regime and a well-developed charging network along the main transport corridors.

Rapid expansion

In 2025, electric vehicles accounted for 38% of new vehicle registrations, a rate higher than the European Union average.

However, the IEA stresses that “major challenges” remain, as road transport continues to dominate and the Portuguese vehicle fleet is “quite ageing and inefficient”.

Despite the growth in sales, the proportion of electric vehicles in the total fleet amounted to only around 6%, it explains.

Against this backdrop, the IEA considers that electric vehicle policy should better reflect consumers’ “limited purchasing power” and the structure of the car market in Portugal, where used vehicles account for around 80% of sales.

Subsidy for the purchase of electric vehicles

“The introduction of a subsidy for the purchase of used electric vehicles aimed at low-income households would help reduce the average age of the vehicle fleet and emissions,” the document states.

The agency argues that the priority beneficiaries of this support should include professional drivers and small and medium-sized enterprises, “to ensure that scarce public resources reach those who most need financial support and whose potential for reducing emissions is greatest”.

Expansion of charging infrastructure

Regarding charging, it recommends that infrastructure expansion should prioritise low-voltage charging points in urban areas, where many households park on the street and cannot install private chargers.

According to the report, this expansion should also pay “special attention” to low-income households, whilst installing charging points in car parks adjacent to public transport hubs could improve integration between public transport and electric vehicles.

Reducing oil consumption

The agency, however, considers that reducing oil consumption and emissions should not depend solely on technological replacement of the vehicle fleet.

“The most sustainable way for Portugal to reduce oil consumption and emissions is through a modal shift from private cars to public transport, rail, walking and cycling,” it notes.

Modal shift

According to the report, this modal shift structurally reduces energy demand, unlike technological replacement within the vehicle fleet, thereby lowering oil consumption and the need for substantial investment in modernising the electricity grid.

The agency also argues that Portugal must do more to shift freight transport away from diesel lorries and toward the “highly electrified” rail network.

The report considers that modal shift should remain a “central pillar” of transport policy and that urban and regional planning should ensure equitable access to active mobility, reliable and affordable public transport, and the national high-speed network.