LUXEMBOURG’S INTEGRATED NATIONAL ENERGY AND
CLIMATE PLAN FOR 2021-2030
In accordance with REGULATION (EU) 2018/1999 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 11 December 2018
on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and
(EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC,
2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of
the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU)
No 525/2013 of the European Parliament and of the Council
Final version
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Table of contents
1. Overview and process for establishing the plan 7
1.1. Summary 7
1.2. Overview of current policy situation 14
1.3. Consultations and involvement of national and Union entities and their outcome 18
1.4. Regional cooperation in preparing the plan 23
2. National objectives and targets 31
2.1. Decarbonisation dimension 32
2.1.1. Greenhouse gas emissions and removals 32
2.1.2. Renewable energy 32
2.2. Energy efficiency dimension 37
2.3. Energy security dimension 45
2.4. Internal energy market dimension 47
2.4.1. Electricity interconnectivity 47
2.4.2. Energy transmission infrastructure 47
2.4.3. Market integration 48
2.4.4. Energy poverty 49
2.5. Research, innovation and competitiveness dimension 51
3. Policies and measures 54
3.1. Decarbonisation dimension 54
3.1.1. Greenhouse gas emissions and removals 54
3.1.2. Renewable energyn 82
3.1.3. Other elements of the dimension 93
3.2. ‘Energy efficiency’ dimension 100
3.3. ‘Energy security’ dimension 111
3.4. ‘Internal energy market’ dimension 116
3.4.1. Electricity infrastructure 116
3.4.2. Energy transmission infrastructure 118
3.4.3. Market integration 118
3.4.4. Energy poverty 122
3.5. ‘Research, innovation and competitiveness’ dimension 124
4. Current situation and projections with existing policies and measures 131
4.1. Projected evolution of main exogenous factors influencing energy system and GHG emission
developments 132
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4.2. ‘Decarbonisation’ dimension 135
4.2.1. GHG emissions and removals 135
4.2.2. Renewable energy 137
4.3. ‘Energy efficiency’ dimension 140
4.4. ‘Energy security’ dimension 151
4.4.1. Analysis – electricity sector 151
4.4.2. Analysis – gas sector 153
4.5. ‘Internal energy market’ dimension 156
4.5.1. Electricity interconnectivity 156
4.5.2. Energy transmission infrastructure 157
4.5.3. Electricity and gas markets, energy prices 159
4.6. ‘Research, innovation and competitiveness’ dimension 161
5. Impact assessment of planned policies and measures 164
5.1. Impacts of the planned policies and measures described in Section 3 on the energy system and
greenhouse gas emissions and removals 165
5.1.1. GHG emissions and removals 165
5.1.2. Energy demand 167
5.1.3. Renewable energy 174
5.2. Impacts of the planned policies and measures described in Section 3 on the economy, employment
and social conditions, environment and health 178
5.2.1. Estimation of macroeconomic consequences 178
5.2.2. Environmental/health impact 183
5.3. Overview of investment needs 185
5.3.1. Investments in energy efficiency 185
5.3.2. Investment and support requirements for renewable energy 187
5.3.3. Impact on network costs in the distribution network 188
5.4. Impacts of the planned policies and measures described in Section 3 on other Member States and
regional cooperation 190
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List of tables and figures
Figures
Figure 1: Annual final energy savings in GWh in private households, the trade, commerce and services
sector, industry and the transport sector in Luxembourg (based on an energy efficiency target of 44%) ..... 39
Figure 2: Cumulative final energy savings over the period 2021 to 2030 in GWh in private households,
the trade, commerce and services sector, industry and the transport sector in Luxembourg (based on an
energy efficiency target of 44%).................................................................................................................. 40
Figure 3: Annual final energy savings in GWh from the renovation of all residential and non-residential
buildings in Luxembourg (based on an energy efficiency target of 44%) .................................................... 41
Figure 4: Cumulative final energy savings over the period 2021 to 2030 in GWh from the renovation of all
residential and non-residential buildings in Luxembourg (based on an energy efficiency target of 44%) ...... 42
Figure 5: Annual final energy savings in GWh from the renovation of public buildings in Luxembourg
(based on an energy efficiency target of 44%) ............................................................................................ 42
Figure 6: Cumulative final energy savings over the period 2021 to 2030 in GWh from the renovation of
public buildings in Luxembourg (based on an energy efficiency target of 44%) ......................................... 43
Figure 7: Luxembourg’s final energy demand in 2016, broken down by industrial; household; trade,
commerce and services; transport and agricultural sectors ..................................................................... 141
Figure 8: Final energy demand in Luxembourg in 2016, broken down by energy source ......................... 141
Figure 9: Electricity and fuel required by industry (ETS sector only) in the period from 2015 to 2040 in the
event of the reference scenario ................................................................................................................ 145
Figure 10: Sectoral development of the fuel required for heat generation by households; trade,
commerce and services, and industry (without ETS share) in the period from 2015 to 2040 in the event of
the reference scenario .............................................................................................................................. 146
Figure 11: Development of the final energy demand (broken down by energy source) of the transport
sector in the period from 2015 to 2040 in the event of the reference scenario ....................................... 147
Figure 12: Development of electricity demand (final energy demand and primary energy demand) for the
period from 2015 to 2040 in the event of the reference scenario ............................................................ 149
Figure 13: Sectoral breakdown of the electricity demand for the period from 2015 to 2040 in the event of
the reference scenario .............................................................................................................................. 150
Figure 14: Cartographic representation of Luxembourg’s supply situation .............................................. 158
Figure 15: Electricity price components for household customers ........................................................... 162
Figure 16: Gas price components for household customers ..................................................................... 163
Figure 17: Development of final energy demand in the period 2020 to 2040 in the case of the target
scenario, broken down by sector .............................................................................................................. 168
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Figure 18: Sectoral breakdown of the electricity demand for the period from 2015 to 2040 according
to the target scenario ................................................................................................................................ 169
Figure 19: Reduction in final energy demand (fuels, electricity) within the target scenario broken
down by sector for the period 2020 to 2040 ............................................................................................ 170
Figure 20: Absolute change in key macroeconomic indicators when compared with the reference in
€million
2016
(source: Fraunhofer ISI) .......................................................................................................... 179
Figure 21: Investments to increase energy efficiency in the period 2020 to 2040, broken down by sector ... 185
Figure 22: Investments in e-mobility charging infrastructure in the period 2020 to 2040 in euro .... 186
Tables
Table 1: Sectoral shares of renewable energy in Luxembourg up to 2040 according to the target
scenario with the upper range value of 25% (in 2030). ............................................................................... 33
Table 2: Technology-specific energy generation from renewable energy in Luxembourg up to 2040
according to the target scenario with the upper range value of 25% (in 2030). ......................................... 34
Table 3: Key target figures of the target scenario in the area of energy efficiency based on the upper
range value of 44% ...................................................................................................................................... 38
Table 4: Population growth and gross domestic product .......................................................................... 132
Table 5: Assumptions on energy price trends ........................................................................................... 133
Table 6: Assumptions on cost developments for renewable energy technologies ................................... 134
Table 7: Greenhouse gas emissions by sector for 2005 to 2017, in kt CO2eq ........................................... 135
Table 8: Greenhouse gas emissions by ETS and non-ETS for 2005 to 2017, in kt CO
2
eq ........................... 136
Table 9: Greenhouse gas emissions by ETS and non-ETS for 2020 to 2040, in the event of the reference
scenario (without additional measures), in kt CO
2
eq ................................................................................ 136
Table 10: Sectoral shares of renewable energy in Luxembourg by 2040 according to the reference
scenario ..................................................................................................................................................... 138
Table 11: Technology-specific energy production from renewable energy in Luxembourg by 2040
according to the reference scenario ......................................................................................................... 139
Table 12: Additional potential for the cogeneration of heat in industry by 2030 based on final energy use
in industry.................................................................................................................................................. 143
Table 13: Primary energy factors used for the various energy sources in the period from 2015 to 2040 ... 148
Table 14: Gross energy production in Luxembourg by 2040................................................................. 151
Table 15: Electricity import dependency of Luxembourg .......................................................................... 152
Table 16: Gas import dependency of Luxembourg ................................................................................... 154
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Table 17: Luxembourg’s interconnection level.......................................................................................... 157
Table 18: Existing and future capacities of the network interconnection points. ..................................... 159
Table 19: Development of electricity and gas prices for end consumers. ................................................. 160
Table 20: Greenhouse gas emissions by ETS and non-ETS for 2020 to 2040, in the event of the target
scenario (with additional measures), in kt CO2eq ..................................................................................... 166
Table 21: Comparison of the greenhouse gas emissions projections of the target scenario (with additional
measures) with the reference scenario (without additional measures) for the years 2020 to 2040 ........ 167
Table 22: Comparison of Luxembourg’s final energy demand between the reference scenario and the
target scenario .......................................................................................................................................... 172
Table 23: Comparison of the development of Luxembourg’s heat and electricity demand in the case of
the reference and target scenarios ........................................................................................................... 174
Table 24: Comparison of the expansion of renewable energy (energy production and shares of
(sectoral) demand) between the reference scenario and the target scenario .......................................... 177
Table 25: Change of key macroeconomic indicators when compared with the reference (source:
Fraunhofer ISI) ........................................................................................................................................... 180
Table 26: Investment and support requirements for renewable energy – a comparison between the
reference and target scenarios ................................................................................................................. 188
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1.
Overview and process for establishing the plan
1.1.
Summary
The integrated national energy and climate plan is a new planning and monitoring tool for the EU and its
Member States. It aims to improve the coordination of European energy and climate policies and is the key
instrument for achieving the EU 2030 targets on climate action, renewable energy and energy efficiency. It
is based on Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action
(Governance Regulation). It requires each EU Member State to draw up an integrated national energy and
climate plan for the period from 2021 to 2030.
The Paris Agreement, which was unanimously adopted on 12 December 2015, established a new basis for
global climate action. At the centre of the Paris Agreement is the target of limiting global warming to well
below 2 degrees Celsius compared to pre-industrial levels and pursuing efforts to limit it to 1.5 degrees
Celsius. There is broad scientific and political consensus that current contributions, including those of the
European Union, are insufficient and many signs indicate accelerated and irreversible global warming. The
IPCC Special Report on the consequences of global warming of 1.5 degrees Celsius shows the scale of the
challenge and the urgency to act.
The IPCC Special Report has led the European Commission to upwardly revise the EU’s climate target for
2030. The new President of the European Commission, Ursula von der Leyen, has called for a 50-55%
reduction target by 2030, and Vice-President Frans Timmermans, Commissioner for Climate Action and
European Green Deal, will soon be presenting a climate law with new measures. The European Investment
Bank is also currently being transformed into a climate bank. Luxembourg will continue to encourage the
European Commission to introduce a credible and comprehensive strategy for a ‘net zero emissions’
Europe by no later than 2050 and will also continue to advocate a policy of not promoting nuclear power,
coal, fracking, or the capture and storage of carbon dioxide
1
. The government’s target of a 55% reduction
in greenhouse gases by 2030 is in line with the high ambitions of Luxembourg.
The Luxembourg Government considers that nuclear power is not one of the possible solutions for reducing
greenhouse gas emissions due to its multiple risks, and it therefore strongly advocates a policy of not
promoting nuclear power. There is support at European level for efforts to phase out nuclear power and
for a fundamental reform of the Euratom Treaty, in particular with a view to abolishing public subsidies for
nuclear power once and for all and making nuclear power operators liable for the full risk. In all relevant
international forums, initiatives will be supported to ensure that extending the life of nuclear power plants
1
This policy of non-promotion does not cover carbon sequestration in forest and agricultural sinks.
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is subject to the same safety and environmental impact assessments as new projects. The Luxembourg
Government will also work at both European and national level to ensure that nuclear energy is excluded
from future investments that are classified as sustainable, and welcomes the decision at EU level to exclude
nuclear power from ‘green finance’ (the Directive on financial taxonomy).
It is clear that facing and overcoming the challenges identified in the Paris Climate Agreement will require
a huge amount of investment. In order to achieve the goals of the Paris Agreement, Europe needs
additional investment of around €260 billion per year over the next decade alone
2
.
These investments can be financed by green bonds, inter alia. In 2007, the Luxembourg Stock Exchange
listed the first green bond ever issued. Since then, it has been a leader in this class of investment. Now,
more than 160 green bonds are listed. The issuers range from states, development agencies and banks to
financial institutions and companies.
The major challenge for energy policy will be to phase out fossil fuels such as coal, oil and gas much faster
than has so far been the case. Energy efficiency is a priority for policy implementation, based on the ‘energy
efficiency first’ principle, followed by increased and consistent development of renewable energy and
mobility that reduces dependence on cars and trucks and converts the remaining cars and trucks to electric
or hydrogen propulsion.
Against this background, as part of the 2018-2023 coalition agreement, the current government has decided ‘… to
do its utmost to comply with this [Paris] agreement and to take into account the findings of the Intergovernmental
Panel on Climate Change (IPCC) Special Report on global warming of 1.5 degrees Celsius.’ The integrated national
energy and climate plan defines the framework for Luxembourg’s energy and climate policy up to 2030.
The energy transition has already been addressed in Luxembourg in recent years and is part of the Third
Industrial Revolution process, which was initiated in 2015 and the cornerstones of which involve energy
efficiency in new buildings, developing renewable energy on a large scale and incorporating it into the
energy network, developing decentralised energy storage, digitalising the energy networks and using more
sustainable means of transport. The Luxembourg Government intends to further speed up the energy
transition that has already been set in motion. Its climate and energy policies are essentially based on
improving energy efficiency, promoting renewable energy and promoting more sustainable public and
individual mobility. Luxembourg wants to be actively involved in the European energy transition and to
become a country of climate solutions.
2
Information provided by the European Commission.
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The present plan offers new chances to strengthen the connection between energy and climate policies,
on the one hand, and the scientific development of Luxembourg, on the other. The aim will in fact be to
ensure the intelligent and sustainable development of the country in line with the conclusions of the
strategic study on the Third Industrial Revolution, in particular in the areas of environmental technologies,
mobility, climate action and digitalisation. Against this background, it is also important to intensify research
and development in the areas mentioned, in order to bring about and develop modern, industrial activity
in Luxembourg. The integrated national energy and climate plan will thus also have the potential to
establish Luxembourg as a hub for climate-friendly start-ups and businesses. In addition to new
instruments, the plan will also help to create the credibility needed to make Luxembourg a world leader in
offering investment funds in the fields of energy efficiency and renewable energy and in climate financing.
The two tables below present the central objectives, policies and measures of Luxembourg’s national
energy and climate plan. The IPCC’s recent reports point to the need to halve global greenhouse gases by
2030 in order to achieve the goals of the Paris Climate Agreement. The Paris Agreement also states that,
due to historically high emissions of greenhouse gases, developed countries have a particular responsibility
in this respect. This also applies to the EU and Luxembourg. With regard to compatibility with the goals of
the Paris Climate Agreement, the Luxembourg government has decided at national level to reduce
greenhouse gas emissions for sectors outside the EU emissions trading scheme by 55% by 2030 compared
to the reference year 2005. The government has also decided to set an energy efficiency target of 40-44%
by 2030 and to increase the share of renewable energy to 25% by 2030.
Dimension
Central objectives
GHG emissions
National climate target: -55% by 2030, compared to 2005
Renewable energy
25% share of renewable energy in the gross final energy consumption in
2030 by consistently developing wind and solar energy and heat pumps in
Luxembourg
Cooperating with other EU Member States
Energy efficiency
Energy efficiency target of 40-44% by 2030 (compared to the EU PRIMES
model (2007))
New fossil-free single-purpose and residential buildings
High rate of renovation and highly efficient building renovations
Developing renewable heating networks
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Preventing traffic through massive expansion of public transport and 49%
share of electromobility by 2030
Developing a large energy efficiency market for industry, SMEs and office
buildings
Energy security
Reducing dependence on electricity imports by expanding renewable energy
Exploiting the potential for flexibility by developing an energy data hub
Further intensifying regional cooperation in the field of security of
electricity and gas supply
Internal energy market
Gas sector:
No further development of national gas infrastructure, either at
transmission or distribution level
Further expansion of the cross-border connections is not needed at present
Consolidating the common gas market with Belgium
Electricity sector:
Upgrading grids to meet the needs of existing routes
Combining the sectors of electricity, heat and transport by means of sector
coupling
Research, innovation
and competitiveness
Luxembourg to become a pioneer in the successful implementation of a
nationwide energy transition with the main pillars ‘zero carbon’,
‘circularity’, ‘renewable energy’ and ‘energy efficient buildings’ with
flexibility options/storage capacity as well as sustainable mobility
components and a grid and information flow enabling this
Luxembourg to promote resilient urban and spatial development,
transition processes and social innovation, in conjunction with
urban/spatial planning and positive lifestyle changes
Luxembourg to become an attractive location for climate solutions
providers and start-ups, with an attractive testing and experimentation
environment for the (further) development of their products
Luxembourg’s financial centre to switch 20% of all cash flows to green
finance by 2025 and become a globally recognised financial centre for
investments in energy efficiency, renewable energy, electro- and
hydrogen mobility
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Central policies and measures
Introducing a climate framework law
Further developing the climate pact with the municipalities
Introducing a minimum price for CO
2
and adjusting the taxation of
mineral oil products
Strengthening financing measures, targeted climate incentive
programmes, including the climate and energy fund, environmental
fund, the PRIMe House climate loan support scheme, climate loans, the
‘clever fueren [drive smart]’ support scheme
Implementing and further developing the strategy for sustainable mobility
Reforming car tax and company car taxation
Fuel oil phasing-out programme
Solar offensive:
• pursuing calls for tenders for large photovoltaic systems
• adapting and expanding the support schemes
• strengthening internal consumption in the electricity sector
Wind energy development with a small number of large wind
installations
Creating a solar and thermal land register
Biomass in the context of sustainable wood availability in the wider region
Targeted expansion of renewable heat (heat pumps, deep geothermal
energy, renewable heating networks from waste heat)
Electromobility, second-generation biofuels, green hydrogen
Transnational joint projects, for example through joint tenders for
photovoltaic and wind capacity with neighbouring countries, and active
participation in the new EU Renewable Finance Platform
Cooperating with other EU Member States
Low-energy and energy-plus buildings by law for residential and single-
purpose buildings
Ambitious renovation of existing housing stock (3% renovation rate at
72% renovation depth on average)
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Developing a large energy efficiency investment market for industry,
SMEs and large office buildings (by combining audits including an audit
transparency platform, a specific energy efficiency financing fund (de-
risking), strengthening the voluntary agreement with industry and
expanding it to SMEs, continuing and extending the energy efficiency
obligation (EEO) for all sellers of energy)
Increasing energy efficiency in transport through traffic avoidance,
massive expansion of public transport and the rapid development of
electromobility in cars and vans (premiums, establishing a nationwide
fast charging network)
Reducing the sale of diesel to transiting HGVs
State and municipalities to play an exemplary role, including in their
buildings and lighting (Luxembourg LED 2025 programme)
Large-scale training programme for tradespeople and engineers/architects
Strengthening regional cooperation
Network expansion measures at transmission level on existing routes
Reducing dependence on imported oil by preventing traffic and
expanding public transport and electromobility
National strategic framework for market development in the transport
sector and for developing the corresponding infrastructure (e.g.
nationwide fast charging network)
Expanding electricity transmission capacity on existing routes
Smart management at all voltage levels by building an energy data hub
No further measures for extending gas infrastructure: the existing gas
infrastructure is of a sufficient size
Active support for gas distribution companies in setting up green gas
infrastructure (collection of biogas from decentralised biogas plants,
biogas and sewage sludge washing plants)
Establishing a new research infrastructure involving all relevant research
and innovation stakeholders
Continuously increasing investment in research and development in the
energy sector
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Increasing existing efforts and skills at the national research institutes
Luxembourg as an international hub for climate solutions
The success of this plan depends fundamentally on its acceptance by large parts of the population. The
social justice of the various measures of the plan is therefore one of the government’s central concerns.
This plan contains far-reaching measures to tackle the energy poverty of today and prevent it from
occurring in the future. Through targeted and socially differentiated support and compensation, this plan
will make it possible to become a tool for both climate and social progress.
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1.2.
Overview of current policy situation
When devising the energy and climate policies, a few specific details of Luxembourg’s situation and the
energy consumption pattern need to be taken into account. First of all, Luxembourg is characterised by a
highly dynamic demographic development of the population. In the last ten years, for instance, the
population has increased from 493,500 residents in 2009 to 613,900 residents in 2019. In addition, the very
open Luxembourg economy is characterised by dynamic development, reflected in an average annual
growth rate of more than 2.5% in the last five years. A further atypical situation compared to its
neighbouring countries is the high fuel consumption, which constitutes approximately two-thirds of the
entire national final energy consumption. This is largely due to Luxembourg’s central position in Europe
and to the low price level of fuel compared to the neighbouring countries. Moreover, Luxembourg does
not have any large power plants, meaning that, in addition to its own electricity production, it relies mainly
on imports (85%), which are not accounted for on the CO
2
balance sheet. This pattern is also reflected in a
relatively low consumption of electricity in Luxembourg, at just under 15%. It should also be taken into
account that the pattern of industrial energy consumption is likewise considered atypical. For example, the
share of electricity consumption in the steel industry alone amounts to about 40% of national electricity
consumption. Some of the factors mentioned above have thus become significant drivers of energy
consumption in recent years, and will remain so in the future.
It is also important to consider that Luxembourg is characterised by a high level of energy dependency. In
fact, Luxembourg is one of the few countries in the European Union that does not have any naturally
occurring fossil resources and therefore has to import all of the energy it needs, whether oil or natural gas.
Luxembourg also does not have any sea ports, any refining capacity, any gas reservoirs due to the lack of
suitable geology, and limited storage capacity for oil products.
Luxembourg thus has only limited opportunities to influence the overarching security of supply using
national measures. In order to ensure its security of supply, Luxembourg, in close cooperation with
neighbouring countries, has in the past relied on the diversification of sources and routes of supply in the
framework of the Pentalateral Energy Forum (DE, FR, BE, NL, LU, AT, CH).
Luxembourg has always been a proponent of a well-functioning and competitive internal energy market
and advocates European approaches to energy infrastructure. These approaches are fully in line with the
principles of the European Energy Union.
In recent years, Luxembourg has made considerable progress in energy efficiency, renewable energy and
climate action, and the digitalisation of the energy transition. These areas will be addressed briefly below.
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Energy efficiency
Between 2008 and 2014, Luxembourg adopted three national energy efficiency action plans and
implemented the measures contained therein. The current, fourth, National Energy Efficiency Action Plan
was adopted by the government in 2017. It contains a large number of measures that are currently being
implemented.
In the field of new buildings, Luxembourg has continually tightened its energy efficiency requirements over
the last ten years and is playing a leading role in Europe. The nearly zero-energy building standard
applicable in the field of energy classes has been compulsory for every newly constructed residential
building since the start of 2017, and corresponds approximately to the internationally recognised
Passivhaus Standard [passive-house standard]. These nearly zero-energy buildings are generally identified
as AAA buildings in the national certification of energy performance certificates.
In 2014, Luxembourg presented its national building renovation strategy, which was praised by the
European Commission in particular for its detailed overview of the building stock and for the national
information and training programmes. In view of the significant potential for energy savings in existing
buildings, the implementation of a national initiative for energy renovation was announced as part of the
building renovation strategy. An extension of the building renovation strategy was developed in
cooperation with the relevant players in the construction sector. This extension outlined guidelines for
further-reaching strategic approaches and contains an action plan based on the currently existing obstacles.
The strategic approaches and measures are currently being put into practice.
A series of instruments has also been developed and introduced to support the energy renovation of
buildings. These instruments include investment aid for private households (via the PRIMe House support
scheme) and municipalities (via the environmental fund) and the launch of a climate bank that offers
reduced-interest loans for energy renovation. In order to lend fresh impetus to energy efficiency, in 2015
Luxembourg introduced a mechanism obliging natural gas and electricity suppliers to make concrete energy
savings each year by implementing energy efficiency measures in sectors of their choosing.
In the industrial sector, the voluntary agreement between the government and industry was reformed in
order to focus on increasing energy efficiency by means of binding targets. The investment aid schemes for
companies in order to improve energy efficiency and promote renewable energy have also been reformed.
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Renewable energy
In the field of renewable energy, Directive 2009/28/EC of 23 April 2009 on the promotion of the use of
energy from renewable sources sets a target for Luxembourg of 11% renewable energy in the final energy
consumption in 2020. Each Member State will also ensure that the share of energy from renewable sources
in all forms of transport in 2020 is at least 10% of its final consumption of energy in transport.
Luxembourg is well on track to meet its targets for 2020. The share of renewable energy in the final energy
consumption reached 6.38% in 2017, compared with 5.44% in 2016, 5.04% in 2015 and 4.51% in 2014. In
order to be able to respect the indicative trajectory set out in Directive 2009/28/EC, Luxembourg must
achieve an average share of 7.47% renewable energy in 2017 and 2018.
In the field of new residential buildings, an implicit requirement for the use of renewable energy was
introduced by the Regulation on the energy efficiency of residential buildings. The regulations on feed-in
tariffs have been systematically adjusted in recent years to create interesting investment incentives,
particularly in the areas of biomass, wind and photovoltaics, as well as for photovoltaics cooperatives. In
addition, the feed-in tariffs for photovoltaics were increased in 2019 and a first national competitive
procedure for photovoltaic systems on buildings or industrial or landfill sites was organised in 2018. A
second invitation to tender was issued in autumn 2019. These measures have triggered a huge wave of
investment and could swiftly increase solar production from the current 130 MW to over 200 MW.
