This city facing the sea has been shaped by its waters for centuries. The Port of Leixões is now one of the nation’s two largest seaports, and the city surrounding it grew through trade-dependent industries from petrochemicals and food processing to logistics and heavy manufacturing. With 172,000 residents, it has become one of the most densely populated and urbanized municipalities in Portugal.
It is also a city seeking to navigate industrial change and the rise of the digital knowledge economy. That change was signaled dramatically in 2021 when the closure of the Galp oil refinery put 400 employees out of work and impacted up to 1,600 indirect jobs. In comparison to the working age population, it was a rounding error. But the refinery, in operation for half a century, was one of the largest single employers in Matsohinos, and its demise became a call to action. The city responded with programs and projects to spur innovation and speed adaptation while ensuring that no one is left behind.
A Just Transition
Immediately following the closure of the refinery, the city enlisted national and regional funding to create a Just Transition office, which began providing social and psychological support to the newly unemployed and programs to help them re-qualify for other careers. Former oil workers are training to become electricians, metalworkers, train operator, and renewable energy installers, and a million-Euro program offers to close any gap between their previous wages and their new ones for up to 24 months.
An entrepreneurship fund provides financing for business expansion to companies disrupted by the closure. A portion of the refinery site has been ceded to the University of Porto for a new technology campus, where the first building is being funded by the Just Transition office. None of this is a panacea for the dispossessed. But meaningful public support is helping to turn economic trauma into workforce reinvention.
From Industrial to Digital
The city’s leaders know that, where the Galp refinery led, Matsohinos’ industrial base could follow. In response, they are preparing their people in multiple ways for a future of digitalization and economic diversification. MOVES-IT is an EU-funded project to digitize public services, combat inequalities and harness the city’s creative industries in reinvention – all while aiming for an 85% reduction in Co2 by 2030. It is made of three initiatives, of which the first is pushing digital technology and training to the city’s households. The goal is not just digital inclusion but offering residents the chance for informed, empowered participation in civic life as an inducement to gain digital skills.
The second initiative ties to the first. It installs environmental sensors across the municipality, feeding into a data hub available to citizens participating in a Digital Neighborhood Competition, which offers a gamified approach to collaborative planning of improvements to the local environment. To spur their creativity, the third initiative involves local creatives in designing solutions in collaboration with the community, universities and the city.
A participatory budgeting platform extends the engagement, giving residents visibility into how the city spends public money and a binding say in how some of it is spent. Participation is multi-faceted: through an online platform, by SMS and at in-person meetings. Neighborhood-level Citizens Councils propose and debate ideas, the municipality assesses their feasibility and the public votes. The top four winning projects receive up to 50,000 Euros each, which led public participation to jump by a factor of seven in its first two years.
Reviving a Wasteland
The River Leça, which flows into the sea at Matsohinos, was for decades considered one of Europe’s most polluted rivers. It is now the scene of a massive restoration project that has installed environmental monitors from the river’s source to its mouth. Within Matsohinos, former dumping grounds have become 18 km of pedestrian and cycling paths along the riverbanks, where newly constructed bridges and nearby Metro lines make it a commuting alternative. The resulting linear park is reconnecting neighborhoods that had been isolated from each other for a generation.
Sustainability is also birthing a new industrial paradigm for Matsohinos. The ReCircular Lab is Portugal’s first center dedicated to urban waste re-use. In a facility constructed using innovative 3D printing and incorporating materials generated from waste, the Lab recycles e-waste, furniture, textiles and toys, which are channeled through the municipality’s social services. A ReCircular digital platform enables residents to list items for free exchange and local restaurants and food retailers to donate surplus food. An integrated training program for the long-term unemployed and at-risk youth develops skills in repair and upcycling.
The digital revolution – now undergoing vast acceleration from AI – will continue to challenge the city’s employers and people. It will demand flexibility, adaptability, new skills and a helping hand from city government. But the workforce the city is building already has opportunities for growth. Its Lionesa Business Hub is already a a dynamic technology and innovation campus, home to over 7,000 professionals working for more than 120 companies, including Oracle, Farfetech, Vestas, FedEx and Volkswagen. The fintech and digital banking company Revolut has its Portuguese HQ in the city, while CEiiA, a nationally recognized engineering and mobility R&D center, is headquartered there. These are milestones every bit as significant as the closing of the Galp refinery – but pointing to a very different future.
Population: 172,000
Website: www.cm-matsohinos.pt
Smart21 2026