Ramalina nematodes is a rock-dwelling species that is narrowly endemic to Porto Santo in the Madeira archipelago where it occurs at twelve locations where it is abundant (Sparrius et al. 2017). Threats from trampling or wildfire could rapidly impact the population, but are unlikely to rapidly lead to the species' global extinction (or its listing as Critically Endangered), but could cause it to become threatened. Thus, with its very restricted area of occupancy, it is therefore precautionarily listed as Near Threatened under criterion D2.

This species is found only on the small island of Porto Santo in the Madeira archipelago, growing abundantly on volcanic rock at the highest peaks, above 300m. However, owing to the small size of the island and limited available high elevation habitat, it is known from only 12 locations with an estimated area of occupancy of 28 km².

The species is restricted to 12 locations. The population size is estimated at 100,000–1,000,000 mature individuals (size > 2 cm) representing reproductively mature individuals at each site where they have been observed during a complete survey from 2016. The numbers are corrected for suitable habitat that could not be reached or visited during the survey (Sparrius et al. 2017).

It is saxicolous, growing on basalt volcanic rockfaces at higher elevations. It avoids calcareous rocks, which occur mainly at lower elevation and along the coast and is found growing together with other endemic macrolichens, such as Anzia centrifuga, Ramalina erosa, R. confertula, R. jamesii and R. timdaliana.

This species occurs only on one small island. It could be threatened by extinction from wildfire, trampling (rock climbing, tourism) if development of tourism occurred in the vicinity of the locations. The past impact of these threats has not been documented. Most sites are at quiet places at higher elevation and at some distance from paths and roads.

The sites are partially within the Natura 2000 site Pico Branco. The species grows at higher elevations and sites can only be reached by hiking trails. The geology limits development of infrastructure. The rocky cliffs are sparsely vegetated, making them less susceptible to changes in grazing regime and fires.