Finally, it should also be mentioned that the biofuel blending rate has been set at 5.85% for 2019 and 7.7%
for 2020. In 2019, the minimum rate for biofuels made from non-food waste, residues and cellulosic
materials covered by the ‘double counting’ principle was set at 35% and in 2020 was even increased to 50%
(after double counting). In addition, the government programme stipulated that the use of first-generation
biofuels should be limited to no more than 5% in order to promote the use of second-generation biofuels,
which are considered more sustainable.
Sustainable mobility
In parallel to the increased support for public transport and active mobility (Luxembourg has the largest
investment programme in the EU for trains, trams and buses), recent years have seen the promotion of
electromobility. Luxembourg has decided to set up a joint national infrastructure of public charging stations
for electric vehicles. A total of 800 charging stations are to be installed in public areas and in park & ride
car parks by 2020. Just under 280 charging stations had already been installed by the end of 2018. Relative
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to population, Luxembourg is thus already in third place in the field of public charging infrastructure in
Europe.
Digitalisation
As part of efforts to digitalise the energy transition, Luxembourg legally requires electricity and gas network
operators to replace current electricity and gas meters with smart meters by 2020 and 2021, respectively,
and to manage the corresponding data using a joint central system.
Climate Pact
In 2012, the Luxembourg Government concluded a Climate Pact with the municipalities, offering technical
advice and financial support for climate action measures. The Climate Pact is a wide-ranging instrument for
orienting and shaping communal climate and energy policies, which has been expanded to include the
topics of air quality and the circular economy. It supports the municipalities in introducing an integrated
climate action and energy management system and achieving certification with the ‘European Energy
Award’. The Pact has been well received and has now been signed by all municipalities in Luxembourg, of
which more than 86% had already achieved one of the three certification levels by the end of 2018. The
2018-2023 coalition agreement envisages the further development of the Climate Pact beyond 2020.
As the above examples show, Luxembourg has managed to make significant progress in recent years in the
field of energy and climate policies, thus laying the groundwork for a sustainable energy transition. The
present national energy and climate plan picks up on this trend and sets out an ambitious route for
Luxembourg to drastically reduce energy consumption in all sectors and rapidly develop renewable energy
and electromobility.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 18
1.3.
Consultations and involvement of national and Union entities and their outcome
Regulation (EU) 2018/1999 of 11 December 2018 on the Governance of the Energy Union and Climate
Action provides for public consultations to be carried out. In addition, a multilevel climate and energy
dialogue should be established, in which local authorities, civil society organisations, social partners and
other relevant stakeholders come together to discuss the different scenarios envisaged for energy and
climate policies.
Luxembourg’s present national energy and climate plan for the period 2021-2030 was prepared in the
course of intensive consultations under the leadership of the two responsible ministries (Ministry of Energy
and Spatial Planning and Ministry of Environment, Climate and Sustainable Development).
Involvement and consultation of the national Parliament
Following the adoption of the draft national energy and climate plan by the Government Council, the draft
was presented to Parliament’s Committee on Environment, Climate, Energy and Spatial Development on
27 February 2019.
Following the adoption by the Government Council of the draft composition of the final energy and climate
plan, an exchange of views took place on 6 and 17 December 2019 in Parliament’s Committee on
Environment, Climate, Energy and Spatial Development. This exchange between members of Parliament,
the Minister for the Environment and the Minister for Energy also served as preparation for a consultation
debate in Parliament.
During the consultation debate on 19 December 2019, the spokespersons of the political groups expressed
their views on the objectives, policies and measures envisaged under the national energy and climate plan.
Further information can be found on the Parliament’s website
3
.
Involvement and consultation of stakeholders and the public
Stakeholders and the public were given the opportunity to participate in the preparation of the present
national energy and climate plan at an early stage. As early as 2018, participatory processes took place
during the preparation of the draft national energy and climate plan, the results of which were included in
3
https://www.chd.lu/wps/portal/public/Accueil/Actualite/ALaUne/?current=true&urile=wcm%3Apath%3Aactualite.public.chd.lu/ST-
www.chd.lu/sa-actualites/c96b8d5e-613c-42a7-bb1a-7f4fee350509
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 19
the draft plan where useful and possible. Further details on the above processes (strategy study on the
Third Industrial Revolution and long-term climate strategy) are provided below.
Following the adoption of the draft plan in early 2019, it was presented in a one-day workshop on 21 May
2019 (Journée ‘Generatioun Klima – zesumme fir eise Planéit’) and discussed with representatives of civil
society, social partners, business, academia, Parliament and other stakeholders, with the involvement of
the relevant ministries and administrations as well as local authorities. Almost 200 participants took part in
the discussions. The preparation of the final energy and climate plan involved developing, prioritising and
specifying measures on the basis of approaches that have already been identified, which should make it
possible to achieve the 2030 targets. The participatory process was led by experts and was divided into
seven thematic areas:
housing and sustainable buildings
mobility
industry and entrepreneurship
agriculture
energy
changing lifestyles
governance, sustainable finance and taxation.
In addition, the Ministry of Energy and Spatial Development and the Ministry of Environment, Climate and
Sustainable Development held a series of bilateral discussions with civil society organisations and social
partners in autumn 2019. The aim of the discussions was to reach the broadest possible consensus among
the various stakeholders on the planned policies and measures of the energy and climate plan.
In response to the mobilisation of students for climate action, the government has also actively involved
students in the consultations. In order to better understand their expectations, ideas and proposals, four
regional workshops were held in lyceums (ClimateXchange) in May 2019, in collaboration with the CNEL
National Conference of Schoolchildren. A total of around 500 students participated in the workshops, which
were also attended by the Minister for Education, the Minister for the Environment and the Minister for
Agriculture. The workshops addressed in particular sustainable schools, mobility, waste, energy and
agriculture (sustainable consumption and production).
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 20
Process – strategy study on the Third Industrial Revolution
In 2015, at the initiative of the Ministry of the Economy and in cooperation with the Chamber of Commerce
and IMS Luxembourg, Luxembourg commissioned the American social theorist, sociologist, economist and
public speaker Jeremy Rifkin, who developed the concept of the Third Industrial Revolution and has
presented it in a number of his publications and books, to conduct a strategy study on the Third Industrial
Revolution (TIR process). The study pursued the aim of making the existing economic model more
sustainable and interconnected for future generations. The preparation of the strategy study was linked to
an open, participatory and long-term process, with the aim of identifying the megatrends, drawing the
necessary conclusions and introducing these in a suitable form into democratic institutions. The TIR process
also sought to make use of the ‘collective intelligence’ approach, which is considered an important part of
the concept of open social innovation. In the follow-up to the study, the government stated that the
participatory approach should be continued via existing platforms. In this context, the ‘Energy Future of
Luxembourg’ platform was set up for the energy sector, which has dealt with important and specific topics
relating to the energy transition at several events. On 12 March 2018, an open workshop on the energy
transition was held in the context of the developments in the European Energy Union, with presentations
and discussions on the main pillars of the Energy Union, the National Energy Efficiency Action Plan, the
modelling for the development of the 2030 energy and climate strategy, the renovation potential in
Luxembourg looking ahead to 2070, the potential of renewable energy in Luxembourg looking ahead to
2030, and security of supply issues and competitiveness in the areas of electricity, natural gas and oil.
Process – long-term climate strategy
With a view to developing a long-term climate strategy, the Ministry of Sustainable Development and
Infrastructure organised several consultations with civil society, business, science and public administration
representatives during 2018. These consultations were also attended by Prof. Reinhard Loske. At a first co-
creation workshop on the weekend of 3 and 4 February 2018, around 100 participants identified social
innovations for mitigating climate change. A second workshop took place on 15 March 2018. There, above
all the main principles of governance of the national climate policy were developed with the interest
groups. On 5 June 2018, the preliminary draft strategy was presented and discussed with the stakeholders.
This is intended to serve as the basis for developing the long-term strategy that must be prepared pursuant
to the Paris Climate Agreement and Article 15 of Regulation (EU) 2018/1999 of 11 December 2018 on the
Governance of the Energy Union and Climate Action. In addition, the main findings of the above workshops
have, where possible, been taken into account in the present national energy and climate plan.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 21
Public consultation
Following the adoption of the draft final national energy and climate plan for the period 2021-2030 by the
Government Council on 7 February 2020, the draft was submitted to the public and all stakeholders in a
final public consultation. Neighbouring countries were also included in this process.
From 12 February to 29 March 2020, the aforementioned draft and the draft of the associated
environmental impact report were available on the Environment Portal (www.emwelt.lu) of the Ministry of
the Environment, Climate and Sustainable Development. During this period, interested citizens and
stakeholders were able to submit their opinions, suggestions and comments by email or by post.
A total of 328 citizens took advantage of this opportunity. Some 30 stakeholders from civil society and
business, including social partners, as well as public institutions, submitted comments.
All contributions and comments, including those received after the deadline of 29 March 2020, were
evaluated and duly considered. A lot of the feedback relates to the implementation of measures contained
in the plan and will therefore be taken into account in the implementation process. At the same time, a
functioning dialogue between all national stakeholders is an important prerequisite for the successful
implementation of the energy and climate plan. The bodies provided for in the draft framework law on
climate change make it possible to structure this dialogue.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 22
Iterative process with the European Commission
Luxembourg submitted its draft integrated national energy and climate plan 2021-2030 to the European
Commission on 18 February 2019. The draft was assessed by the Commission in accordance with
Regulation (EU) 2018/1999. On 18 June 2019, the Commission sent nine recommendations to Luxembourg
based on the above assessment. In drawing up the final national energy and climate plan, Luxembourg has
taken these recommendations into account and acted on them where possible.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 23
1.4.
Regional cooperation in preparing the plan
Pentalateral Energy Forum
Luxembourg is an integral part of the energy markets for electricity and gas in Western Europe. As part of
these markets, it benefits – as do the other Member States – from significantly better conditions in terms
of economic efficiency, security of supply and sustainability of energy supply.
A key element of regional cooperation in the context of energy and climate policy is the Pentalateral Energy
Forum. Under the Luxembourg presidency, the following joint chapter was adopted at a conference in June
2019:
Introduction
Within the framework of the Pentalateral Energy Forum for regional cooperation, which has been
in existence since 2005, Belgium, Germany, France, Luxembourg, the Netherlands and, since 2011,
Austria have been working together on a voluntary basis – countries which together are home to
more than one third of the EU population and which account for more than 40% of electricity
generation in the EU. Switzerland joined as a permanent observer in 2011 and actively contributes
to technical and decision-making work. In close cooperation (upon invitation) with the European
Commission, the Pentalateral Energy Forum strengthens cooperation between all relevant
stakeholders and thus pursues the objective of creating a regional electricity market as an
intermediate step towards establishing a single European electricity market.
The cooperation is steered by the energy ministers, who meet regularly. The continuous
monitoring of the activities is ensured by the Penta Coordinators and the Penta NECP Committee,
under the leadership of the relevant directors-general for energy in the participating countries. The
work programme is implemented by the transmission system operators (TSOs), ministries,
regulatory authorities, the European Commission and market players, who meet regularly in three
working groups (support groups).
The great success of the past 15 years has been that the perspective of the participating countries
in terms of energy policy has evolved from a purely national focus to a regional approach. The
participating countries have set concrete regional milestones in various areas that are still relevant
today:
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 24
Internal electricity market/market integration:
Penta Support Group 1 (SG 1) focuses on the coupling of the electricity markets in the region. SG 1
set itself the goal of the flow-based market coupling (FBMC) of day-ahead markets, which was
achieved when the Penta region became the first region in the European Union to introduce this
in May 2015. Since then, flow-based market coupling has been continuously optimised to achieve
higher welfare gains and now serves as the basis for a fully EU-based market coupling for day-ahead
markets.
In order to increase the transmission capacity available for cross-border trading on the intraday
market, SG 1 promoted a coordinated process for calculating intraday capacities, which was
implemented in March 2016 after the flow-based market coupling of day-ahead markets for all
borders in the region as a first step towards coupling the European intraday markets.
The Support Group was able to gain a privileged insight into the drastic changes in the electricity
landscape and the governance of the electricity markets. While in 2005 electricity operators were
still operating mainly independently of each other, over the years the working group has promoted
cooperation between stakeholders, leading, inter alia, to the formation of regional groupings of
TSOs within their associations, the merging of power exchanges and TSOs and the emergence of
new regional players (TSCNet, Coreso, formerly CASC-CWE, SSC).
In view of the new implementation plans to be presented under the ‘Clean energy for all
Europeans’ package, the countries involved will coordinate closely and explore possibilities for joint
action.
Internal electricity market/flexibility:
Support Group 3 (SG 3) focuses on flexibility issues in the region. So far, the work of SG 3 has
focused on balancing energy, intraday and the role of demand-side management – three key areas
for regional cooperation to improve the flexibility of our electricity markets. A number of technical
background papers have been prepared, identifying the main obstacles to greater use of flexibility
in the Penta region. SG 3 is open to traditional participants (regulatory authorities, TSOs) as well as
other stakeholders such as distribution system operators (DSOs), major consumer associations and
renewable energy producers.
In the area of balancing energy, the Pentaforum evaluated existing approaches and exchanged best
practices. The Pentaforum also plays an important role in the implementation of the European
Union guidelines on balancing energy. In terms of demand-side management, a separate group of
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 25
experts has prepared a report outlining the current situation in the Penta region, focusing in
particular on the rules and responsibilities of new market players in each country of the region.
With regard to further cooperation between the participating countries in the field of hydrogen, a
workshop was held to identify possible topics for cooperation in this field.
Security of supply:
Support Group 2 (SG 2) deals with issues surrounding security of supply in the region. In June 2017,
the countries involved signed a memorandum of understanding (MoU) on cooperation with regard
to security of supply. On this basis, and in light of the new EU Regulation on cooperation in the field
of risk preparedness, an emergency exercise was organised in 2018 with ‘PENTEX 2018’ in order to
achieve a better common understanding of national concerns, to identify potentially relevant
(cross-border) crisis situations in the region and to assess various measures to reduce the impact
of possible crises.
The first regional Generation Adequacy Assessment (GAA), carried out by the TSOs of the
participating countries and published in March 2015, was an important milestone. The
methodology of the assessment was based on a probabilistic and chronological approach with
hourly resolution for the years 2015/2016 and 2020/2021 and thus represented a significant
improvement over the existing deterministic approaches. Furthermore, the TSOs of the
participating countries used a common regional data set based on the same scenarios and
assumptions, such as a temperature-dependent load model for the whole region and harmonised
probabilistic hydrological data.
The governments of the Pentaforum countries are convinced that these parameters will remain
relevant in the future. In addition to continuing work on the above areas, the countries
participating in the Pentalateral Energy Forum will focus in the coming years on:
Decarbonisation of the electricity sector
Shared vision of a decarbonised electricity supply in the participating countries by 2050:
The participating countries will discuss their ideas on how to achieve a decarbonised electricity
supply by 2050 (and intermediate targets for 2030 and 2040) based on a highly efficient energy
system strongly influenced by renewable energy, a gradual phase-out of fossil power generation
and efficient end-use of electricity. The first step is to compare national scenarios on a possible
design of the electricity system in 2050 and to identify commonalities and differences between
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 26
these scenarios and how security of supply is ensured in the scenarios. This will serve as a basis for
developing a common understanding of the expectations and challenges in the development of
the future electricity system.
North Seas Energy Cooperation
Luxembourg is part of the North Seas Energy Cooperation and thus belongs to the wider North Sea region,
which has great potential in the field of renewable energy. According to the European Commission,
offshore wind energy in the North Sea is estimated to be able to cover up to 12% of the EU’s electricity
consumption by 2030.
Offshore power generation and transmission infrastructure projects can have cross-border implications for
energy prices, security of supply and the environment, including the availability of marine space and the
speed of innovation. As a result, Luxembourg and the countries bordering the North Sea can greatly benefit
from cooperating with one another.
The North Seas Energy Cooperation (NSEC) was established in 2016. It is an initiative of voluntary, bottom-
up and market-oriented regional cooperation. The aim is to create synergies and avoid incompatibilities
between national policies, exchange knowledge on best practices and promote common strategies where
possible and useful. It also aims to coordinate and promote the further cost-effective use of offshore
renewable energy, in particular wind energy, in order to ensure a sustainable, secure and affordable energy
supply for Luxembourg and the countries bordering the North Sea through an increased and better
coordinated use of offshore wind energy and through potential joint or cluster projects. The NSEC primarily
follows a step-by-step approach, with the longer-term prospect of further integration and increasing the
efficiency of wholesale electricity markets, while contributing to reducing greenhouse gas emissions and
average wholesale price ranges and improving security of supply in the region.
The North Seas Energy Cooperation comprises 10 countries, with the participation of the European
Commission: Belgium, the Netherlands, Luxembourg, France, Germany, the United Kingdom, Ireland,
Norway, Sweden and Denmark.
Regional cooperation
With regard to the development of this plan, the NSEC countries took full advantage of the NSEC,
where experts in the working groups shared knowledge and experience on specific aspects, such
as obstacles and best practices in the area of national offshore wind energy use, and in particular
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 27
the coordination of national renewable energy plans for offshore wind energy by 2030 and market
integration.
The working groups (WGs) that are part of the Cooperation focus on the following topics:
WG 1: maritime spatial planning and environmental impact,
WG 2: development and regulation of offshore pipelines and other offshore infrastructure,
WG 3: support framework and financing of offshore wind energy projects,
WG 4: standards, technical requirements and regulation in the field of offshore wind energy.
Maritime spatial planning and environmental impact
Within the framework of the North Seas Energy Cooperation, the NSEC countries contribute to the
development of a joint environmental impact procedure. In order to achieve our energy and
climate objectives within the EU, we need to better understand the potential environmental
limitations of large-scale wind energy use in the North Sea. Further work on maritime spatial
planning and environmental impact is needed to realise the potential of the North Sea. In order to
increase their knowledge and support the use of offshore wind energy in the North Sea,
Luxembourg and the countries bordering the North Sea will continue to work closely together on
maritime spatial planning, environmental research and cumulative environmental impact
assessment of wind farms by energy, maritime spatial planning and environmental authorities.
Offshore pipelines and other offshore infrastructure
The NSEC serves as a platform to work together on concepts for potential joint offshore wind
energy projects and for coordinated electricity infrastructure, including transmission
infrastructure.
Luxembourg is working with the other North Seas Energy Cooperation countries to explore the
possibilities of specific cooperation projects. In addition to joint offshore wind energy projects
connecting and supported by several Member States, this includes work on possible hybrid
solutions that would exploit cross-border solutions to connect offshore wind farms to the grid and
seek synergies with country interconnection capacities, and on appropriate market rules.
The NSEC countries therefore contribute to the development of opportunities for cooperation in
the field of hybrid projects, identifying and addressing legal, regulatory and commercial barriers.
Coordinating increased interconnection in the NSEC countries would also allow more surplus
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 28
energy to flow to other countries where it could meet the demand in a well-functioning internal
energy market.
The NSEC has drawn up a list of possible areas and projects in the region where joint projects could
be particularly useful. These include: (1) IJmuiden Ver – offshore wind farm to UK, (2) CGS IJmuiden
Ver – Norfolk, (3) COBRA Cable, (4) the DE-NL offshore wind farm and (5) the North Sea Wind Power
Hub. NSEC is working to develop concrete approaches for the implementation of selected projects
from the above list.
The NSEC will continue to work on the action plans for the specific hybrid projects, which can also
be further developed at national and regional level. In addition, the Cooperation will continue to
serve as a forum for reflection on how to deal with uncertainties regarding the regulatory
treatment of hybrid projects at EU and national level, and as a forum for discussing options to
address these issues.
Support framework and financing of offshore wind energy projects
In terms of measures, Luxembourg benefits from the NSEC in several ways: the work of the NSEC
provides a platform for the exchange of best practices in designing support programmes and
developing and refining new concepts to meet new challenges in the field of promoting offshore
wind energy and developing possible options for future joint wind energy projects.
The work of the NSEC countries within the NSEC includes coordinating the timing of calls for
tenders, exchanging best practices in designing support programmes for offshore wind energy and,
where possible, establishing common principles and possible options for aligning support.
As regards the coordination of tenders, the NSEC countries regularly exchange information on their
national tendering schedules. The aim is to identify potential time overlaps and to ensure that the
North Sea region is as even as possible in terms of the tendering process in order to optimise
competition and achieve the best value for money for consumers. The NSEC countries are prepared
to take into account, among other criteria and where possible, the tendering schedules in their
future tender planning in order to avoid unnecessary bottlenecks and to ensure a steady flow of
capacity without interruption cycles for the parties involved.
Within the NSEC, the NSEC countries exchange information on and discuss their prospective
national policy in respect of offshore wind energy, their national offshore utilisation plans and best
practices regarding the design of tenders for offshore wind energy.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 29
At the ministerial meeting in Esbjerg on 20 June 2019, the North Sea states and Luxembourg agreed
to cooperate to achieve total installed capacity in the NSEC member states of at least 70 GW by
2030 on the basis of national planning.
In order to reflect the dynamics of offshore wind energy use in the region, the long-term planned
aggregate capacity of at least 70 GW by 2030 can be achieved with indicative milestones for the
region of around 25 GW in 2020 and 54 GW in 2025.
Within the NSEC, Luxembourg also contributes to analysing and developing options for mobilising
investments in joint projects, for example through EU funds such as the European Fund for
Strategic Investments (EFSI) and the Connecting Europe Facility (CEF) infrastructure fund, as well
as through institutional investors. Such future joint projects could be cross-border renewable
energy projects in line with the CEF proposal.
Harmonising rules, regulations and technical standards
The North Seas Energy Cooperation is working to harmonise standards and technical requirements
that could contribute to further reducing the costs of using offshore wind energy. The
harmonisation of rules, regulations and technical standards focuses on five areas. These include:
(1) aeronautics, labelling and lighting, (2) health and safety, (3) certification of regulatory
requirements, (4) design of wind farms and site exploration, and (5) research approaches. The NSEC
works to develop proposals and recommendations for implementation in close cooperation with
industry. The aim of these recommendations is to reduce costs while maintaining feasibility. The
Cooperation will continue to work to harmonise standards and technical requirements and
exchange best practices to reduce unnecessary regulation and cut costs for industry.
European Union
Luxembourg will also continue to support ambitious goals and their implementation at European level. In
particular, the following objectives are being pursued.
1) In the European Climate Law, the EU commits to ‘zero net greenhouse gases’ by 2050 at the latest and
presents a concrete roadmap on how this will be implemented.
2) As an important first intermediate step, the EU has committed to a binding target of a 55% reduction of
greenhouse gases in the EU by 2030.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 30
3) The European Commission is expected to present by summer 2020 a concrete plan on how to adapt the
relevant EU targets for greenhouse gas reductions and energy, as well as existing EU measures (EU
emissions trading scheme for CO
2
allowances for industry and power plants, EU effort sharing (ESR), land
use, land-use change and forestry (LULUCF), EU Energy Efficiency Directive, EU Renewable Energy Directive,
or regulation of CO
2
emissions from passenger cars and light- and heavy-duty vehicles).
The Commission is also proposing the following additional measures:
- in order to prevent unfair competition from imports that are not made in a way that protects the
climate, the EU should introduce a ‘border tax adjustment’ (CO
2
border adjustment);
- in order to accelerate the phasing-out of fossil fuel drives/engines from new cars and vans, all
vehicles should be fossil-free (electrical, hydrogen) from 2031 onwards;
- the EU should also introduce standards for new trucks, ships and aircraft.
4) The EU presents a financial framework on how the EU budget will proactively support the climate and
energy transition (GHG emissions in the industrial sector: zero carbon steel, cement or glass, major EU housing
renovation programme, support to build 400 GW offshore wind farms in the North Sea, infrastructure
development for zero- or low-emission transport, and conversion to climate-friendly agriculture and land
use). Progress will be measured by a credible and transparent system and a methodology for verification,
traceability and monitoring of expenditure and its impact on climate action and the energy transition.
The European Investment Bank will be transformed into a climate bank that will no longer lend for fossil
fuel projects. It is also important that no common funds are wasted on the further development or
maintenance of nuclear energy in Europe.
5) Before summer 2020, the EU is expected to present a new law to ensure that all batteries sold in the EU
(in cars, buses, but also in other electronic devices) are 100% recycled and produced from materials that
meet high environmental and human-rights standards.
6) The EU should not only tax the big internet companies, but also commit them to high energy efficiency
standards (immersion cooling) and 100% renewable energy.
7) The EU should establish the industrial basis for a radical energy transition through large-scale research
projects (zero carbon steel, cement, glass, green batteries programme, hybrid electric aircraft/ships) and
prevent dumping by imports through binding climate clauses in trade agreements.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 31
2.
National objectives and targets
As part of the trialogue in June 2018, the EU Member States, the European Parliament and the European
Commission reached a political agreement on the target system for 2030, with binding EU targets of a 40%
reduction in greenhouse gases (GHG), a 32% share of renewable energy in the final energy demand and
32.5% for energy efficiency, and a revision clause providing for an increase in 2023. According to Regulation
(EU) 2018/1999 on the Governance of the Energy Union and Climate Action, the Member States are obliged
to submit to the European Commission a national energy and climate plan, comprising a detailed
presentation of the national objectives for reducing greenhouse gases, the objectives for renewable energy
and energy efficiency and the measures planned in this regard. This plan sets out Luxembourg’s objectives
under the target system referred to above. There is also the requirement that the combined trajectories
submitted by the Member States achieve the European minimum targets.
