The pair were inseparable for much of the race as they tussled for control of the front alongside fellow Dutchwoman Lucinda Brand, who came third.
Alvarado had a slight gap coming into the final few corners after Van Empel and Brand came together slightly on a technical bend. But the world champion chased Alvarado down in the closing stages, accelerating out of her slipstream in the final one-hundred metres to win.
It was the third consecutive European Cyclocross Championships that Alvarado has come second to Van Empel.
"I'm actually really happy with this one. It was a really tough race and maybe the nicest battle this season yet," Van Empel said in a TV interview after the finish.
The 22-year-old, who was also a winner a the Koppenbergcross on Friday, was delighted with her win, but was focused on bigger things to come later in the season.
"For now, I have a little bit rest and some training. So I think I'll be back [racing] in two weeks and then the World Cups of course. We will see month per month how it goes," she said.
How it unfolded
It was a warm afternoon in Pontevedra, with some riders even taking to wearing cooling vests in the starting area before the elite women's race.
Throughout the weekend, the starts had been crucial across the other events. Frenchwoman Helene Clauzel took the bull by the horns by leading in the very early stages. World champion Fem van Empel was in 7th on the mid-part of the first lap, but made a decisive move on the course's only long straight and stamped her authority on the race, putting clean air between herself and the rest.
By the end of lap one, the pace of Van Empel had cut the leading group down to eight, including the likes of Lucinda Brand and Ceylin Alvarado.
The in-form Alvarado put the challenge to Van Empel in the second lap, making a close pass into a technical corner. The pair would continue to swap the leading position over the following laps, with the group stretched out but staying in touch.
On such a high-pace course, it was difficult for anyone to whittle down the leading group, with 13 riders within ten seconds of the lead with four laps to go.
Van Empel put down an acceleration over the barriers and created a small gap alongside Alvarado, Brand chased down the pair by herself, but her two team-mates led her by eight seconds with three laps left. The chasing group were 15 seconds down on the lead, a potentially decisive deficit on this course.
Brand made a massive effort to get back to Van Empel and Alvarado on lap five. The Dutch trio's tactical battle slowed them down on the penultimate lap and Sara Casasola was able to latch back on to the leaders heading into the finale.
Brand led in the early stages of the final lap with the others bunched behind. Alvarado accelerated on the long straight to take the lead into the decisive barriers and kept the pace high in an attempt to discourage attacks from behind. Brand and Alvarado challenged each other for the lead with Van Empel in the wheel and Casasola fading.
Alvarado stretched away in to the final sections as Van Empel and Brand came together on a corner. Van Empel chased down her compatriot and was able to catch her on the final corner.
Van Empel was just able to overhaul Alvarado in the final dash to the line to add the European title to the rainbow bands she took earlier in the year.
