Lisbon, June 26, 2025 (Lusa) - The Portuguese environmental association, Zero, on Thursday considered that the planned increase in VAT on air conditioning and solar panels is an "attack on climate policy" and that Portugal is moving in the opposite direction to the European Union (EU).
On the eve of World Refrigeration Day, Zero stresses that from July 1, Portugal will no longer apply the reduced VAT rate of 6% to equipment intended exclusively or mainly for the capture and use of solar energy (such as photovoltaic panels), wind, geothermal and other alternative forms of energy, such as heat pumps or air conditioning, and will now charge the standard rate of 23%.
In view of this planned increase, the environmental association “laments deeply the absence of a green tax system consistent with Portugal’s emission reduction and climate adaptation objectives, which means that the country is moving in the opposite direction to the European Union”.
For Zero, this VAT change “represents a significant tax setback, which could compromise the country’s efforts in the energy transition to support renewables and reduce greenhouse gas (GHG) emissions”, as well as going against the guarantee of “better and more efficient thermal comfort for families and ensuring a lower impact on public health in cases of heat waves and cold spells”.
“Instead of stepping up the implementation of efficient, low-emission solutions such as heat pumps, the country is seeing an increase in VAT on energy equipment and the absence of a coherent national plan, both at a technical level and in terms of affordable financing for households,” it criticises.
According to the association, this measure “threatens to discourage investment in technologies essential for the modernisation of air conditioning systems, making it difficult to meet national and European climate targets”.
Zero points out in a statement that in Portugal, the National Energy and Climate Plan (PNEC 2021–2030) includes targets for decarbonising the residential sector, highlighting heat pumps as an essential technology for electrifying heating and cooling, reducing the use of fossil fuels and increasing energy efficiency.
The environmental association also criticises the fact that air conditioning support programmes in Portugal “continue to show structural flaws that compromise the effectiveness of the energy transition”, one of the main obstacles being the lack of effective communication, especially with the most vulnerable groups, making it difficult to find out about and access the measures available.
Another “significant problem” it highlights is the relatively low amount of co-funding offered.
Zero stresses that, in addition to fiscal barriers and the fragility of financial support, Portugal also faces a significant shortage of qualified professionals in the field of sustainable air conditioning.
The shortage of technicians and electricians with specific training in the installation and maintenance of efficient and low-climate-impact systems compromises the implementation of the energy transition in the sector.
In view of this situation, Zero calls on political parties to “reverse the decision taken when approving the 2025 State Budget and, at the very least, to return this brutal and incongruous VAT increase to the current rate as of January 1, 2026”.
“It is essential to reverse the VAT increase on energy-efficient equipment and the commitment to renewable sources and to ensure adequate and accessible financial support for the renovation of buildings and the adoption of energy-efficient air conditioning technologies,” it argues.
Zero also calls on the Portuguese Environment Agency (APA) and the Climate Agency to lead the definition and implementation of a coherent and ambitious national strategy for greater sustainability in the Heating, Ventilation and Air Conditioning (HVAC) sector.
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