For Luxembourg, there is already a minimum binding GHG reduction target that arises from Regulation
(EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to
2030. The GHG reduction set down in this regulation is 40% by 2030, based on Luxembourg’s GHG
emissions in 2005. In terms of renewable energy, Directive (EU) 2018/2001 on the promotion of the use of
energy from renewable sources provides for a benchmark formula, resulting in an increase in the target for
Luxembourg of around 12 percentage points, which corresponds to a 2030 target of around 23%. This
target can be met by using domestic resources, importing biofuels or promoting electromobility in the
transport sector as well as by using cooperation mechanisms. For the area of energy efficiency, EU effort
sharing and the EU target for energy efficiency result in a target corridor of 35 to 40%, which is determined
in comparison with the EU reference development for Luxembourg for 2030, which was published in 2007
(EU PRIMES 2007)
4
.
Luxembourg’s objectives in the dimensions to be considered are presented below. It should be mentioned
at the outset that all of the minimum requirements outlined above, whether in the area of GHG reduction
or regarding the contribution of renewable energy or energy efficiency, are clearly met. Luxembourg
considers it essential to embark on an ambitious path together with its European partners.
4
European Commission DG for Energy and Transport (2008). European energy and transport -TRENDS TO 2030 — UPDATE 2007.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 32
2.1.
Decarbonisation dimension
2.1.1.
Greenhouse gas emissions and removals
In terms of consistency with the objective set out in Article 2.1.a of the Paris Climate Agreement,
Luxembourg is aiming at a national level to reduce GHG emissions for the sectors outside the emissions
trading scheme by 55% by 2030 compared to the base year 2005. In fact, the IPCC special report on the
impacts of global warming of 1.5 °C above pre-industrial levels states that it will only be possible to limit
global warming to 1.5 °C if global greenhouse gas emissions are halved by 2030 (compared to current
levels), followed by climate neutrality by 2050.
The national GHG reduction target is therefore more ambitious than Luxembourg’s binding contribution to
the EU target in accordance with Regulation (EU) 2018/842 on binding annual greenhouse gas emission
reductions by Member States from 2021 to 2030. The GHG reduction target enshrined in this regulation
for the sectors outside the emissions trading scheme is 40% by 2030 compared to 2005. The annual
emissions budgets are calculated on the basis of a linear reduction trajectory between the real average
GHG emissions in 2016 to 2018 and the points target for 2030.
According to Regulation (EU) 2018/841 on the inclusion of greenhouse gas emissions and removals from
land use, land use change and forestry in the 2030 climate and energy framework, each EU Member State
is given a target for the LULUCF sector
5
. Taken together, the debits from the land use categories included
in the accounting (in accordance with Article 2 of Regulation (EU) 2018/841) may not exceed the credits at
the end of the two five-year periods 2021 to 2025 and 2026 to 2030 (‘no net debit rule’).
2.1.2.
Renewable energy
Luxembourg is aiming to increase the share of renewable energy from 11% in 2020 to 25% by 2030.
According to current scenarios, the national expansion of renewable energy by 2030 would amount to
19.6%, in each case on the basis of the gross final energy demand, in other words the sum of the sectoral
energy demands for electricity, heat and fuels in the transport sector. In addition to ambitious renewable
energy policies, what these scenarios have in common is a significant increase in energy efficiency (see
Section 2.2) and thus a reduction in energy demand, which in turn implies an additional increase in the
share of renewable energy in relation to consumption. However, in line with the EU target (increasing the
renewable share to 32% at EU level by 2030), a national contribution of 25% would appear to be reasonable
5
LULUCF: Land Use, Land Use Change and Forestry
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 33
and appropriate. To cover the corresponding shortfall, it is advisable to cooperate with other EU Member
States, which would involve the use of the cooperation mechanisms that had already proved themselves
by 2020. Cooperation with other Member States as well as statistical transfers will be further developed
and will include concrete projects (e.g. large solar installations in southern Europe or offshore wind
installations).
Target volumes at sectoral and technological level will be presented below, while the following chapters
contain a discussion of the measures and an impact assessment. The results and values presented relate
to the target of 25%.
Table 1 : Sectoral shares of renewable energy in Luxembourg up to 2040 according to the target
scenario with the upper range value of 25% (in 2030).
Renewable energy shares, sectoral
2017
2020
2025
2030
2035
2040
Renewable energy share,
electricity sector
%
8.1%
11.9%
23.5%
33.6%
38.8%
45.4%
Renewable energy share, heat
sector
%
8.1%
13.7%
19.9%
30.5%
35.8%
47.1%
Renewable energy share,
transport sector
%
6.4%
11.3%
18.4%
25.6%
40.4%
54.3%
Admixture rate for biofuels
%
5.6%
7.7%
8.8%
10.0%
14.4%
18.7%
Renewable energy share, total -
national production/consumption
%
6.4%
9.4%
13.9%
19.6%
24.8%
31.9%
Renewable energy share, total - incl.
renewable energy cooperation
%
6.4%
11.8%
17.6%
25.0%
31.0%
39.3%
Source: Own illustrations, 2019
Renewable energy currently plays a significant but comparatively limited part in energy generation in
Luxembourg. However, this can and should change significantly in the coming years, thus making it a
consistent continuation of the trend that has been set in the recent past. Renewable energy such as wind
energy and photovoltaics, but also biomass – the core technologies in the field of electricity generation for
Luxembourg – have also seen considerable growth in recent years. In the space of a decade, their
contribution has doubled – both in the electricity sector (from 3.3% in 2007 to 8.1% in 2017) but also in
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 34
terms of heat production (from 4.4% in 2007 to 8.1% in 2017). In the transport sector, this change has been
even more pronounced. The renewable energy share was 2.2% in 2007 and increased to 6.4% in 2017.
Table 2 : Technology-specific energy generation from renewable energy in Luxembourg up to 2040
according to the target scenario with the upper range value of 25% (in 2030).
Energy production,
technological details
2017
2020
2025
2030
2035
2040
Electricity sector
Biogas*
GWh
72
56
70
93
96
97
Biomass**
GWh
101
192
228
271
268
338
Hydroelectric power
GWh
104
93
97
100
104
107
Photovoltaics
GWh
108
197
786
1,112
1,257
1,442
Wind energy
GWh
185
211
382
674
956
1,166
Renewable energy electricity, total
GWh
570
748
1,563
2,251
2,680
3,150
Heat sector
Biomass & biogas, grid-
connected
GWh
302
589
625
676
669
728
Biomass, decentralised
GWh
672
883
1,084
1,263
1,083
1,083
Solar thermal energy
GWh
25
58
115
190
236
290
Heat pumps
GWh
52
95
207
422
507
507
Renewable energy heat, total
GWh
1,052
1,626
2,030
2,551
2,495
2,609
Transport sector
Biofuels, total
GWh
1,282
1,632
1,563
1,485
1,738
1,749
Renewable energy use, total
(national)
GWh
2,904
4,006
5,156
6,287
6,914
7,508
Renewable energy cooperation
Renewable energy cooperation
energy
GWh
0
1,000
1,374
1,748
1,748
1,748
* Central plants (fed into a heating network)
** Decentralised plants (not fed into a heating network, all sectors)
Source: Own illustrations, 2019
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 35
The coming decade was looked at in the context of an underlying study (cf. Resch et al. 2019), using a
variety of possible development trajectories and corresponding energy scenarios. The target scenario
presented in this plan corresponds to 25% in 2030. If the status quo (2017) and the reference development,
which corresponds to a continuation of the existing policies, are additionally taken into account, the
increase is even more noticeable. The share of renewable energy in gross final energy demand, in other
words the sum of the sectoral energy demands for electricity, heat and fuels in the transport sector, would
accordingly increase from 6.4% in 2017 to 12.9% in the case of merely continuing with the existing policies
(reference development) – as illustrated by corresponding data in Section 4 of this report. If additional
interventions are made, in both renewable energy and energy efficiency, an increase to 19.6% in 2030
would be possible in accordance with the target scenario presented here.
Table 1 provides information on the sectoral decomposition of the overall balance and Table 2 provides
supplementary details on the potential underlying technology split. Accordingly, the highest growth is
expected for renewable energy in the electricity sector. Here, a share of around 33.6% appears possible for
2030 – including on the basis of projects that are already in progress (for example in the field of wind
turbines, solar installations and biomass cogeneration). By 2040, the share of renewable energy in gross
electricity consumption would then increase further to a remarkable 45.4%. In second place in terms of the
speed of change is the heat sector. Considerable growth compared to the current situation is expected
here, partly in line with electricity generation (biomass cogeneration), but also at a decentralised level, for
instance in the case of heat pumps, solar thermal collectors for water heating or modern biomass heating
systems. Accordingly, the share of renewable energy in the heating sector would rise from the current 8.1%
(2017) to 30.5% by 2030 and to 47.1% by 2040. The considerable increase in the share of renewable energy
in the years after 2030 is mainly a consequence of the significant increase in energy efficiency, and thus
the reduction of energy demand in the heating sector. Furthermore, a massive increase in the use of
renewable energy is also expected in the transport sector. This assumes an increase in biofuel blending
(second generation). It is also assumed that the biofuel mix up to and including 2030 will consist of a
maximum of 5% of first-generation fuels
6
, measured by total road transport fuel demand. The aim is also
to massively increase e-mobility. Overall, this will result in a significant increase in the share of renewable
energy in the transport sector, to 25.6% by 2030 and 54.3% in 2040 (using the calculation logic established
6
More specifically, both the target and the reference scenarios assumed that by 2030 the share of first-generation biofuels could be reduced to
2.5% of road transport fuel demand.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 36
under EU Directive 2018/2001). The required renewable energy volumes, which are to be covered in future
by renewable energy cooperation with other countries, as they are necessary to achieve the envisaged
renewable energy targets of 11%
7
in 2020 and 25% in 2030, are also listed in Table 2. In the target scenario
considered here, these amount to 1 TWh in 2020 and 1.75 TWh in 2030 (and beyond).
7
In the target scenario, the assumed renewable energy cooperation volumes (1 TWh) mean that the national minimum target (11%) will be
exceeded in 2020 – thus, taking into account renewable energy cooperation, a renewable energy share of 12% of gross final energy demand is
achieved.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 37
2.2.
Energy efficiency dimension
Regarding compatibility with the GHG reduction target mentioned in Section 2.1.1, Luxembourg is aiming
for a reduction of final energy demand of between 40% and 44% by 2030 compared to the EU PRIMES
baseline (2007).
With regard to achieving the goal, which in the illustration below is 44%, a distinction is made in particular
between the following areas, based on the assumed intensification of existing policy instruments and the
introduction of new ones:
level of ambition in the building stock, both for new construction and energy renovation –
renovation rate and depth of renovations implemented,
efficiency in industry and SMEs,
the extent to which transit and cross-border commuting are addressed,
the development of electromobility in existing vehicles.
The key target figures of the target scenario, based on the upper range value of 44%, are presented in Table
3.
The sum of the annual final energy savings of all sectors (private households, trade, commerce and services,
industry and transport) compared to the corresponding final energy demand in the reference scenario in
the period 2021 to 2030 is shown in Figure 1. In 2030, the final energy savings achieved by all sectors
through the implemented measures amount to approximately 14.5 TWh, resulting in a final energy
consumption of 35,568 GWh compared to the final energy consumption of 50.5 TWh in the reference
scenario. The final energy demand of 35,568 GWh in 2030 (see Table 3), corresponds to a 44% reduction
in final energy demand according to EU PRIMES 2007.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 38
Table 3 : Key target figures of the target scenario in the area of energy efficiency based on the upper
range value of 44%
Target scenario
44% efficiency (EFF44)
Efficiency target 2030 (versus EU PRIMES in 2030)
-44%
Final energy demand [GWh]
35,568
Total
-30%
Households
-40%
Tertiary
-24%
Industry
-17%
Road transport
-38%
Road fuels (excluding electricity for e-mobility)
-41%
Renovation rate 2020-2030
8
2.7%
Depth of renovation
(average reduction in heat requirement after full renovation)
72%
E-mobility: Share of electric cars/plug-in hybrids in existing vehicles 2030
(residents)
49%
Source: own calculations 2019
8
Based on the additional renovations compared to the baseline scenario. The renovation rate expresses the proportion of buildings renovated
per year in relation to the old building stock (buildings built before 1991).
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 39
Source: own calculations 2019
Figure 1: Annual final energy savings in GWh in private households, the trade, commerce and services
sector, industry and the transport sector in Luxembourg (based on an energy efficiency
target of 44%)
The cumulative final energy savings of all sectors (private households, trade, commerce and services,
industry and transport) in the period 2021 to 2030 amount to a good 97.3 TWh if the planned energy
efficiency measures are implemented (see Figure 2).
4.528
5.717
6.917
8.067
9.243
10.400
11.538
12.664
13.770
14.481
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 40
Source: own calculations 2019
Figure 2 : Cumulative final energy savings over the period 2021 to 2030 in GWh in private households,
the trade, commerce and services sector, industry and the transport sector in Luxembourg
(based on an energy efficiency target of 44%)
The sum of the annual final energy savings of residential and non-residential buildings in Luxembourg
compared to the corresponding final energy demand in the reference scenario in the period 2021 to 2030
is shown in Figure 3. In 2030, the final energy savings achieved by the planned measures in residential and
non-residential buildings amount to approximately 4 TWh (see Figure 3).
The cumulative energy efficiency renovation of residential and non-residential buildings in Luxembourg
over the period from 2021 to 2030, at just under 28.6 TWh, contributes to the final energy savings in all
sectors (see Figure 4). The biggest final energy savings are achieved by the renovation of private dwellings,
followed by the renovation of office and public buildings and the renovation of other buildings (see Figure
4). This is explained by the fact that even in Luxembourg, despite the importance of the financial centre,
there are considerably more square metres of residential than office buildings.
4.528
10.245
17.162
25.229
34.473
44.873
56.411
69.075
82.845
97.326
0
20.000
40.000
60.000
80.000
100.000
120.000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 41
GWh
GWh
Wohngebäude
Residential buildings
Bürogebäude
Office buildings
Öffentliche Gebäude
Public buildings
Sonstige Gebäude
Other buildings
Source: own calculations 2019
Figure 3 : Annual final energy savings in GWh from the renovation of all residential and non-
residential buildings in Luxembourg (based on an energy efficiency target of 44%)
GWh
GWh
Wohngebäude
Residential buildings
Bürogebäude
Office buildings
Öffentliche Gebäude
Public buildings
Sonstige Gebäude
Other buildings
1.118
1.333
1.549
1.766
1.984
2.194
2.402
2.607
2.808
3.013
297
323
347
370
390
421
448
474
497
517
169
183
194
206
215
230
243
255
265
274
109
119
128
137
145
157
168
178
187
195
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
GWh
Wohngebäude Bürogebäude Öffentliche Gebäude Sonstige Gebäude
1.118
2.451
4.000
5.766
7.750
9.944
12.346
14.953
17.761
20.775
297
621
969
1.341
1.734
2.157
2.609
3.087
3.589
4.112
169
351
543
745
956
1.180
1.416
1.662
1.917
2.179
109
229
359
498
645
806
977
1.159
1.352
1.553
0
5.000
10.000
15.000
20.000
25.000
30.000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
GWh
Wohngebäude Bürogebäude Öffentliche Gebäude Sonstige Gebäude
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 42
Source: own calculations 2019
Figure 4 : Cumulative final energy savings over the period 2021 to 2030 in GWh from the renovation
of all residential and non-residential buildings in Luxembourg (based on an energy efficiency
target of 44%)
In Figure 5, the development of the final energy savings that will be achieved through the renovation of
public buildings in Luxembourg by 2030 is once more presented separately by way of example. The public
sector will serve as an example and will be the starting point for the development of a large energy
efficiency market in Luxembourg. Over this period, the annual final energy savings will grow gradually from
169 GWh (2021) to 274 GWh (2030), corresponding to a total increase in annual final energy savings of
105 GWh. The renovation of public buildings accounts for approximately 8% of the total final energy savings
through energy efficiency renovations of buildings.
Source: own calculations 2019
Figure 5 : Annual final energy savings in GWh from the renovation of public buildings in Luxembourg
(based on an energy efficiency target of 44%)
In Figure 6, the development of the cumulative final energy savings that will be achieved through the
renovation of public buildings in Luxembourg by 2030 is once more presented separately by way of
example. Over this period, the cumulative final energy savings from the renovation of public buildings will
grow gradually from just under 169 GWh (2021) to just under 2.2 TWh (2030), corresponding to an increase
in cumulative final energy savings of around 2 TWh.
169
183
194
206
215
230
243
255
265
274
0
50
100
150
200
250
300
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 43
Source: own calculations 2019
Figure 6 : Cumulative final energy savings over the period 2021 to 2030 in GWh from the renovation
of public buildings in Luxembourg (based on an energy efficiency target of 44%)
As a result of the dynamic economy and population growth, new construction is more important than in
other EU countries, in terms of both residential and purpose-built buildings. Therefore, in 2017,
Luxembourg introduced a statutory energy standard for new buildings, roughly corresponding to the level
required by the Passivhaus Standard.
The interplay between building efficiency (roof, walls, windows, basement) and the phasing-out of fossil-
fuel heating systems should help to make the building renovation strategy a success. This will be
complemented by a fuel oil substitution programme and the establishment of low-temperature heating
networks fed by waste heat from industry and renewable energy sources (deep geothermal energy, heat
pumps, sustainable wood). The national building renovation strategy will be developed in cooperation with
all stakeholders. In particular, social aspects, heritage protection aspects, and ‘multi-apartment buildings’
will be discussed in detail and specific measures implemented.
Due to the dynamic development of the housing market that is characteristic of Luxembourg, driven by
high demographic growth and strong price increases, it should be mentioned at this point that the
proportion of new buildings resulting from the demolition of existing buildings is not insignificant, as this
169
351
543
745
956
1.180
1.416
1.662
1.917
2.179
0
500
1000
1500
2000
2500
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 44
also makes it possible to steadily reduce the number of unrenovated existing buildings and achieve
significant efficiency improvements.
Further national long-term targets regarding the further development of energy efficiency in Luxembourg
are presented in Luxembourg’s 4th National Energy Efficiency Action Plan (NEEAP 2017). In accordance
with Article 3(1) of the Energy Efficiency Directive, Luxembourg has set an energy efficiency target of
49,292 GWh for 2020 (NEEAP 2017). In order to achieve this energy efficiency target, measures will
inevitably be needed in all sectors.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 45
2.3.
Energy security dimension
Luxembourg has neither its own large power plants for electricity generation nor gas production and
storage facilities and is therefore highly dependent on imported energy. Security of supply is the
responsibility of the undertakings operating on the market and those regulated by the regulatory authority
(Institut Luxembourgeois de Régulation, ILR), as provided for in the revised Law of 1 August 2007 on the
organisation of the electricity market and the revised Law of 1 August 2007 on the organisation of the gas
market. The government is responsible for monitoring security of supply.
Luxembourg’s dependence on energy imports calls for a well-functioning European internal market for
electricity and gas. It is therefore aiming to rapidly achieve an internal electricity and gas market with
intensive cross-border competition between suppliers and tap in to the flexibility potential of consumers.
Luxembourg is also in favour of further intensifying regional cooperation on security of supply in the
electricity and gas sectors. On the basis of their legal obligations, electricity and gas network operators
attach great importance to ensuring that their infrastructure is in good condition and in line with the state
of the art. The available capacity of the networks must meet the growing demands caused by the country’s
economic and demographic development. The widespread installation of smart meters for all consumers
will allow network operators to manage their networks even more intelligently and securely.
The expansion of renewable energy that is needed to achieve the targets will allow Luxembourg to
noticeably reduce its dependence on electricity imports. Nevertheless, due to the enormous demand for
electricity by industry, domestic energy sources will still only be able to make a certain contribution to
Luxembourg’s energy supply in future. In the field of load flexibility, Luxembourg is aiming to significantly
increase the share of consumers actively participating in the electricity market (including by setting up an
energy data platform).
The increased thermal insulation requirements for new buildings and the planned renovation strategy for
the building stock will lead to a downward revision of the demand for natural gas.
Luxembourg has no oil reserves of its own and must therefore import 100% of the oil it consumes.
Moreover, Luxembourg does not have any refineries on its national territory. Therefore, only mineral oil
products, and not crude oil, are imported. The vast majority of these come from Belgium, followed by
Germany, France and the Netherlands. In the interests of security of supply, it is important to maintain the
diversification of countries of origin in the future and to diversify supply routes. Since the airport in
Luxembourg is supplied with fuel directly via an underground pipeline (CEPS), the diversification of supply
routes relates primarily to the mineral oil products diesel, petrol and fuel oil. The majority of imports are
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 46
via road, with only about a fifth being handled by rail. The remainder is imported by inland waterway via
the Moselle to Mertert, the only port in Luxembourg.
As a member of the European Union and the International Energy Agency (IEA), Luxembourg is obliged to
maintain stocks of mineral oil equivalent to, on average, 90 days of the previous year’s imports. The
importers of mineral oil products have a national legal obligation to hold compulsory stocks of 8 days on
national territory, 37 days on regional territory outside Luxembourg, and the remainder elsewhere in the
EU.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 47
2.4.
Internal energy market dimension
2.4.1.
Electricity interconnectivity
Luxembourg is almost completely reliant on imports to cover its demand for electricity. A high level of
interconnection is therefore essential for Luxembourg and can only be compared to a limited extent with
the interconnection levels of other EU Member States. Luxembourg already has interconnection capacities
that far exceed the 2030 targets set in the Council Decision of October 2014. In mathematical terms, the
(N-0) interconnection level in relation to the annual peak load is currently approximately 270%. With the
network expansion projects that are currently planned, this will increase to approximately 400% in 2030
and should therefore offer sufficient reserves to be able to adequately manage future increases in
consumption in all areas.
2.4.2.
Energy transmission infrastructure
In the gas sector, the currently existing transmission system infrastructure is considered sufficient,
particularly because peak demand has fallen significantly due to the decommissioning of the TwinErg CCGT
power plant. There is no need to further expand cross-border connections. At the same time, the gas
market with Belgium, which has been shared since 2015, is to be further enhanced.
In the electricity sector, apart from the fact that the Creos public grid is located in the same bidding zone
as the German Amprion grid, the integration of Luxembourg into the European electricity grid has been
significantly improved by the commissioning of a phase-shifting transformer and the establishment of a
permanent line connection between the Luxembourg and Belgian transmission systems. Testing of the
phase-shifting transformer has now been completed. Currently, the phase-shifting transformer is used to
optimise the load flows in Luxembourg and the surrounding regions. Luxembourg aims to further
strengthen this meshed integration over the medium term. Since an increase in the demand for electricity
and peak load is expected in Luxembourg, in part due to the expected population increase, diversification
of economic activities and general economic growth, it is necessary to expand the existing
interconnections. The transmission system operator Creos is therefore planning to convert an existing
220 kV interconnection towards Germany to high-temperature conductors by 2020 and, in the medium to
long term, to upgrade/reinforce the 220 kV line towards Germany. There are still no plans to connect the
Luxembourg public grid to the French grid.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 48
2.4.3.
Market integration
From Luxembourg’s perspective, bringing about an internal energy market is of central importance,
particularly for the electricity sector. Luxembourg is supporting the European Commission’s efforts to
develop a new European market design for the electricity markets. The consistency of electricity market
design in the Member States will be of paramount importance here. Separate national routes will only
burden the electricity consumers, disregard the impact on other Member States and, at worst, jeopardise
security of supply.
In a complete internal electricity market, national borders should no longer pose a challenge to market
players. The Luxembourg Government, the regulatory authority ILR and the transmission system operator
Creos are actively participating in the further development of the internal electricity market in European
bodies and institutions.
Particular importance is attached to cooperation within the framework of the Pentalateral Energy Forum
(PLEF), which, in addition to Luxembourg, comprises Belgium, the Netherlands, France, Germany, Austria
and Switzerland. This region, which is closely linked from a technical and economic perspective, has been
playing a leading role in bringing together the European electricity markets for years. Within the PLEF, the
close integration of the electricity markets of Germany and Luxembourg with the cross-border market area
once again stands out. Luxembourg aims to maintain this joint market area and further enhance the
cooperation.
Luxembourg will investigate whether the conclusion of bilateral agreements with other Member States on
mutual solidarity in the event of energy crises could improve security of supply in Luxembourg.
Compared with the rest of Europe, electricity and gas prices for final consumers in Luxembourg are well
below the European average. However, the proportion of consumers who change suppliers is relatively
low. In this context, it is important to create comparability and transparency. By actively comparing the
tariffs of their supplier with those of competitors and changing suppliers if necessary, energy consumers
can considerably reduce their energy costs. It is therefore an aim to ensure that the prices are readily
comparable and transparent.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 49
To improve the involvement of active consumers in the market, whether by decentralised production or by
participation in flexibility markets yet to be defined, Luxembourg will convert 95% of its electricity meters
to smart meters by 2020.
To improve the market integration of renewable energy, Luxembourg has converted parts of its support
system to a sliding market premium. Joint, cross-border calls for tenders for renewable energy with other
European countries are also in the planning stage.
In order to minimise the risk of supply bottlenecks in the natural gas sector, as well as to increase security
of supply in general and to integrate the markets, Creos merged the two national gas markets to form a
single, country-wide market in 2015 in cooperation with the Belgian network operator Fluxys. As part of
this consolidation of the market areas, the guaranteed, uninterruptible capacities at the Belgian border
were also considerably increased to their maximum technical availability. This significantly increases
uninterruptible capacities even without line upgrades and ensures long-term security of supply for
Luxembourg.
2.4.4.
Energy poverty
Luxembourg has a comprehensive strategy for tackling poverty in general (minimum wage, social inclusion
income (REVIS), etc.). In addition, there is a series of measures in Luxembourg offering targeted help to
people affected by energy poverty.
The amended laws of 1 August 2007 on the organisation of the electricity market and on the organisation
of the natural gas market stipulate that household customers who are unable to pay their electricity or gas
bills can receive social assistance from the responsible social welfare office.
