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The present paper undertakes a thoroughgoing analysis of the application of the environmental tax benefits within the European Union and the Portuguese legal framework, with reference to its normative foundations, the mechanisms by which it is implemented, and the systemic challenges it faces. The paper begins with a comprehensive overview of the EU's fundamental regulations and policy directives relevant to environmental protection, sustainable development, and the incorporation of ecological objectives within tax systems, moving on to analyze the significance and constraints of tax benefits for environmental sustainability, with a specific focus on the Portuguese legal system. The analysis identifies key limitations and structural weaknesses that hinder effectiveness in this context, including concerns about the actual application of the polluter-pays principle, the possible existence of regressive incentives, and the potential reduction or delay of direct environmental impact of these measures. The discussion concludes with recommendations to enhance the environmental, social and policy coherence of Portuguese environmental tax benefits, as well as outlining potential avenues for future research.