Luxembourg Cabinet Adopts Climate Roadmap

The Luxembourg Cabinet today adopted a climate roadmap, entitled "Generatioun Klima - Ambitiéis - innovativ - sozial gerecht" ("climate generation - ambitious - innovate - socially just"), composed of measures aimed at facilitating the energy and ecological transition.

Following the adoption of the broad outlines of its climate policy on 6 December 2019, the government has drawn up a more complete document in accordance with the EU Regulation on the Governance of the Energy Union and Climate Action. Under this regulation, all member states are required to develop an Integrated National Energy and Climate Plan (NECP) for the period from 2021 to 2030.

In just over 200 pages, Luxembourg's NECP constitutes a political roadmap and a new planning and monitoring instrument in terms of climate policy in the framework of the implementation of the EU's 2030 goals in terms of renewable energy and energy efficiency. The plan will be implemented through a multitude of measures that are being developed for adoption in the form of laws, regulations or programmes.

The aim of the climate plan is to further accelerate the energy transition which has already begun. Indeed, the climate and energy policy is essentially based on improving energy efficiency, promoting renewable energies as well as promoting more sustainable public and individual mobility. With this plan, bringing together a whole panoply of climate innovations, Luxembourg wants to become a pioneer country in the implementation of “climate solutions”.

This draft plan will be subject to public consultation from 12 February until 29 March 2020 inclusive.

National objectives

In order to combat the climate crisis at the national level, Luxembourg has committed itself to reducing greenhouse gas emissions from all sectors outside the emission trading scheme by 55% by 2030 (compared to the reference year of 2005). These are considered essential to achieve climate neutrality by 2050 at the latest. Moreover, Luxembourg has set itself the objective of increasing its share of renewable energy from 11% in 2020 to 25% by 2030 and aims to reduce final energy demand by 40% to 44% by 2030 compared to the European benchmark.

One of the new measures will be the introduction of a “minimum carbon price”, in accordance with the “polluter pays” principle. The future tax reform will make it possible to introduce a minimum price for carbon emissions, which will be constantly adapted to the objectives of the Paris agreement. The starting price will be set based on the average value of carbon pricing in neighbouring countries. Therefore, for the year 2021, the carbon price will be around €20 per tonne of CO2. A respective increase of €5 per tonne is planned for 2022 and 2023.  The revenue from this measure will be shared equitably between concrete measures to combat climate change and social measures (such as tax credit) with a view to reducing social charges for low-income households.