For its part, the Law of 18 December 2009 on the organisation of social assistance stipulates that, when
applying the procedures established in the above-mentioned laws on the organisation of the electricity and
natural gas markets, the responsible social welfare office must investigate whether the household
customer is able to pay his or her energy bills and is thus entitled to social assistance.
Particular attention must be paid to housing in the fight against energy poverty, as rising housing prices
have become a major social challenge in Luxembourg. Low-income population groups can often only have
access to poorly maintained rented housing in old buildings with low energy standards. The government is
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 50
therefore targeting the creation of affordable housing. Energy efficiency measures in the housing sector
will be designed in a way that simultaneously improves the national energy balance and the living
conditions of low-income groups.
The government will also work with all relevant stakeholders to develop innovative programmes, as part of
the national long-term renovation strategy, which will create incentives to renovate old housing while
providing housing for low-income households.
It should also be mentioned that there is already a programme in place through the cost-of-living allowance
(‘Allocation de vie chère’), which also counteracts energy poverty. At the same time, the state rent subsidy
can help those in need to face a possible increase in the cost of housing. It should also be pointed out that
the current social assistance legislation stipulates that any person who satisfies the conditions for
entitlement to social assistance is entitled, under defined conditions, to a minimum provision for domestic
energy if he or she is unable to cover the costs of domestic energy.
The enormous amount of investment in infrastructure development and the introduction of free public
transport from 1 March 2020 are certainly not only transport policy measures, but also clearly social
measures.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 51
2.5.
Research, innovation and competitiveness dimension
Luxembourg is a dynamic country in terms of industrial research, development and technology. In order to
make the transition to a low-carbon economy and society, considerable efforts are needed to support
technological development, research and development of new technologies and social innovation. The
development of research and innovation activities is crucial for the competitiveness of a country, and the
Luxembourg Government is therefore investing considerable financial and organisational resources in
these activities.
The consistent energy and climate policies, combined with the transformation of Luxembourg’s financial
centre towards green finance and the emerging university and research landscape, make Luxembourg an
ideal location for green tech and climate solutions. The Luxembourg Government will develop a concrete
strategy in the coming months, bringing together all relevant stakeholders and embedding this in the ‘Let’s
make it happen’ strategy.
In June 2010, the European Council adopted the development of the Europe 2020 strategy and thus
confirmed the five joint EU targets: promoting the employment of those able to work, improving the
conditions for accessing innovation, research and development, achieving the climate change and energy
targets, improving the level of education and promoting social integration, in particular by reducing
poverty. Each Member State has aligned its national 2020 targets with the core targets of the EU and set
out a number of actions in its National Reform Programme (NRP). The NRP is a key contribution of the
Member States to the Europe 2020 strategy. Luxembourg’s latest NRP
9
of April 2019 explains how the
objectives are to be achieved. Implementing an effective research policy for both the public and private
sectors is a priority for the Luxembourg Government. For 2020, Luxembourg has set itself a national
research intensity target of between 2.3% and 2.6% of GDP. The associated key measures for achieving the
national target are set out in the NRP. In Luxembourg, the trend in state resources spent on research and
innovation has grown steadily, both in the public and the private sector, from €23.6 million in 2000 (0.13%
of GDP) to €368.5 million in 2018 (0.65% of GDP).
Public support for research and development is focused on innovation in all businesses. Research and
development has traditionally focused on the steel, aviation and automotive sectors. In recent years,
however, the government has made considerable efforts to develop further priorities in the areas of
information and communication technologies, logistics, health technologies, materials, energy and
9
https://odc.gouvernement.lu/fr/publications/rapport-etude-analyse/programme-national-de-reforme/2019-pnr-luxembourg-2020.html
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 52
environmental technologies (cleantech). Environmental technologies are among the priorities of the
national economic diversification strategy. In recent years, Luxembourg has made concrete progress in the
areas of sustainable construction, sustainable mobility and the circular economy. Initiatives in these areas
are in line with EU policy and the various directives on issues such as the energy efficiency of buildings,
smart transport systems or ecodesign requirements.
Thanks to its steel industry, Luxembourg has a long-standing tradition of materials-based research. Today
it is working, among other things, on the development of sustainable building materials. In addition,
Luxembourg now has three research teams in the field of materials research for solar photovoltaics, which
are working on the further development of resource-optimised thin-film PV.
Furthermore, Luxembourg also has innovation clusters that are dedicated to the issues mentioned above.
Public research stakeholders, including the University of Luxembourg, play a key role in this. The same
applies to Luxinnovation, the national agency for promoting innovation and research, which offers
personalised consultancy and support for the stakeholders and the government in the areas of research
and innovation (access to funding opportunities, finding partners, business creation, etc.) and thus plays an
important role in terms of the European networks in this area.
To strengthen the competitiveness of the country, Luxembourg has in recent years created the liberal,
modern, flexible, attractive and innovative legal framework needed to develop new activities, by means of
an active economic policy.
Regarding competitiveness, compound index values that combine several pieces of information to form a
single numerical value and therefore only give a rough overall picture of territorial competitiveness are
increasingly being used for international comparisons. In Luxembourg, the Observatoire de la Compétitivité
(ODC) analyses and monitors a number of international reference values and rankings in its annual
competitiveness report
10
. The ODC monitors the annual reports, including those of the World Economic
Forum, the Institute for Management Development, the Heritage Foundation and the European
Commission. According to the results, Luxembourg is within the top 10 at EU level for the vast majority of
the benchmarks analysed.
10
https://odc.gouvernement.lu/fr/actualites.gouvernement%2Bfr%2Bactualites%2Btoutes_actualites%2Bcommuniques%2B2018%2B11-
novembre%2B13-bilan-competivite-2018.html
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In addition to the international reference values, the ODC has also kept a national ‘scoreboard’ for
competitiveness since 2004, in order to measure and assess Luxembourg’s competitive position, the results
of which are published in the competitiveness report and discussed with social partners and experts. Since
2017, the ODC has developed a new national ‘scorecard’
11
, which is a flexible instrument that can be further
developed over time and adapted if necessary. It covers the dimensions of competitiveness, welfare and
sustainability and at the same time ensures that there is a balance between economic, social and ecological
aspects. This Luxembourg reference value analyses 68 different indicators. This instrument makes it
possible to summarise the performance of the countries in the indicators of the three aspects of economy,
society and environment and the associated advantages and disadvantages. In the overall ranking,
Luxembourg is in ninth place at EU level, thus securing its position among the ‘high performance’ countries.
The result of the national ‘scoreboard’ confirms the results of the analysed international reference values
at EU level.
In terms of innovation, reference can be made to an annual comparative evaluation analysis by the
European Commission, which measures the innovation performance of the EU Member States by
comparing the innovation performance with the international competition. This ‘European Innovation
Scoreboard’ assesses the relative strengths and weaknesses of national research and innovation systems
and helps countries to identify areas that they need to address. The 2018 edition of the EIC emphasises
that the innovation performance of the EU Member States is continuing to improve, progress is accelerating
and the outlook is very positive. Since 2010, the average innovation performance of the European Union
has risen by 5.8 percentage points and is expected to improve by a further 6 percentage points in the next
two years. The 2018 evaluation is led by Sweden (average evaluation: 0.710 out of 1), followed by Denmark
(0.668) and Finland (0.649). Luxembourg is also among the group of innovation leaders, in sixth place
(0.611).
11
https://odc.gouvernement.lu/fr/statistiques/tableau-bord-competitivite.html
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 54
3.
Policies and measures
3.1.
Decarbonisation dimension
3.1.1.
Greenhouse gas emissions and removals
3.1.1.i. Policies and measures to achieve the target set under Regulation (EU) 2018/842 as referred
to in point 2.1.1 and policies and measures to comply with Regulation (EU) 2018/841, covering all key
emitting sectors and sectors for the enhancement of removals, with an outlook to the long-term vision and
goal to become a low-emission economy and achieving a balance between emissions and removals in
accordance with the Paris Agreement
Introducing a climate framework law
With the aim of climate policy to provide a legal basis in line with the Paris Climate Agreement, the
government presented a draft climate law in autumn 2019, in line with the coalition agreement. This draft
law is designed to strengthen the framework of national climate policy, in particular to allow for a
coordinated and integrated approach between all relevant stakeholders, levels and sectors, and to improve
consistency during the implementation. The draft consists of three main parts.
The first part establishes an institutional framework for climate policy and sets out the principles and
objectives as well as the governance structure of Luxembourg’s climate policy.
The draft law sets out the following four principles: the principle of climate justice, the principle of
progression, according to which only continual improvements to climate policy are possible, the principle
of integrated pollution control, according to which climate policy must not be pursued at the expense of
biodiversity, air quality, water or other elements of the environment, and the principle of integrity,
according to which climate policy genuinely pursues the objective of ensuring a safe and healthy climate.
In addition to national climate targets consistent with the Paris Climate Agreement, the draft introduces
sectoral climate targets. This will ensure that there is a shared responsibility. If the annual amount of
emissions available in a sector is exceeded, the matter will be referred to the Government Council with a
view to establishing an emergency programme to ensure compliance with the climate objectives. A Grand
Ducal Regulation sets the respective emission allowances for the sectors for an initial period up to 2030.
The target scenario presented in Section 5 provides a template for this. The inter-ministerial committee for
the coordination of climate policy provided for in the draft climate framework law will participate in the
drafting of the said regulation.
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The draft law also establishes three bodies with regard to the governance structure. Firstly, an inter-
ministerial committee will be set up to coordinate climate policy. A climate action platform will be
established in accordance with Article 11 of Regulation (EU) 2018/1999, which requires Member States to
establish a multi-level dialogue on climate and energy issues. There are also plans for an independent body
to deal with the scientific, ethical and societal aspects of climate policy and the associated challenges.
In accordance with Regulation (EU) 2018/1999, it also sets out the procedure for adopting and updating
the integrated national energy and climate plan, the long-term strategy for reducing greenhouse gas
emissions and the strategy for adapting to climate change.
The second part of the draft law re-enshrines the existing Climate and Energy Fund and adapts it to the
current challenges
12
.
The third part transposes Directive (EU) 2018/410 of the European Parliament and of the Council of
14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-
carbon investments, and Decision (EU) 2015/1814.
Climate action, budgetary and social policy
The budgeting of the measures included in the integrated national energy and climate plan will be in line
with the fiscal path and the rules of the Stability and Growth Pact. National measures are given priority
because of their co-benefits (air quality, jobs). Climate action is one of the most pressing tasks facing
humanity. Accordingly, our national and international climate commitments are also a high priority in terms
of budgetary and fiscal policies. They are important investments for the benefit of future generations.
Measures with a direct impact on public finances will, like all capital expenditure, be subject to multi-annual
budgeting. The Climate Framework Law establishes an inter-ministerial committee to assess the
effectiveness of the measures on a regular basis. This will take into account the ministerial powers
(compétences ministérielles). To this end, the measures shall be subject to a qualitative assessment of their
impact on the national budget in terms of revenue and expenditure and their effectiveness in relation to
national targets for reducing greenhouse gas emissions, improving energy efficiency and developing
renewable energy. This will also take into account the co-benefits (air quality, jobs). It is therefore quite
12
See the section on financing measures below for further details on this point.
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possible that the prioritisation of measures will be adjusted according to their efficiency and that the
respective measures will be replaced or supplemented by more efficient measures, if necessary.
The climate crisis is also a social crisis: vulnerable people are far more affected by the climate crisis than
those in a better position. There is a gap between richer and poorer people, both geographically (North-
South divide) and within societies.
The government is aware that it is taking people with it in the fight against climate change. The climate and
energy plan will only be accepted if there is fair compensation for the more vulnerable groups in our society.
For this reason, the measures of the climate plan will be assessed in terms of social justice and, if necessary,
compensation will be provided for affected citizens. This important principle is also in line with the Climate
Bill and is guiding the government’s climate policy.
The measures in the integrated national energy and climate plan that have already been adopted and are
set down in a law or Grand Ducal regulation are taken into account in the draft budget for 2020 and in the
multi-annual plan.
It goes without saying that the new measures in the integrated national energy and climate plan have not
yet been reflected in the draft budget for 2020, as this law was already deposited in Parliament on
14 October 2019.
Knowing that the implementation of this plan entails expenditure, it is important not to overlook any
revenue that could result from carbon pricing.
The tax measures outlined in the plan will be analysed in detail before their final adoption as part of the tax
reform negotiations.
Minimum price for CO
2
– introduction of the ‘polluter pays’ principle
In addition to the emissions trading scheme for industry introduced more than 10 years ago at EU level,
carbon pricing – a cost-effective tool for reducing greenhouse gas emissions – already plays an important
role in many EU Member States.
Following this model, Luxembourg will introduce a minimum CO
2
price as part of the forthcoming tax
reform and continuously adapt it in line with the objectives of the Paris Climate Agreement. The target
starting price will be the average CO
2
price in our neighbouring countries. For 2021, this means a CO
2
price
of approximately €20 per tonne of CO
2
. This amounts, for example, to approximately 5 cents per litre of
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diesel fuel. An increase of €5 per tonne is planned in both 2022 and 2023. This corresponds to
approximately 1.5 cents per litre of diesel fuel. The further implementing provisions for a dynamic CO
2
price
will be drawn up as part of the preparations for the planned tax reform. This will involve looking into
whether a scaling of the CO
2
price should be introduced.
The socially fair implementation of the CO
2
price will be ensured by using the revenues in a targeted way.
Based on the currently available data, revenues of approximately €150 million can be expected for 2021.
These are used in a balanced way (d’une manière équilibrée) for concrete climate action and targeted social
relief via fiscal (e.g. tax credit) and social justice (équité sociale) measures for low-income households.
Climate support measures
A successful climate policy requires effective measures to reduce emissions. Although everyone has
individual responsibility, climate policy can only be successful if it indicates the direction, creates the
necessary framework conditions and thus offers concrete alternatives to all stakeholders. Therefore,
enhanced incentive mechanisms will be put in place through improved support schemes, which are
explained in more detail in Section 3.1.1.iii.
The PRIMe House support scheme provides investment aid for the energy and sustainable
renovation of residential buildings and related, qualified energy advice, for the construction of
sustainable residential buildings and for the use of renewable energy (PV installations, solar
thermal installations, heat pumps, wood pellet and wood chip heating systems).
In addition to the PRIMe House support scheme, the energy and sustainable renovation of
residential buildings is supported by low-interest or – to help low-income households – interest-
free loans (climate bank).
The ‘Clever fueren’ scheme supports the purchase of electric vehicles, electric motorcycles and
bicycles through direct grants.
The support schemes for improving the protection and sustainable management of forest
ecosystems ensure sustainable timber production, improve the condition of forests and help our
forests adapt to climate change. In this way, the state, society and forest owners together ensure
that we will continue to have stable, healthy, climate-tolerant and species-rich forests in
Luxembourg in the future.
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In industry and small and medium-sized enterprises, the existing instruments will continue to be
used and expanded by the relevant ministries. The voluntary agreement (accord volontaire) and
the energy saving obligation (ESO) will be further developed and continue to serve as important
cornerstones for future efficiency efforts.
With regard to the efficiency efforts of small and medium-sized enterprises, new instruments such
as a de-risking instrument and a transparency platform for audits will be created in order both to
overcome the financing hurdles and to improve the overview and identification of energy efficiency
measures.
In terms of agriculture, climate action schemes (methane strategy, climate check, etc.) are being
drawn up by the relevant ministries.
Social measures
Climate change and the health impact of fossil energy supply affect low-income population groups in
particular. Climate action therefore also provides a tangible contribution to social justice. However, climate
action must also be socially embedded in order to prevent energy poverty.
Luxembourg has a comprehensive strategy for tackling poverty in general (minimum wage, social inclusion
income (REVIS), etc.). In addition, there is a series of measures in Luxembourg offering targeted help to
people affected by energy poverty. The amended laws of 1 August 2007 on the organisation of the
electricity market and on the organisation of the natural gas market stipulate that household customers
who are unable to pay their electricity or gas bills can receive social assistance from the responsible social
welfare office.
For its part, the Law of 18 December 2009 on the organisation of social assistance stipulates that, when
applying the procedures established in the above-mentioned laws on the organisation of the electricity and
natural gas markets, the responsible social welfare office must investigate whether the household
customer is able to pay his or her energy bills and is thus entitled to social assistance.
Particular attention must be paid to housing in the fight against energy poverty, as rising housing prices
have become a major social challenge in Luxembourg. Low-income population groups can often only access
poorly maintained rented accommodation in old buildings with low energy standards. The government is
therefore targeting the creation of affordable housing. Energy efficiency measures in the housing sector
will be designed in a way that simultaneously improves the national energy balance and the living
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conditions of low-income groups. In particular, climate support measures in the housing sector will be
improved with the aim of increasing support for low-income households.
The Luxembourg Government will also work with all relevant stakeholders to develop innovative
programmes, as part of the national long-term renovation strategy to be developed in the coming year,
which will create incentives to renovate old housing while providing housing for low-income households.
It should also be mentioned that there is already a programme in place through the cost-of-living allowance
(‘Allocation de vie chère’), which also counteracts energy poverty. At the same time, the state rent subsidy
can help those in need to face a possible increase in the cost of housing. It should also be pointed out that
the current social assistance legislation stipulates that any person who satisfies the conditions for
entitlement to social assistance is entitled, under defined conditions, to a minimum provision for domestic
energy if he or she is unable to cover the costs of domestic energy.
The enormous amount of investment in infrastructure development and the introduction of free public
transport from 1 March 2020 are certainly not only transport policy measures, but also clearly social measures.
Strengthening EU law and standards
Improved EU standards and regulations facilitate the achievement of Luxembourg’s climate and energy
targets. This is why the government will promote an ambitious climate and energy policy framework at EU
level. In addition to the EU emissions trading scheme, other important climate action instruments originate
at EU level, such as the Regulation on the effort sharing of emission reduction targets among the individual
EU Member States, the Regulation on emissions from land use, land use change and forestry, as well as the
Directive on the promotion of the use of energy from renewable sources, the Energy Efficiency Directive
and the Energy Performance of Buildings Directive. Other instruments include ecodesign requirements for
appliances and the regulation of CO
2
emissions from cars, vans and trucks. Luxembourg will advocate a ban
on the sale of internal combustion engine vehicles at EU level as of 2030.
Government to lead by example
The government will increasingly play a leading role in the use of renewable energy and the improvement
of energy efficiency. It will build on existing programmes and their results, but will also take or develop new
initiatives.
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Ultra-efficient public buildings
The government is developing a strategy for ‘sustainable and energy-efficient public buildings’ in
new and existing buildings to improve sustainability, energy efficiency and the use of renewable
energy in public buildings. It will incorporate the principles of the circular economy and the relevant
health aspects. This includes the introduction of an obligation to install photovoltaic systems on
state-owned buildings, both for new buildings and renovations. This will also be reflected in a
ramping up of the existing photovoltaics programme of the Public Buildings Administration. The
aim is for all suitable public buildings to be equipped with photovoltaic installations by 2025.
The state-owned buildings should become the most efficient in all of the EU Member States. In
order to better assess and improve the environmental performance of existing public buildings, the
mandatory use of the Environment Management and Audit Scheme (EMAS) will be introduced for
the management of buildings in order to minimise the environmental impact of buildings and
continuously improve their performance. EU institutions based in Luxembourg can serve as a
model here.
In addition, the Luxembourg Government is currently developing major housing projects with the
respective state and municipal players (SNHBM, Fonds du logement, Fonds Kirchberg, Fonds Belval,
Agora, Entwicklungsgesellschaft Nordstad). The planning is in the direction of ‘zero CO
2
’, ‘zero
waste’, ‘car free’ and ‘socially inclusive’. These projects provide the basis for a significant part of
the expected population growth in these areas to be climate neutral.
Luxembourg LED 2025 initiative
The government, through its administrations, will completely convert all lighting sources in streets,
public places, buildings, stations and monuments from the existing energy-wasting luminaires to
energy-efficient LED lighting.
Car fleets
In addition to public buildings, the state’s car fleet policy is to be revised with regard to the
purchase and use of official cars, and more efficient fleet management is to be introduced. By the
same token, the share of electric vehicles in the fleet is to be steadily increased.
Sustainable purchasing
Public administrations will make greater use of sustainability criteria when purchasing. The
framework established by the revision of the legislation on public procurement (Loi du 8 avril 2018
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sur les marchés publics) makes it easier to use other criteria than the price component for the
award of contracts. This means that both environmental (life cycle) and social criteria can play a
greater role in procurement. Standardisation of tender criteria for different product groups will
help to leverage public procurement on the markets. In this context, digitalisation will also be
further promoted in order to minimise the use of paper in the long term.
Climate-friendly schools
It is particularly important to focus more on schools and their infrastructures, as young people want
to experience and learn about climate action in practice. The ‘ClimateXchange’ organised with
pupils in spring 2019 gathered together many ideas to reduce the ecological footprint of schools.
In addition to increasing the use of renewable energy sources (both electricity and heat),
sustainable mobility and transport concepts, as well as elements that reduce water consumption,
will be taken into account in planning and in major refurbishment works. It is often possible and
useful to involve the students themselves in the implementation of their ideas. For example, pupils
have already helped to install solar panels on school roofs. In order to make future generations
more aware of sustainability issues, the themes of energy efficiency, renewable energy, climate
change and sustainability will be integrated into the curriculum.
Further developing the climate pact with the municipalities – Climate Pact 2.0
In order to guide and shape municipal climate and energy policy, Luxembourg has an effective and legally
enshrined instrument for climate action in the municipalities (Loi modifiée du 13 septembre 2012 portant
création d'un pacte climat avec les communes) – the Climate Pact (see Section 1.2 – Overview of current
policy situation). In view of an agreement in the coalition agreement 2018-2023, and based on a broad
acceptance by the municipalities, the current climate pact, which will expire in 2020, will be continued and
further developed under the name ‘Climate Pact 2.0’. In order to meet the climate objectives, the climate
pact will evolve over the period 2021-2030 in a targeted way in three areas: strengthening the
quantification approach, improving framework conditions for the municipalities and providing greater
support for the municipalities in their civic work. On the one hand, based on the measures of the climate
pact and in view of the objectives of the integrated national energy and climate plan, more locally relevant
quantitative indicators will be integrated into the climate pact and given greater weight in the overall
assessment. The development of monitoring and communication tools also plays a role in improving the
working framework for municipalities, as does the increased support for municipalities in their civic work.
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The overall aim is to anchor Climate Pact 2.0 even more firmly as a key implementation tool for national
energy and climate policy at local level.
Mobility
Almost two-thirds of Luxembourg’s non-ETS climate emissions come from fuel sales, with two figures
concisely reflecting the atypical situation. Around 70% of the climate emissions from fuel sales come from
motor vehicles registered abroad and the share of lorries is close to 60% of the climate emissions from fuel
sales. Increasing fossil-fuelled truck traffic is not only a climate and health issue, but also a transport
problem for transit countries such as Luxembourg. Tax and excise policies have a significant impact on the
volumes of diesel and petrol sold. This is described in the ‘Tax measures’ section.
Luxembourg will continue to support schemes at national and European level that reduce lorry traffic (e.g.
Eurovignette) and facilitate shifting freight transport to alternative propulsion systems and to rail. In this
context, Luxembourg will also promote the development of a sustainable logistics location and support the
sector’s efforts in this regard. Among other things, existing initiatives to optimise the logistics sector
(Lean+Green) will be further developed in the future. Integrated spatial planning, traffic avoidance and the
consistent development of soft mobility and public transport will reduce the need for individualised car
transport. The remaining cars will be consistently switched from the current ‘fossil’ age (diesel and petrol)
to climate-friendly alternatives (electromobility, hydrogen). This rapid changeover is an essential
contribution to achieving the Luxembourg and European climate and energy targets. The measures for
electromobility are described in detail in Section 3.1.3.iii.
The transport sector therefore plays a particular role in decarbonising Luxembourg’s society and economy.
However, the improvement or optimisation of mobility can only be achieved by introducing many different
measures.
As part of a long-term national mobility plan, the government adopted the sustainable mobility strategy
‘MoDu 2.0’ on 23 May 2018. The basic principles of the 2012 ‘MoDu’ strategy, namely multimodality and
the strengthening of public transport and active mobility, were retained. The strategic objective for 2025
is to improve the flow of traffic at peak times, with 20% more passengers to be transported than in 2017.
The desired modal split on commuting routes should be 46% drivers, 19% passengers, 22% public transport
users, 9% pedestrians and 4% cyclists. In addition, the government will set new targets up to 2035 in its
MoDu 2.0 development programme during this legislative period.
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In addition, ‘MoDu 2.0’:
highlights the progress made since 2017;
contains up-to-date key figures;
sets fixed targets for Horizon 2025;
integrates recent technological advances;
ensures the coherence of new global and national strategies (e.g. Paris Climate Agreement, Third
Industrial Revolution, etc.);
develops a strategy for the creation of a mobility toolbox;
is explicitly addressed to four stakeholders:
o citizens
o the municipalities
o employers and educational establishments
o the state.
As part of the planning of mobility projects, a long-term cost-benefit analysis will be used, which will take
greater account of climate considerations. The MOBIMPACT tool will be used for project planning. A more
multimodal approach will also be put in place for the planning of road-building projects. This includes, for
example, preference being given to public transport and carpooling in new road-building projects.
At company level, a mobility plan or strategy for relocations will be established. It will also raise awareness
about increasing the use of public transport and creating car pools in existing establishments and activity
zones. In addition, the reorganisation of the RGTR network will also improve the coordination of
connections to activity zones.
Technical and financial assistance programmes will be made available to municipalities in order to
implement concrete measures that reduce the carbon footprint. New mobility plans for activity zones and
new municipal mobility concepts will meet predefined criteria in future and will receive technical and
financial support. The new procedures and criteria are intended to promote initiatives that reduce the
carbon footprint in the transport sector (following the Austrian model ‘Klimaaktiv Mobil’). For example, the
following criteria could be integrated into the mobility plans and concepts:
removing P&R from urban centres (transnational cooperation),
improving the combination of public transport and passenger cars,
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providing electric company cars.
