The European Commission is referring Portugal to the European Court of Justice again for inadequate wastewater treatment.
In 2009, the Court ruled the nation was failing to collect, treat and dispose of wastewater “in an adequate manner”.
The Commission said two cities and town areas “still fail to comply with EU standards”, putting citizens’ health and the environment at risk.
Untreated wastewater contains nutrients such as nitrogen and phosphorous which can damage the marine environment, it added.
The Commission is also urging the Court to impose a €4.5 million (£3.6m) fine and a daily penalty of more than €20,000 (£15,917) until the obligations are fulfilled.