As a tool for traffic management (reducing peak hourly traffic and avoiding traffic caused by people looking
for parking spaces) and behavioural management through the availability of parking spaces, a national
parking space strategy is being developed, based on the meaningful design, pricing and use of parking
spaces.
A regulatory framework and new incentives will be created for the development of ‘Mobility-as-a-service’
services. The aim is to provide more support for innovative transport solutions through ongoing
digitalisation. In addition, existing offers (such as the carpooling project CoPilote) will be reinforced or
reinvigorated. The development of a comprehensive mobility app will also be pursued.
In order to promote carpooling, the ‘CoPilote’ portal will be further promoted and targeted cooperation
with employers will continue. In addition, carpooling will be granted further benefits, notably on
motorways, in order to increase the number of passengers per vehicle.
At company level, employees who choose a means of transport other than a car should not be further
disadvantaged. A ‘mobility budget’ tax benefit will be introduced which is equivalent to that for company
cars and thus offers an alternative to the company car. Alternatively, the following measures may form part
of or complement the mobility budget:
car sharing of electric vehicles,
financial or administrative support for the creation of car pools within companies or activity zones,
support for the construction of secure bicycle storage facilities within activity zones,
financial aid to companies for the installation of charging points,
offering zero-emission lease cars.
The creation of such a mobility budget will also involve adapting the regulatory framework to encourage a
transformation in transport within companies. For example, the use of low-emission and zero-emission
vehicles is to be given priority by adjusting the taxation of company vehicles.
Traffic avoidance
In order to avoid traffic, a regulatory framework will be established, in consultation with the social
partners, to promote teleworking and thus also to create modern and flexible working conditions.
To this end, the tax treatment for the use of teleworking by commuters will be adapted and the
current labour and health laws will be amended. Following the example of the current discussions
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with Belgium, negotiations will be launched with France and Germany in order to find an
appropriate tax treatment that favours teleworking by frontier workers. In addition to promoting
teleworking, coworking spaces will also be established in the border area in order to reduce cross-
border commuting. Work on the first such structure is due to start at the beginning of 2019 in Esch-
Belval, with additional structures to be provided preferably along the A1, A3 and A6 motorway axes
and the N31 national road in Rodange.
Consistent development of local public transport
In order to promote public transport, its free use will be introduced on the territory of the Grand
Duchy of Luxembourg on 1 March 2020. However, important infrastructure work and projects will
also continue to be pursued and implemented. The government sees consistent and continuous
investment as an essential precondition for promoting the attractiveness of public transport.
Supply, punctuality and quality of service are crucial in encouraging people to change their habits
and switch from private cars to public transport. The investments in the railway planned between
2018 and 2023 amount to €2,212,000,000. In 2019, the national railway company, CFL, concluded
the largest contract for the procurement of materials in the history of the railway, amounting to
€400 million. The material will be delivered between 2020 and 2023. Tram investments between
2018 and 2023 amount to €390,000,000.
As part of the upgrading of the tramway, the existing tram line will be further extended as planned
and new tram lines will be created taking into account cost-benefit, coherence with multimodal
transport networks, feasibility, etc. In addition, the express tramway project between Luxembourg
City and Esch-sur-Alzette will be further developed and integrated into any further road-building
project on this line.
In order to improve train services, the extension of double or quadruple tracks on existing lines and
the extension or modernisation of existing stations (in particular Luxembourg City and Ettelbruck)
will continue. In addition, comfort on the trains will be enhanced by providing quiet compartments
in 1st class as well as free Wifi, and by increasing capacity on the train routes. In addition to these
infrastructural works, the overall aim is to improve communication and the flow of information to
customers regarding disruptions on the railway network and train delays or cancellations.
Communication and coordination will be improved for customers, especially in the case of
cancellations. To further increase comfort for customers, the coordination between the train and
bus networks is to be continuously improved and adapted to ensure that bus connections run
smoothly even in the event of delays.
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In addition to the rail network, further investment is to be made in the bus network, which will be
constantly expanded and improved. The current reorganisation of the RGTR network will be
systematically continued with the aim of prioritising and optimising the regional bus routes. This
includes optimising the bus network on weekends and public holidays and increasing the frequency
of bus services in the evening hours. In addition, the reorganisation of the RGTR network will also
improve the coordination of connections to activity zones. In addition to organisational
adjustments, however, infrastructural improvements, such as the creation of specific bus lanes on
motorways or express bus lanes on the main axes, are to be continued. In order to increase comfort
for customers, the aim is also to harmonise bus stops and other bus or train lines in terms of
connections, as well as providing a minimum level of equipment (bench seat, display boards, etc.).
In rural areas in particular, the use of dial-a-bus systems with minibuses will increase, avoiding
empty runs outside peak hours and weekends without weakening peak hours capacity.
In addition to the respective projects on the rail and bus networks, the number and capacity of
P&R will be increased, especially in the border area. To this end, an appropriate connection to
public transport should also be ensured, in particular through the measures mentioned above.
As part of the decarbonisation of the bus sector, a gradual replacement of the traditional RGTR
buses by electric buses is also planned. The aim is to analyse the feasibility of the bus routes and
build on the experience of the urban bus operator.
A significant part of the reduction in CO
2
emissions will also be achieved through the broad promotion of
electromobility and the increased use of biofuels. The detailed measures to be taken in this context are set
out in 3.1.3.iii.
Taking responsibility for aviation and shipping
In order to reduce GHG emissions from aviation, the Luxembourg Government supports carbon
pricing at European level. In this regard, Luxembourg, together with Belgium and the Netherlands,
has put forward a proposal to introduce a Europe-wide kerosene tax. Luxembourg will also increase
its support for carbon offsetting measures, for example through the tax deductibility of payments
to government-accredited organisations (e.g. myclimate.org).
The infrastructure of Luxembourg’s international airport is to be made free of GHG emissions. The
airport operator has signed a declaration of the Airports Council International Europe (ACI Europe)
in which it commits itself to reducing CO
2
emissions to net zero by 2050. In addition, hybrid electric
aircraft are to be tested and a new tax regime introduced. Approach charges with a strong
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environmental component will be introduced and the ‘passenger’ charge will be raised to a level
comparable to that at neighbouring airports.
The Luxembourg Government is also committed to a Europe-wide solution to improve the climate
and environmental compatibility of shipping and has submitted or supported a corresponding
proposal at EU level. Improving the energy efficiency and reducing the CO
2
intensity of shipping
would not only protect the climate but also reduce air pollution from ships, including nitrogen and
sulphur oxides (NO
x
and SO
x
) and particulate matter (PM), with positive effects on public health
and the quality of life of European citizens.
The Luxembourg Government is working towards the adoption, as soon as possible, of binding and
effective measures to implement the IMO target – adopted as part of the International Maritime
Organisation’s (IMO) first strategy to reduce greenhouse gas emissions from ships in 2018 – of a
40% reduction in the carbon intensity of shipping by 2030 compared to 2008 in the EU. To this end,
greenhouse gas emissions from international shipping must now also be included in the EU’s
emission reduction commitment under the Paris Agreement and the Commission must assess and
report on the progress made towards reducing them, in relation to European climate and
environmental objectives and the related international commitments, on an annual basis. The
government is open and optimistic about the measures to be announced for the sector by the next
Commission.
The taxation of Luxembourg-flagged vessels (registration fee) will be revised along the lines of the
‘green shipping’ concept.
The building sector
Measures for sustainable construction and building renovation
The building sector (residential and functional buildings) is currently responsible for around 12% of
national climate emissions. This important sector needs a mix of standards and norms, in particular
for new construction, but also targeted support schemes for energy upgrading of existing buildings.
Luxembourg is a global leader in energy standards for new residential buildings, as in 2017 (rather
than waiting until 2021 as permitted by the EU Directive) it became the first country to introduce
the new ‘nearly zero energy standards’ established in 2012. This courageous policy also explains
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why, despite the increase in population and new buildings, the energy requirement for residential
buildings has decreased. This success story now needs to be extended to cover new functional
buildings. Like all other EU countries, Luxembourg still has much to do in terms of energy
renovation. There has been a lot of renovation in Luxembourg, but not enough energy renovation.
Strategy and measures relating to the use of renewable energy and energy efficiency in the building
sector are set out in Chapters 3.1.2. and 3.2. An overview of the financing measures can be found
in Chapter 3.1.1 iii. In the building sector, the PRIMe House support scheme for residential buildings
merits particular mention.
Alternative forms of housing
The government wants to pursue a conscious policy to promote innovative housing concepts, such
as housing for the elderly (intergenerational housing), housing without cars, housing cooperatives
or modular housing. Associated information campaigns, support schemes and pilot projects will be
carried out. The legal framework must be reviewed and adapted to allow this kind of housing to
become established in order to create affordable and high-quality living space:
building and housing cooperatives must be legalised by making the Law on
Cooperatives [Loi modifiée du 25 février 1979 concernant l’aide au logement] more
flexible and adapting the legal framework, so that citizens can be provided with
cheaper housing.
In addition, Luxembourg needs a legal definition of the terms logements sociaux [social
housing] and logements à loyer modéré [affordable housing].
Pacte logement 2.0
The Pacte Logement [housing pact] of 2008 (Loi du 22 octobre 2018 portant sur la promotion de
l’habitat et la création d’un pacte logement avec les communes), which provides municipalities
with, among other things, additional financial resources to create new housing and public
infrastructure, will come to an end in December 2020. Considering the high demand for affordable
housing in Luxembourg, the government has decided to extend and refocus the Pacte Logement.
This pact between the government and the municipalities is to be relaunched under the name
Pacte logement 2.0 and, on the basis of a wide range of measures, will help the municipalities to
achieve important objectives in relation to housing construction and to improve the quality of
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housing available to inhabitants. The focus here is on increasing the supply of housing and the
mobilisation of building land, and improving the quality of housing and energy performance in both
new housing projects and existing ones. The new Pacte Logement will be in force until around 2030
and its structure will be more diverse. Possible elements include improved advice to municipalities
from the Ministry of Housing, providing a housing consultant and promoting various measures
focusing on both the quantity and quality of housing. The range of measures for achieving these
objectives was drawn up in cooperation with the municipalities. The advice provided to
municipalities on implementing larger housing projects is to be improved under Pacte Logement
2.0. to help them strengthen their position as participants in the housing market. This advisory
support covers, in particular, the acquisition and development of land, housing construction
(independently or in collaboration with the private sector), the sale or letting of land and residential
properties, and the management of an inventory of rented buildings. For this purpose, the
municipalities will be provided with a professional consultant on housing construction (housing
consultant). As a general rule, synergies with the Climate Pact and the Nature Pact will be identified
and valorised. Furthermore, the Ministry of Housing will be provided with increased capacity in
order to support the municipalities in creating housing developments.
Spatial planning is becoming more important, including in relation to climate change
Heat map and solar map
Energy investment planning will play a more important role in the climate age. For this reason, the
Energy and Spatial Planning Departments within the Ministry for Energy and Spatial Planning are
working hand in hand to produce two important maps; a heat map to show where our country can,
as a priority, replace housing blocks and entire districts which today run on natural gas or fuel oil
with heating networks which use renewable energies or waste heat from industrial plants or data
centres. A national solar map will also facilitate the planning of large and smaller solar plants.
Eco-district made in Luxembourg
The Luxembourg government is in the process of developing major housing projects with the
respective national and municipal bodies (SNHBM, Fonds du logement, Fonds Kirchberg, Fonds
Belval, Agora, Entwicklungsgesellschafft Nordstad). Planning is moving in the direction of ‘zero
CO
2
’, ‘zero waste’, ‘car free’ and ‘socially inclusive’. These projects provide the basis for a significant
part of the expected population growth in these areas to be climate neutral.
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Bringing together housing, work and leisure
The best energy is energy that is saved, i.e. that never has to be produced at all. The best mobility is
mobility which never takes place. In order to improve planning for the country and its urban areas in
a dynamic economic environment, the government, led by the Ministry for Energy and Spatial
Planning, is working on a new planning strategy for 2035 (programme directeur). This strategy sets
out proposals for where an increased number of residential properties should be built in Luxembourg
in the future (e.g. close to existing or new railway stations), what new transport infrastructure is
needed and which areas must be off-limits as they are key to maintaining biodiversity. The 2035
Planning Strategy will also include concrete proposals for improving cooperation with our border
regions. In order to allow discussion surrounding the drafting of the 2035 Planning Strategy to take
account of fundamental issues, an ideas workshop will be organised for Luxembourg in 2050, based
on the model of the Grand Genève’s ‘competition for ideas’ [concours d’idées].
Economy
The 22 largest industrial CO
2
consumers are subject to the EU Emissions Trading Scheme. In total, industry
was responsible for 50% of electricity consumption and 44% of natural gas consumption in 2018. When
combined with the services sector, these figures rise to around 62% and 83%. Consequently, in addition to
the EU Emissions Trading Scheme, further efforts are needed in relation to the best available technologies,
energy efficiency and renewable energies. This will reduce energy costs and thus make a significant
contribution to competitiveness.
The industrial sector will play an important role in achieving the energy efficiency targets pursued because,
due to its high share of overall electricity consumption in Luxembourg (50%), this sector still has a lot of
savings potential. Therefore, the government will introduce additional measures (e.g. de-risking,
transparency platform for audits, continuing the EEO) to make it easier for those in industry to invest in
energy efficiency themselves or via third parties. The government will also proactively participate in EU
research projects on zero-carbon steel, zero-carbon cement, zero-carbon glass etc.
In Luxembourg, the 2018-2023 coalition agreement provides for the creation of an integrated support
instrument for SMEs, which functions supplementary to the Accord volontaire [voluntary agreement] and
the de-risking instruments (described under 3.2.1.i) and aims to provide the relevant companies with a
support framework for their implementation of energy and climate policies.
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Green Jobs and Climate Solutions made in Luxembourg
Many studies show that climate protection also leads to net creation of jobs. This applies in particular to
countries in which there are now few jobs in coal mines, natural gas fields and on oil rigs.
Investment is needed in Luxembourg in solar plants, wind farms, electric charging columns, energy
efficiency measures in industry and SMEs, developing heating networks, the circular economy and in
particular energy renovation of existing buildings. The government is aware of this, and has introduced
initiatives both in basic training and in further training (formation continue).
Luxembourg should however also be entitled to become a ‘start-up nation’ in the field of climate change.
The pioneering role in key technologies (zero-energy buildings, electromobility, photovoltaics), the
development of energy research and innovation in Luxembourg, and particularly the high level of expertise
in ‘green finance’ create an environment which facilitates assisting existing companies in Luxembourg with
climate protection, and attracting new companies from Europe and around the world.
Important role of the circular economy as a climate protection measure
The circular economy can also help to reduce GHG emissions, beyond the measures described elsewhere.
A 2018 study shows that if a circular economy were to be consistently implemented, European emissions
from heavy industry could be reduced by up to 50% by 2050.
On the basis of the Circular Economy Study (2014) and the Rifkin process, it is important to define the
circular economy in Luxembourg, in order to ensure that all parties from different sectors have the same
understanding. This definition is equally important in order to determine and best support the social
aspects of a transition to a circular economy. A change to a circular economy can only take place
accompanied by a societal shift. Economic concepts which meet this challenge are, for example, the
development of ‘sharing initiatives’ and cooperatives or the upgrading of service offers. Another important
issue in relation to developing a circular economy is promoting a regional focus.
A key aspect of the circular economy is resource management, which is strongly defined by waste legislation. Only
through continued promotion of cascading use can transition from a linear economy to circular value creation be
achieved. It is only possible to establish cascading use if the necessary steps are taken in the design stage to arrange
for the further use or the reuse of resources. The current Waste and Resources Management Plan (2018) already
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sets out targets for, among other things, prevention, recycling and different waste categories. Thus, recycling rates
for packaging are already set at 70% for the year 2022. A review of the legal basis for waste management will
provide the necessary impetus. Other strategic aspects are set out in a ‘Null Offall Lëtzebuerg’ [zero waste
Luxembourg] strategy and a circular economy strategy. Work on the ‘Null Offall Lëtzebuerg’ strategy has already
begun and has been accompanied by public consultations. This strategy aims to transform the current waste
management system into an economy with a stronger focus on resource management.
In addition to these structural measures, companies in particular require support during the transition. In
this context, a material flow analysis will be carried out to identify the flows for which circular and regional
value creation appears possible. In addition, continuous adjustments will be made to the business
environment to promote circular business models.
In addition, the construction sector will be assisted and supported in order to further promote sustainable
construction and the circular economy. In this regard, national criteria will be defined and developed for
sustainable and circular construction in cooperation with the various operators in the sector, with the aim
of creating a database that is also compatible with the BIM working method. In addition, legal and
regulatory measures to ensure implementation of sustainable construction in Luxembourg will also be
analysed. There will be continued efforts to increase timber construction. Due to its potential for cascading
use, the possible regional nature and the reduced climate impact, this building material in particular has
potential which should be further exploited.
Furthermore, sustainable living and ecology and circular economy ideas within urban neighbourhoods will
be supported, for example, by the promotion of sharing economy and urban farming projects.
Lastly, circular value creation will be further promoted in commercial and industrial areas. Important aspects
in this context, which also have a direct impact on greenhouse gas emissions, are the efficient use of energy,
e.g. the use of waste heat, the use of roof surfaces for solar energy or reducing the need for mobility.
Waste and household water management
In the waste sector all measures are listed in the national waste management plan. Additional measures
will be introduced with the new waste regulation. In relation to greenhouse gas emissions, the most
relevant measures here are those which aim to reduce waste production. In particular, the aim is to reduce
food waste by 50% by 2022.
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In the household water management sector, Luxembourg will increasingly find itself confronted with the
problem of sewage sludge. The size of treatment plants and the amount of sewage sludge produced are
increasing with population and economic growth. The government programme anticipates the
implementation of a national strategy to propose sustainable solutions for recovery (energy recovery,
phosphorus recovery, etc.) or removal of sludge. A study is expected to deliver initial results by the end of
2020. The Strategy for Adapting to Climate Change in Luxembourg (2018-2023) also sets out
recommendations for integrating aspects related to climate change into the design of sewerage systems.
The recycling of wastewater will be further promoted and the effective use of grey water (e.g. thermal use)
will be further developed.
Industrial processes and fluorinated gases
Mitigation measures in the field of industrial processes are subject to the EU ETS standards. However,
mitigation measures established as part of the national air pollution control programme under European
Directive 2284/2016 may lead to an additional reduction in greenhouse gas emissions, in particular in the
use of various products such as solvents. Measures in the energy efficiency sector can also lead to additional
reductions in industrial processes.
Reduction measures for fluorinated gases are set out in European Regulation No 517/2014 on fluorinated
greenhouse gases. These include both placing on the market and monitoring the use of various fluorinated
gases, and reducing the quantity of hydrofluorocarbons placed on the market through allocation of quotas
and creation of a register.
Agriculture and forestry
Agriculture and forestry are both actors in and affected by climate change. On the one hand, they directly
influence the development of greenhouse gas concentrations in the atmosphere through release of
greenhouse gases and carbon storage. On the other hand, climate change affects agricultural and forestry
production conditions.
Anticipatory adaptation to climate change should help Luxembourg’s agriculture and forestry sector to
maintain and increase its production and public services in the long term.
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The IPCC Special Report on Climate Change and Land highlights the impacts of climate change observed
across the globe on natural terrestrial ecosystems, land degradation and food security. The frequency and
intensity of some extreme climate and weather events affecting the land surface has increased. The report
illustrates the vulnerability of terrestrial ecosystems and resources and food security to climate change.
Climate change is expected to exacerbate the existing challenges facing land systems, posing serious risks
to livelihoods and the well-being of the population.
All of the reduction trajectories evaluated in the report, which limit warming to 1.5 °C or to clearly below
2 °C, require land-based mitigation measures and changes in land use which remove CO
2
from the
atmosphere. The report also shows that there are many land-based mitigation measures which do not
compete with land use (such as sustainable agricultural practices and agroforestry) and have potential
added benefits. A change in eating habits and reduction of food waste and loss could also reduce pressure
on the land, while contributing to the eradication of poverty and improving health and hygiene. However,
the report also emphasises that the use of large-scale land-based solutions (such as bioenergy with carbon
capture and storage, and reforestation), if applied on a large scale and in a non-sustainable manner, can
increase pressure on the land and food security.
Agriculture
In line with the aforementioned IPCC Special Report, a first set of measures has been identified for
reducing GHG emissions in agriculture by reducing the use of nitrogen-containing fertilisers, and in
some regions even promoting the elimination of nitrogen-containing fertilisers altogether. These
measures include agri-environmental measures defined under the EU’s Common Agricultural
Policy (CAP) and incorporate programmes to reduce nitrogen fertilisation on arable land and
grassland, but also the non-fertilisation of, for example, flower borders and field margins.
A second set of measures concerns the use of organic manure and mineral nitrogen fertilisers.
These are implemented as part of the agri-environmental measures and the NEC Directive and
include promoting environmentally friendly techniques for spreading manure, the ban on splash
plates from 2025 and the ban on open new slurry or biogas slurry containers, with support available
for covering existing open containers. These measures also all lead to a reduction in GHG emissions.
There will be further promotion of biogas as an energy source in the interests of the circular
economy. As explained in more detail under 3.1.2.i., organic manure of animal origin should be
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used as a priority in biogas plants, in order to concurrently reduce methane emissions. The coalition
agreement provides for the drafting of a strategy to reduce methane emissions.
A number of interventions under the agri-environmental measures, the Agricultural Biodiversity
Action Plan and the Water Protection Act will lead to extensification of agricultural land use, in
particular in sensitive areas, but also by promoting the grazing of dairy cows. Furthermore, the
coalition agreement anticipates that at least 20% of agricultural land will be subject to organic
cultivation by 2025 (and 100% by 2050), which will contribute to extensification of agricultural use.
In addition, greening measures and the landscape conservation premium will also help to reduce
GHG emissions. Overall, agriculture should remain land-dependent.
Further development of advice and diversification of the consultancy modules on offer, which
promote climate-friendly, climate-resilient, environmentally friendly and economical crop and
animal production, is another measure which will help to reduce GHG emissions. In this sense, any
major agricultural investment project financially supported by the State will in future be subject to
an economic, social, ecological and energy-related analysis. Furthermore, sustainability checks will
be introduced for agricultural holdings. There is also a need to increase knowledge about climate
change and agriculture and to promote innovation through relevant research projects relating to
Luxembourgian agriculture.
Preventing food waste makes a key contribution to reducing emissions. The ‘Antigaspi’ [anti-food
waste] campaign must be continued and intensified in order to prevent waste along the entire food
chain.
In addition to forestry, the agricultural sector also provides a carbon sink which absorbs CO
2
from
the atmosphere and is therefore vital to achieving the objectives of the Paris Agreement. A
research project will draw up the necessary guidelines to specifically encourage the development
of humus as a carbon sink. In this area, the existing ban on ploughing permanent grassland in
sensitive areas and the promotion of reduced tillage and cover crops should be pointed out. The
crop diversification obligation under the agri-environmental measures and greening are other
measures which increase carbon sinks. Agroforestry would have a positive impact here.
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Forestry
All relevant forestry measures have been listed in the national forestry accounting plan (Regulation
(EU) 2018/841). These include, in particular, the protection of existing woodland, sustainable forest
management and the designation of semi-natural forests. Based on these already existing
measures, a reference value has been established for forests which serves as a basis for accounting
rules in the forestry sector. These existing measures will be maintained in order to record zero
emissions in the forestry sector.
New subsidies will be introduced in relation to increasing semi-natural and climate-resilient forest
management. Reforestation measures and steps to increase the volume of wood in forests will be
taken to increase CO
2
sinks. Furthermore, increased use of wood products in the construction
sector and improved cascading use of wood will prolong the CO
2
storage effect.
Taxation measures
Energy and environmental taxes in Luxembourg are low in comparison to Europe and its neighbours. This
poses various challenges in relation to climate and energy policies. The government is aware of this, and
the coalition agreement accordingly states that the government will develop and implement a predictable
and coherent tax policy which will provide adequate responses to the realities and challenges of family,
social, economic and environmental policy.
As part of the tax reform planned in this regard, energy and resource taxation, including the described
minimum CO
2
price, will be revised to incorporate the treatment of non-sustainable tax privileges
detrimental to the climate. This will also take into account the findings and recommendations of the
ongoing study ‘Effects of subsidies and tax incentives on sustainable development – environmentally
harmful subsidies in Luxembourg’.
13
The social fairness of an energy and resource taxation reform is a prerequisite for its success. The coalition
agreement states in this regard that revenue from an increase in energy taxes is to be used to finance the
social efforts necessary to create ecological change, which should at the same time be socially just.
13
The study ‘Effects of subsidies and tax incentives on sustainable development – environmentally harmful subsidies in Luxembourg’ is explained
in more detail in Chapter 3.1.3.iv.
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Fuel taxation
The government is aware that Luxembourg can only meet its climate and energy targets if
enhanced measures are taken in relation to fuel sales in general and in particular in relation to fuel
exports to HGVs. This is because, according to the Paris Agreement and the detailed EU framework
legislation, CO
2
emissions are recorded where the fuel is sold. The fuel prices for diesel and petrol
in Luxembourg are cheap in comparison with neighbouring countries. Price differences with
neighbouring countries must thus be gradually reduced in order to reduce fuel exports. In this
connection, it will also be necessary to reduce the dependency of public finances on fuel sales and
to avoid supporting false price signals which lead to an increase in fossil-fuelled HGV traffic.
Revenue that is incompatible with the objectives of the Paris Climate Agreement will be
relinquished.
It was decided in the coalition agreement to adjust taxation of mineral oil products, in particular
fuels, to bring it into line with the objectives of the Paris Climate Agreement. An initial increase in
excise duties on diesel (+2 euro cents per litre) and petrol (+1 euro cent per litre) was introduced
on 1 May 2019.
An inter-ministerial committee (finance, environment, energy, economy) monitors and analyses
trends in the sale of fuels and the impact of the new measures proposed by the government. With
regard to achieving climate targets, under the coalition agreement the committee will also identify
measures for steadily reducing the impact of the sale of fuels on Luxembourg’s greenhouse gas
balance and will regularly propose adjustment measures to the government. Care will be taken to
reduce the unjustified preference for diesel over petrol in the event of any future increases.
In addition to the taxation measures, there are also instruments that could contribute to reducing
fuel exports. For example, aspects relevant to climate change must be enshrined in motorway
service station licences and, at the same time, police checks on HGVs at motorway exits must be
increased, and carried out with greater cooperation from the municipalities, in order to prevent
transit fuel traffic placing an increasing burden on our towns and villages.
Vehicle taxation
Although the vehicle tax for vehicles in category M1 registered after 1 January 2001 is calculated
according to CO
2
emissions (according to the EU Conformity Certificate) and fuel type, their current
steering effect is low.
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Therefore, the vehicle tax will be revised to take account of the polluter pays principle. The revised
vehicle tax will exclusively apply to vehicles which are registered after a date yet to be determined.
The current tax regime for company cars (40% of all new cars sold in Luxembourg) provides an
incentive for both employers and employees to purchase and use these cars. Since 1 January 2017,
the financial benefits to the employee have been calculated on the basis of CO
2
emissions per
kilometre and are thus intended to encourage selection of lower-emission vehicles.
The coalition agreement also provides for further revision of the financial benefits of company cars,
with the aim of promoting electromobility through this route. In addition, employees who choose
a means of transport other than the car should not be further disadvantaged. The introduction of
a ‘mobility budget’ tax benefit will be considered, equivalent to that for company cars. This will
facilitate workers’ access to LPT mobility, active mobility or car-sharing services.
Taxation of fuel oil and natural gas
Taxation of fuel oil will be gradually increased as part of the aforementioned tax reform, taking into
account the described minimum CO
2
price, in order to encourage the shift towards renewable,
comparatively climate-friendly heating. In order to ensure that this measure is socially just, an
attractive support scheme for oil heating exchange will be introduced. In this connection, the
competent ministries will analyse the impact of increasing the cost of fuel oil with the public subsidy
from the Allocation de vie chère [cost of living allowance] and, if necessary, adjust the effectiveness
of this premium, as well as respecting the technical feasibility.
Further taxation measures
To promote the circular economy and tackle excessive consumption of resources, the government
will consider applying the super-reduced VAT rate of 3% to eligible repair work under European law.
The government will also explore opportunities to introduce tax incentives for natural persons
investing in sustainable development, climate protection and energy transition. The benefits of such
investments will be proportionate to the taxable income and the risks taken by the taxpayer
concerned.
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3.1.1.ii. Any regional cooperation in this area
Within the framework of the Pentalateral Energy Forum (DE, FR, BE, NE, LU, AU, CH), Luxembourg will
prioritise action in the following areas:
A shared vision for a decarbonised electricity system in western Europe by 2050
initiating cross-border cooperation in the field of renewable energy
integrating electromobility options and services without regional constraints
Exploring options for CO
2
pricing and its cross-border impact on electricity prices.
These issues have already been further discussed in Chapter 1.4.
3.1.1.iii. Without prejudice to the applicability of State aid rules, financing measures, including
Union support and the use of Union funds, in this area at national level, where applicable
Climate and Energy Fund
The Climate and Energy Fund (Loi modifiée du 23 décembre 2004 1) établissant un système d’échange de
quotas d’émission de gaz à effet de serre; 2) créant un fonds de financement des mécanismes de Kyoto) on
the one hand finances governmental and semi-governmental projects in the areas of climate action and
renewable energy at national level and on the other hand is used for international climate financing. The
Fund is fed from three sources:
a proportion of the fuel tax (3.5 euro cents per litre of diesel and 2.5 euro cents per litre of petrol,
since the increase in excise duties of 1 May 2019 (see Chapter 3.1.1.i.))
40 % of the vehicle tax revenue; and
national auction proceeds from EU emissions trading.
The future climate law (see Chapter 3.1.1.i – introduction of a climate law) will again enshrine the Climate
and Energy Fund in law and adapt it to current challenges in line with the Paris Climate Agreement. This
will lead to adjustments in terms of both expenditure and revenue. The Climate Pact for municipalities is
to be funded by the Climate and Energy Fund.
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Environmental fund
The environmental fund (Loi modifiée du 31 mai 1999 portant institution d’un fonds pour la protection de
l’environnement) is used to support communal projects in the areas of climate action, energy efficiency and
renewable energy, as well as the waste sector and nature conservation. It subsidises energy concepts,
energy renovations, communal buildings, energy-efficient new construction, renewable heat and power
generation (photovoltaic installations, solar thermal installations, heat pumps, biomass heating plants and
combined heat and power plants), communal heating networks based on renewable energy and waste heat
and converting street lighting to LED technology, among other things. The kinds of project eligible and the
associated eligibility criteria are regularly updated and adapted to technical and economic development as
well as climate and energy objectives.
PRIMe House housing support scheme
The PRIMe House support scheme (Loi du 23 décembre 2016 instituant un régime d’aides pour la promotion
de la durabilité, de l’utilisation rationnelle de l’énergie et des énergies renouvelables dans le domaine du
logement) offers investment aid for the sustainable energy renovation of residential buildings and
corresponding qualified energy consultancy, for the construction of sustainable residential buildings and
for the use of renewable energy (photovoltaic installations, solar thermal installations, heat pumps, wood
pellet and wood chip heating systems). The support scheme has been extended and reviewed a number of
times since 2001. The current programme runs until the end of 2020.
Regarding the continuation and further reinforcement of the programme, the following aspects will be the
focus of further development:
Checking and, if necessary, adjusting the amounts of support
Integrating additional sustainability criteria, in particular to promote the circular economy
Including criteria to reduce health risks in residential buildings
Developing eligibility criteria for energy efficiency in listed buildings, in coordination with existing
support schemes run by the National Sites and Monuments Service.
Further administrative simplification, for example by increasing the digitalisation of the application
procedure and optimising quality control (relationship between quality improvement and intensity
of controls)
An inter-ministerial working group is responsible for monitoring and further developing the support scheme.
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In addition to the further development of PRIMe House, the criteria for the Luxembourg sustainability
certification for residential buildings (Lëtzebuerger Nohaltegkeets Zertifizéierung – LENOZ) will also be reviewed:
The certification is to be generalised.
A selection of LENOZ criteria is to be progressively introduced as compulsory and promoted, and
then gradually phased out from PRIMe House support.
Climate loans for residential buildings
In addition to the PRIMe House support scheme, the sustainable energy renovation of residential buildings
is supported via low-interest or (for low-income households) interest-free loans (Loi du 23 décembre 2016
relative à un régime d’aides à des prêts climatiques), with the technical requirements being the same as
the PRIMe House criteria.
There are plans to review and simplify the terms and conditions and application procedure, so that more
homeowners can benefit from a climate loan in the future.
‘Clever fueren’ [drive smart] support scheme for electric vehicles
As regards increased promotion of electromobility, the tax incentives for electric vehicles in effect until the end
of 2018 were replaced by direct subsidies on 1 January 2019 (Règlement grand-ducal du 7 mars 2019 portant
introduction d’une aide financière pour la promotion des véhicules routiers à zéro ou à faibles émissions de CO
2
).
Passenger cars, vans, motorcycles and bicycles are subsidised via the ‘Clever fueren’ scheme. All-electric
vehicles, plug-in hybrid vehicles (≤ 50 g CO
2
/km) and hydrogen-powered fuel cell vehicles are eligible.
The support scheme was continued in 2020. The subsidy for plug-in hybrid vehicles is due to end in 2021.
Subsidy schemes and financial incentives for businesses
Under Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid
compatible with the internal market in application of Articles 107 and 108 of the Treaty, the Luxembourg
government can provide direct investment aid in the fields of environmental technologies and innovation
for businesses (both SMEs and also larger companies). The Ministry of the Economy is responsible for
granting the aid, supported by the innovation and research agency Luxinnovation (Loi du 15 décembre 2017
relative à un régime d’aides à la protection de l’environnement; Loi du 17 mai 2017 ayant pour objet 1) le
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renouvellement des régimes d’aides à la recherche, au développement et à l’innovation; 2) les missions de
l’Agence nationale pour la promotion de l’innovation et de la recherche; et modifiant la loi modifiée du 5
juin 2009 relative à la promotion de la recherche, du développement et de l’innovation).
In addition, SMEs can also apply for funding through a special government support scheme.
To support companies’ efforts and to accelerate the energy transition, the following aspects will be the
focus of further development:
Increased promotion of aid schemes by providing companies with better information
Simple and transparent communication of the measurable benefits of support schemes
Simplifying the eligibility conditions, in coordination with national and European law
Accelerating administrative simplification, in particular through increased digitalisation
More resources for the support scheme directed at SMEs
Enhanced efficiency through a combination of support schemes for SMEs and larger companies
The existing support schemes will be reviewed.
3.1.2.
Renewable energy
The Luxembourg government would like to accelerate the push for renewable energy with a target of 25% by 2030,
and supports further development through investment aid and subsidies for private individuals and businesses.
Wind power, as one of three key technologies for Luxembourg (wind, solar, biomass), surpassed the expectations
of the NREAP in 2009 and continues to be financed accordingly. There will be a fresh attempt to instigate
widespread use of photovoltaics (recently, development has almost stagnated). For biomass, priority will be given
to improving cascading or multiple use (round timber for sawmills for use in furniture and construction, used and
residual wood for particleboard plants, waste and scrap wood for cogeneration installations) and sustainability
criteria (including procuring wood from the Greater Region in principle or within a radius corresponding to the
Greater Region). In addition, new options, such as geothermal energy, will be further explored and promoted.
Luxembourg’s aim is to become a proactive player in the energy transition, involving its whole population. In
addition to the expansion in Luxembourg, the government will also actively participate in renewable energy
development in Europe, through the instruments provided for in the new Directive 2018/2001 on the promotion
of the use of energy from renewable sources. The following points will be implemented:
In order to increase investment in renewable energy, new incentives will be introduced, such as
increasing feed-in tariffs for photovoltaic installations, regular calls for tender for large installations
and the removal of current barriers.
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In general, Luxembourg will promote the expansion of renewable energy production at European
level and will not support new projects based on fossil fuels or the development of fossil fuel power
plants. By 2050, 100% of the energy supply in the EU should come from renewable energy sources.
3.1.2.i. Policies and measures to achieve the national contribution to the binding 2030 Union target
for renewable energy and trajectories as referred to in Point (a)(2) of Article 4, and, where applicable
or available, the elements referred to in Point 2.1.2 of this Annex, including sector- and technology-
specific measures.
Wind energy
A large proportion of renewable energy production in Luxembourg already comes from wind power
(installed capacity in 2018: 123 MW from 69 installations). At present, around 10 wind farm projects, some
of which have already undergone the strategic environmental assessment and other required impact
studies, are in the development and finalisation phase for 2020 and are expected to produce electricity for
around 50,000 additional households per year.
The existing feed-in payment/market premium will be continued and existing barriers will be removed
where possible. The possibility for municipalities and citizens to make a financial contribution will also
remain a key development factor. In the past, this has ensured a very high level of acceptance for wind
power plants among the population and will continue to do so.
Solar energy
Due to its strong potential and multiple direct uses, solar power plays a key role in the country’s energy mix
and will be developed even further in the coming years. As regards photovoltaics, Luxembourg is currently
in 6th place in the European Union in terms of installation capacity per inhabitant, with a total of 6990
photovoltaic installations (2018). The government’s aim is to reach the top of this ranking by 2030.
Feed-in tariffs
The increase in feed-in tariffs in 2019 aims to maximise the use of building roofs (and other
sealed/non-agricultural areas) in Luxembourg to fit photovoltaic installations. Attractive feed-in
tariffs for small installations up to 10 kW should allow all households to fit their own installation,
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including with a view to later self-consumption. As previously, co-operative installations will be
supported separately. Every citizen will have the opportunity to take part in the energy transition.
After the introduction of a new category, collective installations in the range of 30 to 500 kW can
now benefit from a feed-in tariff. Municipalities will be encouraged to make their roof areas
available to cooperatives. More than 100 of these large ‘solar power plants for the people’ are
currently in the pipeline.
Calls for tender
In order to speed up the expansion of photovoltaics in Luxembourg, a call for tender for large
photovoltaic installations (≥ 500 kW) was launched for the first time in 2018. The contract was
awarded to 15 MW capacity on buildings and industrial areas/landfills. The second call for tender
over 40 MW took place in autumn 2019 and now provides a specific category for carports, among
other things. It also permits installations between 200 and 500 kW.
On the basis of the results and analyses of both these calls for tender, a multiannual plan for calls
for tender will subsequently be published in 2020, in which the volumes offered for tender will be
successively increased each year in order to achieve the targets in the photovoltaics sector.
Self-consumption
The inclusion of self-consumption concepts (in conjunction with energy storage) and energy
communities will play a new, specific role in the PV sector. Both concepts, as provided for in
Directive 2018/2001, have already been enshrined in a legislative amendment (on the electricity
market), allowing accompanying measures and support measures to be implemented quickly.
The ‘30-200 kW’ category for self-consumption will be specifically targeted in the overall
photovoltaics approach – attractive tariffs for small installations, special categories for
cooperatives for citizen participation, calls for tender for larger and major installations from
200/500 kW – in order to create incentives for SMEs and office buildings.
Solar map
The coalition agreement (2018-2023) provides for the creation of a national solar map for
Luxembourg. Up to now, such a tool has only been available at municipal level in some cases, for
example in the capital city. The development of a solar map provides a decision-making tool in
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relation to solar energy and helps to recognise and exploit existing potential in terms of private
photovoltaic installations, energy cooperatives and public calls for tender. Furthermore, the map
can be used by network operators and administrations to help them optimise the integration of
solar installations into the network.
The map, which should be complete by the end of 2020, should facilitate more efficient planning.
This tool will take account of the type of roof (flat roof, etc.) and the heights of buildings, so that
citizens/company only need to click on their roof in order to obtain an initial assessment of whether
it would make sense to install photovoltaics. The map is intended to serve as a planning and
management tool for administrations in relation to larger areas (along roads, old industrial or
landfill sites, possibly later free agricultural space).
Heat pumps
Heat pumps are stated as the reference technology for new buildings in the improved thermal insulation
regulations for residential and service buildings. It is estimated that the use of geothermal energy in
connection with heat pumps has an achievable potential of around 180 GWh/a. Heat pumps are a highly
versatile technology for using renewable energy and energy efficiency technologies and have proved to be
particularly effective heating systems in well-insulated buildings. The government intends to continue to
promote and develop this technology by means of financial aid (see Chapter 3.1.1.iii) and an improved
information policy (e.g. updated restriction map via Geoportal).
Medium-depth geothermal energy
Potential for exploiting medium-depth geothermal energy will be more systematically identified and more
consistently taken into account in relevant project areas. The aim is to reduce the existing uncertainties
and risks and to promote increased use of geothermal energy in suitable locations. The main focus here is
on the area around Düdelingen and Esch-sur-Alzette.
Biomass
In recent years, use of biomass has predominantly been promoted in cogeneration plants. The new
Directive 2018/2001 provides sustainability criteria for the use of biomass in large plants (> 20MW). On this
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basis, the Luxembourg Government intends to set stricter requirements in relation to sustainability criteria
for new plants in future, and therefore plans to extend the European sustainability criteria for biomass use
in cogeneration plants to smaller installations. Plants with a rated electrical output over 10 MW which use
biomass or used and residual wood as an energy source must comply with these sustainability criteria in
order to receive a feed-in tariff/market premium. In addition, it will also be ensured that the objectives of
Directive 2016/2284 on the reduction of national emissions of certain atmospheric pollutants remain
achievable, through the use of suitable technology.
The stated objective is for biomass for energy production to be sourced from the Greater Region or within
a radius corresponding to the Greater Region. More detailed provisions will be set out when the
sustainability criteria are developed. In general, the cascading use principle should become more firmly
entrenched in relation to the use of wood. The Luxembourg Government is considering creating its own
sustainability label, which could be linked to the ‘Holz vun hei’ [locally sourced wood] label. In addition, the
draft code forestier [forestry code] law also sets out better sustainability criteria for national forestry.
Biogas
Biogas continues to be a pioneering energy source (electricity, heat, supply). The framework conditions
need to be revised in order to better promote biogas and to better take account of the not insignificant
environmental and water protection issues (methane, NH
3
emissions, nitrate, phosphorus). Part of the
reform will involve adjustments to state aid to better recognise the non-energy related benefits of the
sector. The government is setting very clear priorities, including in relation to the circular economy, the
recovery of slurry, manure, biowaste and other residues. The biogas strategy is therefore also part of the
methane reduction strategy. Currently, only slightly more than 10% of the theoretically available slurry is
used for energy purposes (13.6% in 2018). The use of renewable raw materials is restricted. Biogas
produced will be fed into the gas network as a priority.
To this end, a technical and economic analysis was commissioned to determine the potential of biogas and
the implementation of all of the above factors. In view of the scarcity of land in Luxembourg, the 2030
renewable energy targets and the results of the study, the Ministries concerned (energy, environment and
agriculture) will work closely together to define the future role of agriculture in energy production and
specifically in relation to biogas and photovoltaics.
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Government to lead by example
As already mentioned under 3.1.1, Luxembourg has adopted a strategy for ‘sustainable and energy-efficient
public buildings’ in relation to new construction and existing structures, in order to improve energy
efficiency and the use of renewable energy in government and government-related buildings. This includes
the introduction of an obligation to fit photovoltaic installations on government and government-related
buildings, for both new and renovated structures. This should also be reflected in an improvement to the
existing photovoltaics scheme run by the Administration des bâtiments publics [Administration for Public
Buildings]. The aim is for all suitable public buildings to be equipped with photovoltaic installations by 2025.
In addition, better integration of photovoltaic installations and increased use of renewable heat, in
particular based on medium-depth geothermal energy, will be promoted in schools and their
infrastructures.
Army barracks to go green
It has already been decided that the infrastructure on the Herrenberg will be extensively renovated
into an ‘energy autonomous zero CO
2
’ area. The houses will be renovated, solar energy will be
installed on many rooftops and the heating network will be switched to renewable energy. Many
army vehicles will also be examined to see if they can run on electricity or hydrogen. Through smart
energy management, the entire area will then be largely self-sufficient in terms of energy.
Hydrogen
The production of hydrogen, which is mainly used in industry, is today largely based on fossil fuels, primarily
gas and what is known as gas reformation. In order for hydrogen to play its part in decarbonisation,
renewable hydrogen or ‘green hydrogen’ must be produced by electrolysis of demineralised water using
renewable electricity (photovoltaics or wind power). This low-emission or zero-emission hydrogen can be
used in many fields, including in industry, in transport or even in energy storage (it is primarily suitable for
seasonal storage of renewable energy).
There are plans to construct a hydrogen refuelling station. A key factor is the certification and supply of
‘green hydrogen’ which is an essential condition for commissioning.
Committees such as the Pentalateral Energy Forum or Hydrogen Europe also take this position.
Luxembourg will contribute to a Europe-wide network of hydrogen refuelling stations. To enable longer
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journeys within Europe, in particular in the trucking and logistics industry, locations along or on the
motorways are the most logical. Studies in this regard are currently being prepared.
Hydrogen can also play an important role in reducing CO
2
emissions, in particular in the steel and cement
industries. Companies in Luxembourg specialising in steelworks construction are already active in this field.
Looking ahead to 2030, hydrogen can play a crucial role in energy supply and in sector coupling for the
electricity, heat and transport sectors, in particular if energy losses in production and conversion through
electrolysis are improved and the effectiveness of fuel cells developed for use in transport is increased.
Luxembourg intends to work closely with other EU Member States in this area.
A hydrogen strategy for Luxembourg is currently being prepared as part of the European Green Deal and a
future European hydrogen strategy. The H
2
strategy for Luxembourg will analyse potential in the following
areas:
- How substantial is the current and future demand for hydrogen?
- Is it possible to produce renewable hydrogen in Luxembourg, and if so, how much? Alternatively,
how can the importation of hydrogen be arranged?
This analysis will examine, in particular, potential in the transport, industrial and renewable energy sectors
(production – flexibility – storage – recovery).
A future hydrogen economy will operate across borders, and it is therefore essential to have discussions at
various levels with neighbouring countries and EU Member States. The Ministry of Energy and Spatial
Development is currently preparing an initial strategy document for Luxembourg, in close cooperation and
frequent discussion with interested parties from the scientific community and from industry.
Innovative funding instruments for renewable energy
Luxembourg’s financial centre is already home to a considerable number of investment funds which invest
in renewable energy globally. The Luxembourg government is currently considering setting up a ‘de-risking
fund’ for renewable energy. In 2018, Luxembourg’s legislation relating to mortgage bonds was extended to
cover a form of financial instruments secured by ‘renewable energy’ projects. It was the first financial
centre in the world to do anything of the kind.
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Luxembourg intends, together with the EIB, to promote a de-risking instrument for long-term renewables
power purchase agreements (PPA) at European level as well. This will make green electricity contracts
cheaper for industry and for SMEs. During the last legislative period, the Luxembourg Finance Centre
became a pioneer in matters of sustainable finance. Luxembourg will continue to be very active in this area,
for example by supporting the Luxembourg-EIB Climate Finance Platform and the International Climate
Finance Accelerator-Luxembourg (ICFA). On an international level, Luxembourg participates in the UN’s
GCF (Green Climate Fund) and the Network of Financial Centers for Sustainability. Luxembourg also
promotes renewable energy through development cooperation. Luxembourg is a member of the
International Renewable Energy Agency (IRENA) and has applied to join the International Solar Alliance
(ISA).
Monitoring tool and financial measures for businesses
In order to increase companies’ investment in renewable energy and energy efficiency measures, financial
incentives will be reviewed and further developed. The associated strategy and measures for creating a
monitoring tool and reviewing financial incentives for companies in relation to renewable energy can be
found in Chapters 3.1.1.i. Economy and 3.1.1.iii. Funding measures.
PRIMe House support scheme
Strategies and measures relating to the national support scheme PRIMe House and the associated implicitly
required use of renewables are set out in Chapter 3.1.1.iii.
3.1.2.ii. Any specific measures for regional cooperation, as well as, optionally, the estimated excess
production of energy from renewable sources which could be transferred to other Member States
in order to achieve the national contribution and trajectories referred to in point 2.1.2
Cooperation mechanisms (statistical transfers, joint projects, etc.)
Luxembourg also wants to contribute to the development of renewable energy abroad. As stated in
Directive 2009/28/EC and in the NREAP, Luxembourg needs to use cooperation mechanisms in order to
achieve its 2020 targets. Luxembourg has made various efforts in the past to explore and promote possible
methods of cooperating with different countries. In 2017, Luxembourg became the first Member State to
enter into two statistical transfer contracts with Lithuania and Estonia. Both agreements include the
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mandatory transfer of minimum quantities and the possibility of carrying over quantitative limits for the
period 2018-2020, which is a clear indication of enhanced European cooperation in the field of renewable
energy.
In this sense, the Luxembourg government intends to continue to rely on cooperation mechanisms in the
future. The new Directive 2018/2001/EU continues to build on existing cooperation mechanisms (statistical
transfers, joint projects and shared support mechanisms) and also provides for new methods of
cooperation: the Union renewable development platform (URDP) and the Union renewable energy
financing mechanism.
Statistical transfers will continue to play a certain role. The cooperation should, however, also be further
developed and involve specific projects. The specific framework for this is the Benelux and/or the North
Seas Energy Cooperation, but also the Pentalateral Energy Forum (Germany, France, Benelux, Austria,
Switzerland). Luxembourg intends to participate in the Union renewable development platform (URDP) and
also has a strong interest in the establishment and functioning of the Union renewable energy financing
mechanism enshrined in Article 33 of the European Regulation 2018/1999/EU.
The European Commission will establish this financing mechanism by 1 January 2021, to tender support for
new renewable energy projects in the Union. It is anticipated that this financing mechanism will support
countries in implementing the development of renewable energies towards the EU target and will have the
potential to improve investment conditions for renewable energy across the EU.
Luxembourg has already made some efforts in the past to launch a joint tender with another country in the
renewable energy sector. Due to its complexity, this project did not come to fruition. This is another reason
why Luxembourg supports the introduction of this European instrument, which is a move towards a
European tendering process, and will actively participate in the first steps towards its implementation.
3.1.2.iii. Specific measures on financial support, where applicable, including Union support and the
use of Union funds, for the promotion of the production and use of energy from renewable sources
in electricity, heating and cooling, and transport
The main support schemes in this area are already listed under 3.1.1.iii. The most important support
schemes are mentioned again here:
The PRIMe House support scheme offers investment aid for the use of renewable energy (photovoltaic
installations, solar thermal installations, heat pumps, wood pellet and wood chip heating systems). The
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support scheme has been extended and reviewed a number of times since 2001. The current
programme runs until the end of 2020.
The environmental fund is used to support communal projects in the areas of climate action, energy
efficiency and renewable energy, as well as the waste sector and nature conservation.
Passenger cars, vans, motorcycles and bicycles have been supported through direct subsidies via the
‘Clever fueren’ scheme since 1 January 2019.
3.1.2.iv. Specific measures to introduce one or more contact points, streamline administrative
procedures, provide information and training, and facilitate the uptake of power purchase agreements
The ministries and administrations concerned are currently discussing how to set up this contact point.
3.1.2.v. Assessment of the necessity to build new infrastructure for district heating and cooling produced
from renewable sources
Low-temperature heating networks
In order to comply with Article 14 of Directive 2012/27/EU on energy efficiency, a study assessing the
potential for use of high-efficiency cogeneration was published in 2016. This study assessed the potential
of the heating network supply and revealed that a significant proportion of the co-generation potential is
already being exploited in the building sector. However, there is still potential to further develop the
current situation in the future. Mainly as a result of the high energy standard for buildings (NZEB for
residential buildings since 2017), the Luxembourg government expects a high number of potential heating
and cooling uses for low-temperature heating networks. These low-temperature networks will in future be
supplied predominantly from environmentally friendly sources (deep geothermal energy, heat pumps,
waste heat from industry and data centres, solar thermal installations), insofar as this is economically
viable. High potential, particularly in the field of geothermal energy, is expected in the south of the country.
The opportunities for using medium-depth geothermal energy for heating networks to supply residential
areas, schools and sports complexes are currently being studied more closely. In this context, myenergy, in
cooperation with the Luxembourg Geological Service and a research institute, is launching a project to
improve the data currently available, to more accurately assess the geothermal potential in Luxembourg
and to provide scientific support for construction projects currently planned.
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Heat map
The creation of a web-based heat map will increase transparency on the heat market by means of an
integrated analysis and presentation of the relevant data in this connection. The main focus is on illustrating
the heat demand and heat supply in the territory of Luxembourg, which can be used to, inter alia, prepare
and further develop heat strategies at regional and national level. However, the tool will also be used by
the municipalities as part of the Climate Pact, for example to implement energy planning or general
accounting within the Climate Pact. However, existing heating networks will also be represented and an
assessment of potential energy recovery (i.e. sewage sludge drying) will also be carried out. There are also
plans to map the energy sources used to produce heat and the share of heat they produce.
Additionally, a hot-spot analysis will make it possible to identify larger renovation areas and possible
synergies at industrial level. The economic viability of potential projects for planners and companies will be
better assessed using relevant indicators. This is expected to increase energy efficiency for companies,
SMEs and in residential areas. These hot-spot analyses will also include an assessment of the use of waste
heat from efficient ‘green’ data centres.
3.1.2.vi. Any specific measures to promote the use of energy from biomass, especially for new
biomass mobilisation, taking into account:
The key factors in this area are listed under 3.1.2.i. Specific measures are as follows:
Extending the sustainability criteria to cover installations with a rated electrical output above
10 MW
Sourcing biomass for energy production in principle from the Greater Region or within a radius
corresponding to the Greater Region
Cascading use of wood
Creating a sustainability label for Luxembourg.
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3.1.3. Other elements of the dimension
3.1.3.i. Any national policies and measures affecting the EU ETS sector and assessment of the
complementarity and impacts on the EU ETS
The voluntary agreement with industry (accord volontaire) described under 3.2.i. involves companies which
are participating in the EU emissions trading scheme.
3.1.3.ii. Policies and measures to achieve other national targets, where applicable
Sustainable funding
International solidarity and climate finance
Regarding climate finance, the Paris Climate Agreement calls on developed nations to provide
financial resources to support developing countries for both damage mitigation and adaptation
purposes.
In recent decades, Luxembourg has provided substantial financial and technical assistance to
support climate action in developing countries, focusing on Least Developed Countries (LDCs),
Small Island Developing States (SIDS) and Luxembourg’s development cooperation partners.
Luxembourg will continue to support developing countries in the fight against climate change: from
2021 to 2025, it will be able to contribute a total of €200 million and an annual budget at least
equivalent to the 2020 contribution of €30 million. This total amount includes a significant financial
contribution, currently €10 million annually, to the Green Climate Fund and an annual budget of
€5 million for climate projects by Luxembourg Non-Governmental Organisations (NGOs).
These funds are designated as International Climate Finance (ICF) and are new and in addition to
Official Development Assistance (ODA). They are made available through the Climate and Energy
Fund, which is supervised by the Minister for the Environment. It is guaranteed that the ICF will be
continue to be available in addition to the ODA.
In the run-up to the COP21 Paris Climate Conference in 2015, the government had already
committed to supporting climate action in developing countries, with a contribution of €120 million
from 2014 to 2020.
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A strategy for distributing the Luxembourg ICF, including eligibility criteria, was drawn up in 2017.
It is aiming towards a provisional distribution of 40% for mitigation, 40% for adaptation and 20%
forestry (REDD+).
Furthermore, the Government Council has endorsed the introduction of a comprehensive
approach to governance in the primary partner countries for development cooperation, in order
to reinforce cohesion and synergies between development measures and other areas, including
the fight against climate change and the development of economic, cultural, political and security
relations. As Cape Verde is the country with which Luxembourg has the most diverse and developed
relations, this new approach will be implemented there first.
Knowing that public investment alone will not be sufficient to reach the target of $100 billion by
2020, it is essential that public investment provide leverage for other sources of funding, including
the private sector.
However, investment in new forms of climate financing will be far from sufficient. Trillions of US
dollars and euros must be transferred from carbon-intensive investments to low-carbon
alternatives in order to ‘make finance flows consistent with a pathway towards low greenhouse
gas emissions and climate-resilient development’, as enshrined in the Paris Climate Agreement.
Luxembourg today acts as an important international platform for sustainable finance, which
connects investors around the world. In the coalition agreement, the government clearly made
sustainable finances a priority for developing the financial centre. The aim is to develop
Luxembourg as a centre of expertise in sustainable finance, and to promote and support public-
private partnerships in the field of sustainable finance.
The underlying principle of Luxembourg’s success has always been its capacity for change and
constant innovation. Building on Luxembourg’s financial infrastructure, Luxembourg’s financial
centre has found a new direction and diversified. It has adopted green, sustainable finance and is
now the European market leader in this field.
In recent years, the government has launched several important climate finance initiatives together
with partners from the financial sector:
the LU-EIB Climate Finance Platform, a joint initiative with the European Investment Bank
(EIB), has been developed to mobilise investments for climate action projects with the
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combination of a first loss guarantee. It is the first time that the EIB has entered into such
a project with a Member State. This kind of initiative is key to reducing the risks (de-risking)
of climate investment and to attracting private investors who would otherwise be reluctant
to invest.
The International Climate Finance Accelerator, a public-private partnership, provides fund
managers with financial and operative support to launch new and innovative climate funds.
The Forestry and Climate Change Fund is a ground-breaking impact fund which aims to
demonstrate that sustainable forest management in secondary and degraded tropical
forests generates economic, environmental and social value.
Thanks to its important financial centre, Luxembourg can create a substantial leverage effect and
play an important role in sustainable finance, far out of proportion to its geographical size. This
means that Luxembourg acts as a catalyst driving sustainable investment, in particular by matching
investors with sustainable investments.
The roadmap towards sustainable finance
Luxembourg already has a long and successful history in relation to sustainable finance, from
microfinance to green bonds. LuxFLAG, a dedicated finance labelling agency, was set up back in
2006. In 2007, the world’s first green bond (EIB) was listed on the Luxembourg Stock Exchange and
the Luxembourg Green Exchange (LGX) was established in 2016. The LGX is the first platform in the
world to deal exclusively with green securities. Currently, almost half of the world’s green bonds
are listed in Luxembourg.
Boosted by recent successes in this field, the relevant ministers presented the Luxembourg
Sustainable Finance Roadmap (LSFR) in October 2018, together with the United Nations
Environment Programme-Finance Initiative. This will further consolidate the leading role played by
Luxembourg’s financial sector in sustainable finance. In fact, Luxembourg ranks 4th on the Global
Green Finance Index.
The aim of the roadmap is to take stock of existing sustainable finance initiatives in Luxembourg,
to lay the foundations for a sustainable finance strategy in order to contribute to the 2030 agenda
and to achieve the targets set out in the Paris Climate Agreement, and to consolidate the leading
role played by Luxembourg’s financial centre in relation to sustainable finance.
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The roadmap is ambitious in terms of Luxembourg’s contributions to sustainable development and
to European and international climate initiatives. It is leading the way towards future opportunities
and challenges.
The recommendations cover several aspects of the financial centre, such as developing financial
products for sustainable finance, developing education and training programmes to meet the
needs of the financial sector, or promoting innovation to facilitate financing of sustainable
development.
In this connection, the government will support the creation of conditions which encourage a
further increase in the market share held by sustainable financial products, in order to give
Luxembourg’s financial centre a leading role in sustainable finance.
The LSFR recommendations will be supplemented by further analyses in the coming years, in order
to produce a customised and feasible action plan. To achieve this, the Luxembourg Sustainable
Finance Initiative, a public-private body, will be set up to bring together the relevant parties in the
field of sustainable finance and will be led by the relevant ministers.
This body will provide the ideal forum for drawing up Luxembourg’s national sustainable finance
strategy, based on the key elements of the LSFR. It will also serve as a discussion platform for
examining the feasibility and impact of the measures resulting from the LSFR recommendations.
Equal opportunities and human rights
Luxembourg is committed to implementing climate change policies which help to promote equal
opportunities, empower women and girls, and show respect for human rights.
Luxembourg recognises that climate change has gender-specific effects, and that increasing the
participation and leading roles played by women and girls will boost the effectiveness of the fight against
climate change and the level of ambition in all areas.
The National Plan for Sustainable Development is the main tool for implementing the 2030 Agenda in
Luxembourg. Pursuant to SDG 5: ‘Achieve gender equality and empower all women and girls’, Luxembourg
has identified the following objectives as a priority: 5.1. ‘End all forms of discrimination against women’,
5.2 ‘Eliminate all forms of violence against women’ and 5.5 ‘Equality of the sexes’.
As regards climate finance, in May 2017 Luxembourg presented its strategy for providing resources for
international financing to fight climate change. Luxembourg’s strategy is based on a number of guiding
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principles, including that funding should meet stringent requirements of environmental integrity, social
benefits and gender equality.
At international level, aspects of climate change relating to human rights and to protecting local
communities and indigenous peoples will also be taken into account. Luxembourg is actively engaged in
promoting and protecting human rights in relation to climate change in various ways:
Establishing (May 2015) an inter-ministerial committee on human rights to improve national
coordination and close cooperation with civil society, which is an integral component of the
committee’s work
Supporting the Local Communities and Indigenous Peoples Platform (UNFCCC)
Organising round tables and events, as well as encouraging the preparation of reports on human
rights in the context of climate change in collaboration with the Center for International
Environmental Law (CIEL) and the Office of the United Nations High Commissioner for Human
Rights (OHCHR).
In addition, over the past few years Luxembourg has signed all declarations and initiatives specifically
focusing on human rights and gender equality in relation to climate change:
Geneva Pledge for Human Rights in Climate Action, COP21
Declaration on Gender Equality and Climate Change, COP24
For all Coalition, UNEA4
Climate Actions that advance Gender equality and Women Empowerment, UNCAS 2019
3.1.3.iii. Policies and measures to achieve low emission mobility (including electrification of
transport)
E-mobility
As explained in Chapter 3.1.1.i, electromobility plays a particularly important role in decarbonising the
transport sector in Luxembourg. The government has laid the foundations for supporting this by way of
regulatory adjustments, such as supporting the inclusion of empty conduits in new buildings for subsequent
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installation of a charging infrastructure, the regulated construction of a public charging network, and
introducing financial support for purchasing electric vehicles.
Luxembourg will prepare a detailed route map in order to boost development of electromobility, and in
view of the objective of the corresponding scenario of 49% of cars being electric by 2030 (see Chapter 2.2).
The cross-border element is particularly important in terms of promoting electromobility in Luxembourg,
in order to make the switch an attractive prospect for over 200,000 commuters and Luxembourg residents
who travel long distances abroad. The government will implement associated initiatives at the level of the
Pentalateral Forum (DE, FR, B, NL, LU, AU, CH) and the Greater Region.
Active mobility will also make a significant contribution to low-emission mobility. The detailed measures
under MoDu 2.0 are described in 3.1.1.i.
Green batteries
The government is proactively committed to new legislation on green batteries at EU level. The EU
Commission will table a new directive at the start of 2020, which will enshrine in law a future 100%
recycling rate for lithium and other materials used in batteries for all batteries used in cars, buses
or elsewhere. The standards for the industrial processes which are necessary for producing
batteries will also be subject to strict criteria. The EU Commission is also working with Canada,
Japan and South Korea on an agreement to develop a sustainable mining initiative, to ensure that
raw materials used in the EU come from mining areas with good health and safety conditions.
The EU budget also supports the development of European green battery production. With EU
funding, Northvolt has already created the first ‘major green battery factory’ in northern Sweden,
where electricity comes from 100% renewable energy sources and the sourcing of minerals meets
high environmental standards.
Biofuels
A comprehensive strategy for the use of sustainable biofuels will be developed to help reduce emissions for
conventional transport users. The blending of first-generation biofuels with fossil fuels plays a limited role
here due to their less positive CO
2
-balance. The Luxembourg government will promote the use of second-
generation biofuels through mandated blending and cooperation particularly with Benelux partners. The
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government programme stipulated that use of first-generation biofuels is to be limited to no more than
5%, in order to promote the use of second-generation biofuels which are thought to be more sustainable.
EU standards for cars, vans and HGVs
Alongside the national initiatives and programmes, the revision of the European legal framework
establishing CO
2
limit values for passenger vehicles and light commercial vehicles (final compromise with
reductions of 37.5% and 31%, respectively, by 2030 compared to 2021) and for heavy goods vehicles
(general approach with a reduction of 30% by 2030 compared to 2020) will also contribute significantly to
lower-emission mobility. Luxembourg will strive to ensure that this revision stipulates that as of 2030, only
fossil-free drive systems will be approved in the EU, for cars and vans at least.
3.1.3.iv. Any national policies, timelines and measures planned to gradually phase out energy
subsidies, in particular for fossil fuels
The study ‘Effects of subsidies and tax incentives on sustainable development – environmentally harmful
subsidies in Luxembourg’
The 2018 government programme indicated the intention to analyse the numerous direct and indirect
subsidies and tax incentives relating to sustainable development and to finalise the test results of the
ongoing study and use them for possible adjustment.
Luxembourg has set itself standards in its own plans (e.g. the National Plan for Sustainable Development)
and targets that trigger a review of the existing subsidy policy. Launching such reforms of the framework
conditions is necessitated not only by climate change objectives, but also other environmental and social
targets.
The study focuses on three specific sectors in particular (transport, energy and agriculture) where economic
activities play a particular role that can lead to environmental pressures.
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3.2.
‘Energy efficiency’ dimension
Energy efficiency is considered a top priority (implementation of the ‘energy efficiency first’ principle
enshrined in EU legislation) and is of particular importance for Luxembourg in achieving its energy and
climate objectives, given its extremely dynamic economy. In the area of new buildings, Luxembourg is
already at the forefront of the implementation of the energy efficiency requirements for residential
buildings with virtually zero energy consumption and has successfully decoupled population growth from
CO
2
emissions. In line with the European ‘energy efficiency first’ principle, Luxembourg intends to continue
to pay particular attention to improving energy efficiency in the building sector. By increasing the
renovation rate of buildings and using all available smart technologies, this sector has much to offer a
climate neutral and competitive economy. As 50% of electricity consumption is in industry, this will also be
a focus of energy efficiency policy. There is also a need to increase the efficiency of mobility (from internal
combustion engines to electric motors, which are far more efficient). In general, all energy efficiency
measures should pay particular attention to social impacts and measures should be taken to embed the
new regulations in social terms.
3.2.i. Energy efficiency obligation schemes and alternative policy measures under Articles 7a and 7b
and Article 20(6) of Directive 2012/27/EU and to be prepared in accordance with Annex II to this
Regulation
Continuation of the energy efficiency obligation scheme;
In order to transpose Article 7 of Directive 2012/27/EU into national law for the period up to 2020,
Luxembourg introduced a national system of energy efficiency obligations in 2015. The instrument should
lead to the achievement of the energy efficiency target under Article 7(1), subject to the possibility of using
other alternative measures in the future.
A guide was published in August 2019 to facilitate the accounting of transport measures under the ‘Lean
and Green’ programme. The new programme will target 1.2 to 1.5% of final energy and will cover all
sectors.
There were a few teething problems, but some of the parties bound by the programme have now improved
their resources, invested in structures and developed concepts to improve the effectiveness of the
mechanism.
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For these reasons, the Luxembourg government is determined to continue with and optimise the Energy
Efficiency Obligation Scheme for the period 2021 to 2030 in order to comply with the obligation set out in
Article 7 of the amended Energy Efficiency Directive.
The creation of new instruments in the field of energy saving for industry, small and medium-sized
enterprises and large office buildings (de-risking financial instrument, transparency platform for audits,
exemplary role of public buildings) will also increase the scope for energy efficiency investments for the
‘parties obligées’. The final energy savings target for the period 2021-2030 will be set at 1.2 to 1.5% per
year and will cover all sectors. In addition, the further development of the commitment system will include
an adjustment to the penalties for failure to comply, making non-compliance with the savings commitment
more costly than the investment required to meet the targets. To ensure that the framework is in force in
time for the start of the new period (1 January 2021), details for the 2021-2030 period will be provided in
the early implementation of EED II (Revised Energy Efficiency Directive) or via the current version of the
Electricity Act [Stromgesetz].
Industrial sector
Strategies and measures aimed at creating a monitoring tool for businesses and future measures and
framework conditions to support energy efficiency in industry by 2030 are set out in Section 3.1.1.
Accord volontaire
The ‘Accord volontaire’ between the industrial sector, represented by FEDIL, the Luxembourg government
and My Energy G.I.E., which has been in existence since 1990, is a voluntary agreement to improve energy
efficiency in the industrial sector in Luxembourg. The current agreement is valid from 2017 to the end of
2020 and includes 54 companies from the industrial and tertiary sectors. In return for fulfilling several
requirements and achieving a 7% improvement target for a joint energy efficiency indicator for the
reference periods 2014-2015 and 2020, participating companies will receive a tax credit on electricity and
natural gas allowed under Council Directive 2003/96/EC of 27 October 2003 restructuring the Community
framework for the taxation of energy products and electricity. This voluntary agreement is to be continued,
deepened and extended after 2020 in order to reach out to more companies, especially SMEs. Improved
communication and cooperation between participating companies should help to identify and make use of
possible synergies in the field of energy efficiency. A detailed analysis of the current ‘Accord volontaire’ will
serve as a basis for this. In addition, the continuation of the voluntary agreement should lead to more
ambitious energy efficiency improvement targets by encouraging and adequately supporting companies in
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the implementation of identified savings measures and providing additional opportunities for action in the
financing and implementation of projects.
Energy audits transparency platform
An important prerequisite for investing in energy efficiency is detailed knowledge of potential savings in an
industrial process or a building. This is ensured by means of audits. As these audits are currently only
mandatory for very large consumers, a simplified version will be extended to medium-sized industrial
processes and office buildings. In addition, a transparency platform will be set up for the results of energy
audits, following the example set by France. This will improve the contact between the ‘parties obligées’
under the Energy Savings Regulation and industrial, SME and office buildings.
New financial instrument for energy efficiency in industry and large office buildings
Experience in recent years has shown that there is a large discrepancy between the savings potential
identified in the audits and the savings actually achieved by industry and owners of large office buildings.
Many potential investments identified as useful by engineers are blocked by companies’ strict financial
requirements. In order to remedy this discrepancy, consideration is being given to making the
implementation of the results of the ‘Accord volontaire’ audits mandatory and to establishing an additional
financial instrument in close cooperation with the EIB (European Investment Bank).
De-risking
Although the financial aid described in point 3.1.1.iii. helps to improve the economic viability of projects in
the field of climate and environmental protection, it does not make it possible to remove all barriers and
obstacles to the use of environmental technologies in order to achieve national climate and energy
objectives more quickly. In this context, the Luxembourg government is looking into creating an additional
financial instrument that will allow a number of obstacles to the implementation of energy efficiency
measures to be addressed in a systemic manner at national level. A pre-financing and risk management (‘de-
risking’) tool is to be developed and promoted for energy transition projects at industry and SME level. The
aim is to increase investment in energy efficiency measures through improved use and a more transparent
analysis of data from existing building and industrial projects. Pre-financing will be provided through a state
fund or bank guarantee to cover part of the investment risk, and a ‘risk’ climate fund (private/public), or
part of the climate and energy fund, will be used to assess and mitigate existing risks. In addition, a pooling
of invoices (‘securisation of receivables’) is to be made possible in order to spread the risk and an
instrument is to be created that can be used to quantify legal, financial and ecological aspects (possibly as
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a research project). Within the scope of de-risking projects, it is also important to create a mechanism
between ‘risk takers’ and ‘risk providers’ in order to promote a standardised process and ensure hedging.
Lean & Green programme
The ‘Lean & Green’ programme will continue to be implemented with stakeholders from the transport and
logistics sector in order to further reduce the sector’s CO
2
emissions. The programme was set up by
Connekt, an independent network of Dutch companies and public authorities, with the aim of encouraging
companies to reduce their environmental impact. Any company that can demonstrate, on the basis of a
detailed action plan, that it will achieve a 20% reduction in CO
2
emissions over the next 5 years can apply
for the ‘Lean and Green’ label.
As a number of the measures can be booked through the Energy Efficiency Obligation Scheme, this ‘Lean
and Green’ label was more strongly integrated into the scheme in 2019.
The optimisation of the logistics sector will also support the conversion of supply fleets to small electric
trucks and cargo bikes.
3.2.ii. Long-term renovation strategy to support the renovation of the national stock of residential
and non-residential buildings, both public and private, including strategies, measures and actions to
stimulate cost-effective deep renovation and strategies and actions to target the worst performing
segments of the national building stock, in accordance with Article 2a of Directive 2010/31/EU
Implementation of the national renovation strategy
Within the framework of Directive 2012/27/EU of 25 October 2012 on energy efficiency, amending
Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC, in
November 2016, the Luxembourg government published the further development of the national building
renovation strategy drawn up within the framework of the third NEEAP, which is based on four guiding
principles:
Priority to high-efficiency renovations
Affordability of energy renovation measures
Alignment of energy policy and heritage protection objectives
Inclusion of elements of sustainable construction and the circular economy
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These guiding principles are consistently taken into account in the development of projects, in awareness-
raising and information policy and in legal or regulatory amendments in the area of building renovation.
In addition to the guiding principles, some 35 measures have been identified to reduce legal and financial
barriers, among others, that have been reviewed and implemented within the scope of the work carried
out by the ‘Conseil national de la construction durable’ (CNCD). The following measures were identified as
priorities:
To remove obstacles faced by building managers
To introduce an obligation to establish renovation reserves for owners’ associations
To adjust the decision-making quorums for the implementation of renovation measures
(introduction of a simple majority for decisions by owners’ associations)
Municipalities should become pioneers in building renovation (climate pact, financial aid,
logistical aid, competitions, etc.)
To examine the possibility of applying the reduced VAT rate of 3% to buildings constructed 10
years ago (instead of 20 years)
To promote energy-efficient renovation in the building stock by simplifying the administrative
stages of the ‘climate loan’.
Oil replacement programme in old buildings
An ambitious long-term building renovation strategy is being presented with a view to increasing the
renovation rate (to 3% per year) and the depth of renovation (‘deep renovation’), with the aim of
rehabilitating all existing houses to ‘net zero’ by 2050. In addition to the requirements for a long-term
building renovation strategy as described in the EU Directive 2012/27/EU EED, the existing building
renovation strategy is to be extended to include the following:
Monitoring of the existing renovation strategy
Creation of an interministerial working group
Workshops with stakeholders to define how the objectives will be achieved
Updated potential analysis or assessment of the baseline situation
Stronger social embedding of the measures
The measures defined as part of the building renovation strategy drawn up in 2016 will be further
developed, but may be extended by newly identified measures. For this purpose, workshops or a
comprehensive survey to identify new measures can be implemented as in the existing building renovation
strategy. The following measures, among others, have already been identified and are being implemented:
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Improved and faster advice from independent energy consultants and a new digital ‘app’ that
is also made available to tradesmen
Targeted advice, financial measures and a reform of the ‘Syndic’ law for larger apartment
buildings
Systematic urban district or entire street rehabilitation
In addition, densification of the existing building stock, following the example of the City of
Vienna, is being researched in pilot projects
Renovation of functional buildings
In order to support building renovation in the non-residential sector, there are plans to extend the
mandatory energy audits for large energy consumers in the commercial sector to SMEs, taking account of
the specificities and possible simplifications for SMEs. This means that SMEs would also be obliged to have
their energy consumption regularly checked in order to better assess the renovation potential of their
buildings.
In order to increase the energy performance and renovation rate of non-residential buildings, consideration
is also being given to introducing a renovation obligation along the lines of the Dutch model.
In November 2018, a measure was introduced in the Netherlands setting the energy standard of office
buildings at energy class C from 2023 onwards. Owners of existing properties are therefore obliged to
renovate their buildings to energy standard C by 2023 or to prove that the necessary measures have been
taken to this end.
Introduction of an energy passport ‘plus’ in the building stock (housing and functional buildings)
In order to improve and generalise the information base in the building stock, there are plans to introduce
an energy passport ‘plus’ specifically for existing residential buildings, which should provide a better picture
of the real renovation potential. The purpose of this energy passport is to provide the owner with a
transparent and individualised ex-ante assessment of the renovation potential and the associated savings.
There are also plans to introduce a similar energy passport ‘plus’ for existing functional buildings.
Post-densification
At district level, the aim is to support the densification of the existing stock by simplifying the municipal
framework conditions and promoting self-contained flats. To some extent, corresponding adjustments
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have already been made as part of the revision of the existing development plans. However, they will be
pursued further, especially for the municipalities that still need to implement this revision. In particular,
the revision of the specific urban development plans for existing neighbourhoods can show an important
tax effect in the case of densification. To raise the awareness of citizens in the participatory processes,
there are also plans to make sample plans and regulations available in order to better inform the affected
citizens about the possibilities of post-densification.
There are also plans to make the cadastral register more flexible or to revise it in general, so as to allow for
a sharper division of ownership within the buildings, particularly in the case of apartment blocks and
terraced houses. The public social housing agencies SNHBM and Fonds du Logement will launch the first
pilot projects in this area.
Financing measures – climate bonus programme
The main support schemes have already been listed under 3.1.1.i. The following funding programmes are
relevant in the field of building renovation:
The PRIMe House support programme offers investment grants for the energy-efficient and
sustainable renovation of residential buildings. The support scheme has been extended and
reviewed a number of times since 2001. The current programme runs until the end of 2020.
In addition, the sustainable energy renovation of residential buildings is supported via low-interest
or (for low-income households) interest-free loans, with the technical requirements being the
same as the PRIMe House criteria. There are plans to review and simplify the terms and conditions
and application procedure, so that more homeowners can benefit from a climate loan in the future
Reduced VAT rate of 3%
The conditions for obtaining the reduced VAT rate of 3% for renovation work will be adapted and
harmonised with the requirements of the PRIMe House programme. The aim is to examine whether owners
of buildings constructed 10 years ago can benefit from the reduced VAT rate instead of the current 20
years.
3.2.iii. Description of policy and measures to promote energy services in the public sector and
measures to remove regulatory and non-regulatory barriers that impede the uptake of energy
performance contracting and other energy efficiency service models
The ministries and administrations concerned are currently discussing how these barriers can be removed.
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3.2.iv. Other planned strategies, measures and programmes to achieve the indicative national energy
efficiency contributions for 2030 as well as other objectives referred to in point 2.2 (for example
measures to promote the exemplary role of public buildings and energy-efficient public
procurement, measures to promote energy audits and energy management systems, consumer
information and training measures, and other measures to promote energy efficiency)
New construction
In addition to the comprehensive energy-related renovation of buildings to increase energy efficiency,
measures must also be implemented in the new build sector. The following measures are to be developed
or expanded within the scope of the improvement of energy efficiency in new buildings:
Raising the building standard for non-residential buildings
Following the introduction of the ‘Nearly zero energy building (nZEB)’ energy standard for new
residential buildings in 2017, this standard will also apply to non-residential buildings from
2020/2021. This standard is to be further increased by 2030 and the ‘near zero’ standard is to be
redefined by improving energy efficiency requirements for new non-residential buildings.
Introduction of an A+ energy class for residential buildings
As mentioned in the section above, the ‘nZEB’ construction standard for new residential buildings
has been in force since 2017. This is to be extended in the short term (A+ energy class) to ensure
100% renewable energy coverage.
Sustainability and health in construction
New residential and non-residential buildings will also integrate aspects such as health and well-
being, alongside a stronger anchoring of sustainability. This will be implemented through the
integration of elements in the national energy passport, the ‘LENOZ’ sustainability certification or
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the creation of a new label. Toxic and harmful building materials are to be banned and a positive
list of building materials is to be drawn up which includes natural and ecological options.
Circular economy
The concept of the circular economy will be further promoted in the construction sector in order
to improve the quality of future buildings. This should be achieved through support programmes
within the scope of ‘progressive requirements’. Specific strategies and measures with regard to the
circular economy in the construction sector can be found in Section 3.1.1.i.
Sustainable neighbourhoods – Made in Luxembourg ecodistricts
Luxembourg will ensure that neighbourhoods built in the future allow for improved urban quality
and quality of life while also being CO
2
-free. To this end, a definition of sustainable neighbourhoods,
with uniform criteria, a clear methodology and new subsidies will be drawn up under the guidance
of the Minister for Spatial Development. In addition, the existing system of building inspections is
to be analysed and, if necessary, revised in order to guarantee compliance with building and energy
standards through increased and harmonised building inspections by the municipalities.
Green data centres
As digitalisation progresses steadily, data centres are essential. However, in the future these will need to
be built in a far more energy efficient manner and operators will have to make greater efforts to operate
more efficiently. It is important to apply the best technical solutions, such as immersion cooling, and to use
the waste heat produced by data centres for heating or cooling buildings or whole neighbourhoods. The
reduction of energy consumption and the preference for renewable energies should also be implemented
at the level of computer infrastructures, such as data centres, which is why the Luxembourg government
is committed to creating appropriate framework conditions for green data centres, including at EU level.
Government to lead by example
As already mentioned under 3.1.1, Luxembourg has adopted a strategy for ‘sustainable and energy-efficient
public buildings’ in relation to new construction and existing structures, in order to improve energy
efficiency and the use of renewable energy in government and government-related buildings.
In the ‘Fourth National Energy Efficiency Action Plan Luxembourg (2017)’, drawn up within the framework
of Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy
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efficiency, Luxembourg has identified energy efficiency measures in public institutions that will be partially
adopted and further developed for 2030. For example, the government has taken the lead as a state and
has stepped up efforts in recent years and implemented an ambitious renovation programme. In order to
calculate the renovations, Luxembourg drew up an inventory of the public buildings concerned. According
to Article 5(7) of the EED, public facilities that are not part of the central government (e.g. schools) should
also be encouraged to act as role models in the energy efficiency of buildings. For example, the public social
housing agencies, the Société Nationale des Habitations à Bon Marché (SNHBM) and the Fonds du
Logement are working to gradually renovate and improve the energy efficiency of the rental housing stock.
The airport in the capital city is to be transformed to become the Findel Green Airport within this framework.
In particular, this involves the implementation of energy-saving measures and the use of renewable energy,
primarily to convert the existing terminal into an energy-plus building. Another aspect of the state’s
pioneering role is the replacement of all light bulbs in public buildings and street lighting with LEDs by 2025
in order to improve efficiency and contribute to the fight against light pollution. In addition, the
introduction of a state Top Runner programme will encourage the purchase of energy-efficient equipment
from the state and municipalities.
Businesses
Strategies and measures with regard to financing measures for new construction can be found in
Section 3.1.1.
Pacte logement 2.0
Strategies and measures with regard to the ‘Pacte logement 2.0’ can be found in Section 3.1.1.
3.2.v. Description of measures to exploit energy efficiency potentials in gas and electricity
infrastructure
Electricity and gas network operators are continuously pursuing programmes with a view to ensuring
security of supply in the future. These programmes include investment measures for the conversion,
expansion, maintenance and replacement of the respective infrastructures. In addition to ensuring security
of supply, these measures also help ensure that networks are constantly up-to-date, thereby contributing
to improving energy efficiency.
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Other specific measures to exploit energy efficiency potentials in gas and electricity infrastructure are
sometimes not foreseen.
3.2.vi. Any regional cooperation in this area
Specific measures for regional cooperation aimed at exploiting energy efficiency potentials in gas and
electricity infrastructure are sometimes not foreseen.
3.2.vii. Financing measures, including Union support and the use of Union funds, in this area at
national level
Strategies and measures with regard to financing measures for the energy efficiency sector can be found
in Section 3.1.1.
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3.3.
‘Energy security’ dimension
3.3.i. Strategies and measures related to the elements set out in point 2.3
In order to analyse and ensure the security of supply in the electricity and gas sector, the Luxembourg
government draws up reports on this subject every two years. These reports not only consider the balance
between supply and demand, but also investigate the extent to which network operators in Luxembourg
are making sufficient investments in the maintenance and expansion of their networks. The most recent
reports, dating from 2018, clearly show that national electricity and gas infrastructures are in good
condition and are as close as possible to the state of the art. The existing gas infrastructure is large enough
for the current and foreseeable supply task and, accordingly, no further expansion measures are planned,
except for possible densification within the connected municipalities. In the electricity sector, on the other
hand, various investment measures are foreseen (see Section 3.4.1). In the context of security of supply in
the Greater Region of Luxembourg, the Vianden Pumped Storage Power Plant has an important role to
play.
Pursuant to Article 7 of Regulation (EU) 2017/1938 of 25 October 2017 concerning measures to safeguard
the security of gas supply, Luxembourg is currently also carrying out risk assessments to ensure the security
of gas supply. Current analyses indicate that although the security of supply in Luxembourg is highly
dependent on neighbouring countries, having neither its own mining operations nor extensive storage
capacities, it will be possible to manage disruptions in the majority of the gas infrastructure through
demand-side measures. These demand-side measures may be limited to industrial customers, thereby
guaranteeing the supply of protected customers. At the same time, it is not possible to rule out negative
economic implications in the event of disruptions to network connection points over the longer term.
The widespread installation of smart meters will also make a useful contribution to security of supply. The
switching relays of the new smart electricity meters enable grid operators to switch off loads in a targeted
manner for system security purposes. National law provides for a smart meter rollout of 95% in the
electricity sector and 90% in the gas sector by the end of 2020. Regular stocktaking indicates that
implementation is on schedule, which is also backed up by current statements from the distribution
network operators. There is currently a debate about the extent to which these technical possibilities
should be flanked by an expanded regulatory framework. Work is also under way to establish how further
use can be made of these technical possibilities through an energy data platform.
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In addition to the above, it should also be noted that the implementation of the Clean Energy Package in
the revised Electricity Market Organisation Act of 1 August 2007 will further increase cross-border
competition between suppliers, which in turn has a positive impact on security of supply.
With regard to the oil sector, the measures set out in Section 3.1.3 aimed at increasing efficiency and reducing
CO
2
emissions will contribute to reducing the consumption of fossil fuels and therefore to improving security of
supply. Despite the large number of initiatives planned and implemented with a view to making mobility
sustainable and free of CO
2
in the future, it is also necessary to ensure in parallel to this that the current and
future supply of fossil fuels, which are currently still necessary, is secure, whether by diversifying the sources or
supply routes or by providing sufficient stocks of mineral oil products to overcome potential supply bottlenecks.
Since Luxembourg does not have any refineries in its national territory and therefore imports no crude oil
but only mineral oil products, the scope for diversifying the countries of origin is very limited. Regarding
the imports of mineral oil products by country of origin, it must be taken into account that the majority by
far comes from Belgium, followed by Germany, France and the Netherlands. In terms of the security of
supply, it is important that the diversification of the countries of origin is also maintained in the future.
It is also important for the security of supply, particularly in Luxembourg’s situation, to diversify the supply
routes. Since the airport in Luxembourg is supplied with fuel directly via an underground pipeline (CEPS),
the diversification of supply routes relates primarily to the mineral oil products diesel, petrol and fuel oil.
The majority of imports are via road, with only around one fifth being handled by rail. The remainder of the
imports are carried out by inland waterway via the Moselle. Owing to the limited opportunities to influence
the transport routes, it is necessary for Luxembourg to keep sufficient stocks of mineral oil products in its
national territory to be able to compensate for any disruptions to the supply routes.
As a member of the European Union (EU) and the International Energy Agency (IEA), Luxembourg is obliged to
keep stocks of mineral oil equivalent to, on average, 90 days of the previous year’s imports. In practice, Luxembourg
has consistently fulfilled its international obligations regarding the stockpiling of mineral oil in recent years. The
importers of mineral oil products have fulfilled the national legal obligation of the compulsory storage of eight days
in the national territory, while the other amounts must be kept either in the regional territory outside Luxembourg
(37 days) or elsewhere in the EU.
Although access to the stocks accounted for in Luxembourg is guaranteed in the event of a crisis, it can also be
assumed, given Luxembourg’s limited size, that the stocks kept in neighbouring countries can be transported to
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Luxembourg in the event of a local crisis. In the case of stocks kept further away from Luxembourg, the prompt
transport of these stocks to Luxembourg in the event of a crisis is likely to be associated with relatively large logistics
expenses (transport capacities, expenditure of time, etc.). If, in future, there is a clear and consistent downward
trend in the consumption of the transport sector, the need to construct new tank farms would have to be modified.
In order to reduce the dependency on oil as far as possible and limit the environmental impact of transport,
Luxembourg is pursuing a multidimensional strategic plan. The primary focus is on traffic avoidance and
public transport. In addition, Luxembourg is promoting the introduction of e-mobility and alternative fuels,
each of which must be based on renewable energy sources.
3.3.ii. Regional cooperation in this area
In the electricity sector, the regional cooperation within the ‘Security of Supply’ working group of the Pentalateral
Energy Forum (PLEF) is the most important mechanism for the early recognition of problems with the security of
supply from the perspective of Luxembourg. The Luxembourg government is working together with the
Luxembourg transmission network operator, Creos, to actively support the drafting of the PLEF Adequacy
Assessment, which was last updated in February 2018. The inclusion of the flow-based capacity calculation method
for the first time, in particular, has further increased the validity of the monitoring. Based on this monitoring, which
is based on a probabilistic approach, no critical energy security risks can be identified for Luxembourg at present.
Further development of the methodology, analyses and reports is planned or already under way.
Joint exercises will also be organised in this same working group to improve emergency procedures and
cooperation in a regional crisis. In this context, the active participation and cooperation with the Regional
Security Center, TSCNet, should also be mentioned in order to prepare and coordinate activities relevant
to the security of supply (‘Coordinated Security Analysis’, ‘Outage Planning Coordination’, ‘Short and
Medium Term Adequacy forecasts’ and ‘Consistency check of TSOs’ system defence and restoration plans’)
at regional level. As provided for in Article 37 of Regulation (EU) 2019/943 on the internal market for
electricity, regional cooperation in the field of security of supply will be further deepened by means of
‘Regional Coordination Centres’. In this regard, mention should be made of all of the activities defined and
implemented under Regulation (EU) 2019/941 on risk-preparedness in the electricity sector, in particular:
Monitoring the security of electricity supply in the Union through the Electricity Coordination
Group
Defining an electricity crisis and developing a common methodology for risk identification
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Regional approach to identifying risk scenarios and to developing preventive, preparatory and
mitigating measures
Drawing up and regularly updating risk-preparedness plans, including national, regional and, where
applicable, bilateral measures
Agreeing on coordinated measures and technical, legal and financial arrangements
Complying with transparency requirements
At European level, the Luxembourg transmission system operator Creos is a member of ENTSO-E and is
actively involved in the annual Mid-Term Adequacy Forecast. In addition to the reports mentioned above,
this is used to assess and ensure security of supply in the electricity sector.
In the gas sector, regional cooperation takes place in the Gas Forum of the Pentalateral Energy Forum. This
forum brings together the Benelux countries with Germany and France. The Gas Forum consults national
and regional risk assessments and ensures consistency between national preventive action plans and
emergency plans established in accordance with Regulation (EU) 2017/1938 of 25 October 2017
concerning measures to safeguard the security of gas supply.
The Gas Forum sets out a common approach to ensuring security of supply in the event of an emergency
and reduces the risk of adverse effects that purely national measures could have.
In the gas sector, the Member States are also obliged to conclude bilateral agreements on terms and
conditions in order to be able to provide solidarity in accordance with Article 13 of Regulation (EU)
2017/1938 in the case of demand from neighbouring Member States. To this end, preliminary discussions
have been held with neighbouring countries with a view to launching the relevant steps and agreements.
In the oil sector, the Member States coordinate their supply and stockholding activities in the Oil
Coordination Group, of which Luxembourg is a member.
3.3.iii. Any financing measures in this field at national level, including Union support and the use of
Union funds
In the electricity sector, relevant network expansion measures are planned over the next few years,
particularly at transmission grid level, to ensure energy security in Luxembourg. The financing of projects
will be ensured through network charges.
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In the oil sector, since importers of mineral oil products have a national legal obligation to hold mandatory
stocks, they are also responsible for financing these obligations in accordance with market conditions.
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3.4.
‘Internal energy market’ dimension
A key building block for the overall strengthening of the European Single Market will be the swift
implementation of the entire ‘Clean Energy Package’. Individual elements that are of relevance are
discussed below, but a full recap is not required.
3.4.1.
Electricity infrastructure
3.4.1.i. Strategies and measures to achieve the targeted level of interconnectivity as set out in point
(d) of Article 4
On account of its high dependency on imports, Luxembourg already has electricity interconnection
capacities that are able to sustainably safeguard the security of supply. This can be seen in particular from
the high load interconnection rate, which is well above the 2030 objectives set out in the European Council
Decision, but is also indispensable for Luxembourg and only comparable to a limited extent with
interconnection levels in other EU Member States. While the target size for Member States has recently
been increased from 10% to 15%, Luxembourg is already exceeding this many times over with a load
interconnection rate of 270% (see also 4.5.1). The level of interconnection will continue to increase until
2030 in line with the planned network expansion projects. Among other things, the transmission system
operator, Creos, is actively promoting the reinforcement and upgrading of the high and medium voltage
levels to enable and support the transition from fossil fuels to renewable energies. In particular, the aim is
to enable the production of electricity (especially wind and photovoltaics) to be continually increased in
the north of the country and to allow for high consumption in the centre and south of the country. Due to
its dependence on imports, a further expansion of the existing interconnectors is also planned in order to
continue to guarantee the security of supply for Luxembourg. For example, the upgrade/reinforcement of
the existing 220 kV line towards Germany is already part of the network development plans of both
Luxembourg and Germany.
The planned network development projects on existing corridors are being implemented in line with the
existing procedures and are intended to improve the situation for the population as a whole. In order to
ensure the necessary public acceptance, the public will be involved through a broad consultation process.
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3.4.1.ii. Regional cooperation in this area
There will be close cooperation with neighbouring countries for the implementation of cross-border
electricity infrastructure projects. In addition to the respective bilateral cooperation, coordination shall also
take place at regional level (in particular in the framework of the Pentalateral Forum) and at European level
(within the respective ENTSO-E working groups, in particular the Ten Year Network Development Plan).
As has already been described in more detail in Section 1.4, the Pentalateral Energy Forum has adopted
the common plan to further develop the internal energy market through coordinated activities in the
following areas:
Market integration
o Electricity market coupling
o Implementation of the Clean Energy Package
o Redispatching
Flexibility
o Demand-side management
o Sector coupling and Power-to-X
o Role of hydrogen
o Role of storage technologies
o E-mobility
3.4.1.iii. Any financing measures in this field at national level, including Union support and the use
of Union funds
The electricity infrastructure is financed by corresponding network charges, which are set and monitored
by the regulatory authority (Institut Luxembourgeois de Regulation, ILR). Separate funds are available at
European level, which can be distributed within the framework of the Projects of Common Interest.
However, there are no projects currently planned for Luxembourg that depend on this financing measure.
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The Pentalateral Energy Forum will discuss possible regional approaches to increasing energy efficiency and
expanding renewable energies. For example, common approaches could be sought with financial
institutions, such as the European Investment Bank, in order to reduce financing risks.
3.4.2.
Energy transmission infrastructure
3.4.2.i. Strategies and measures related to the elements set out in point 2.4.2, including any specific
measures to enable the delivery of Projects of Common Interest (PCIs) and other key infrastructure
projects
The decommissioning of the TwinErg GuD power plant has considerably reduced the peak demand for gas.
Therefore, even in the case of further expansion of biogas plants (see Section 4.4.2), it can be expected
that the current and foreseeable supply task can be adequately met by the existing gas infrastructure.
Accordingly, no further measures are envisaged for extending the gas infrastructure. The import capacity
will be increased by other measures, such as improving the use of these capacities through cross-border
cooperation.
3.4.2.ii. Regional cooperation in this area
Although no further development activities are foreseen, close cooperation will be pursued with
neighbouring countries in order to optimise the use of existing gas infrastructure, particularly in crisis
situations. This coordination will take place bilaterally, regionally (especially in the gas platform within the
Pentalateral Energy Forum) and at European level (ENTSO-G).
3.4.2.iii. Any financing measures in this field at national level, including Union support and the use of
Union funds
The gas infrastructure is financed by corresponding network charges, which are set and monitored by the
regulatory authority (Institut Luxembourgeois de Regulation, ILR). There are no plans at present to use
European funds.
3.4.3.
Market integration
A key building block for the overall strengthening of market integration will be the swift implementation of
the entire ‘Clean Energy Package’. Individual elements that are of relevance are discussed below, but a full
recap is not required.
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3.4.3.i. Strategies and measures related to the elements set out in point 2.4.3
The introduction of the ‘BeLux’ joint gas market with Belgium in 2015 was an essential measure for
improving Luxembourg’s market integration in the gas sector. Through this joint gas market, it is easier for
suppliers active in Luxembourg to access the liquid trading hub at Zeebrugge as well as LNG terminals and
gas reservoirs. This promotes competition in the whole of the joint market and offers gas customers high
security of supply at more affordable prices.
In the electricity sector, Luxembourg’s market integration has already significantly improved from a
technical perspective due to the construction of a phase-shifting transformer in Schifflange and the
integration of the Luxembourg grid interconnection into the European transmission network that this has
made technically possible, with permanent connections to Germany and Belgium. Commercialisation of
this interconnector is not planned in the short term. However, the issue will be closely monitored in the
course of the further development of congestion management (especially in the context of the Capacity
Calculation Region ‘Core’, see below).
Within the Pentalateral Energy Forum, the close integration of electricity markets in the region will be
further developed in the ‘Market Integration’ working group. In this respect, this Forum is a European
pioneer that fully exploits the potential of transmission capacity by calculating capacity allocation methods
using a flow-based approach. This will further improve market liquidity and ensure efficient congestion
management and an overall efficient market on a regional basis. Possibilities for cross-border participation
in the capacity markets in France and Belgium are also being discussed.
As part of the joint market area with Germany, Luxembourg is actively supporting the coalescence of the
electricity markets. For the day-ahead market, the further development of capacity calculation and
congestion management in the core region is a top priority. As regards the intraday market, both the active
participation in the integrated XBID platform and the harmonisation of the conditions for Luxembourg
network users with the German framework conditions (in particular Gate Closure Times) should be
mentioned. The same applies to balancing markets: the transmission system operator CREOS is currently
investigating ways of opening up access to the German and European balancing market for network
customers in Luxembourg. A particular challenge here is posed by the fact that the Creos transmission
network is a separate ‘scheduling area’, while load-frequency control is handled by the German Amprion
for the joint ‘load-frequency control’ (LFC) area. At the same time, access to the German and European
electricity balancing markets for Luxembourg network customers offers the potential to stimulate the
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decentralised production of electricity in Luxembourg and to open up new marketing opportunities in the
area of demand-side management for household and business customers, as well as the industrial sector.
Consequently, Luxembourg is also actively participating in the relevant European balancing reserve
platforms (MARI, PICASSO). In this context, reference should also be made to the pumped storage power
plant in Vianden, which is directly connected to the German transmission system and provides a significant
contribution to the stability of the system and security of supply in the Greater Region (see Section 4.4.1.).
Due to the specific configurations of the transmission network operators Creos and Amprion, the extent to
which cooperation in the common wholesale price zone should be further regulated by contract, inter alia
with a view to dealing with crisis situations, e.g. through contracts between network operators or
intergovernmental agreements under Regulation (EU) 2019/941 on risk-preparedness in the electricity
sector, is currently being examined.
3.4.3.ii. Measures to increase the flexibility of the energy system with regard to renewable energy
production such as smart grids, aggregation, demand response, storage, distributed generation,
mechanisms for dispatching, re-dispatching and curtailment, real-time price signals, including the
rollout of intraday market coupling and cross-border balancing markets
To enable electricity consumers to actively participate in the market, Luxembourg has legally obliged the
network operators to convert at least 95% of all electricity meters to smart meters by the end of 2020. This
would create the conditions, in particular, for the introduction of time-variable tariffs.
Smart meters also provide a technical basis for improving transparency, service quality and efficiency, as
well as opportunities for innovative energy services. Examples include transparent access to own
consumption data, improved market communication processes, activation of flexibility on the consumer
side, or more efficient network operation. However, further development of the data infrastructure is
necessary in order to take full advantage of these opportunities. A current legislative proposal therefore
provides for the development of an energy data platform, in particular to enable access to relevant
electricity consumption data for authorised users (i.e. in particular the end consumers themselves), taking
into account all aspects of data protection, which must be given high priority at all times. The design phase
is scheduled for completion by the end of 2020. Depending on the cost-benefit ratio of the proposed
options, the implementation phase will then follow.
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The design of network charges is closely linked to the issue of additional flexibilities and fair allocation of
costs in the electricity sector. This is currently being investigated by the Luxembourg regulatory authority,
ILR, as part of a study. In this regard, it is also being checked that the applicable rules do not constitute any
obstacles to consumers actively participating in the market and that the possibility is open for self-
sufficiency with appropriate sharing of the network costs of all consumers.
The regulatory authority, ILR, prepares annual reports on the electricity and gas markets. These reports
deal, in particular, with the competitive situation on the markets, for example based on the number of
suppliers active in Luxembourg and the rates of switching for customers in different segments. ILR also
prepares an annual report on whether the prices for supplying electricity and gas are in conformity with
the public service obligations (‘obligations de service public’).
The implementation of the ‘Clean Energy Package’ in the revised Electricity Market Organisation Act of
1 August 2007 reinforces the potential for flexibility of consumers. An amendment to this law, which was
introduced in 2018 and, with some adjustments, in 2019, will regulate and also promote own consumption
based on renewable energies. Renewable electricity consumed individually or in a community shall be
exempted from electricity taxation and network use in terms of consumption volume. Network charges for
connection services shall be levied on a cause-related and non-discriminatory basis. These measures create
an important condition for easing the burden on the electricity networks and enabling them to operate in
a smarter and safer manner.
3.4.3.iii. Measures to ensure priority access and dispatch of electricity from renewable sources or
high efficiency cogeneration and avoidance
The revised Law of 1 August 2007 on the organisation of the electricity market guarantees a feed-in priority
for renewable energy. It also obliges network operators to minimise security of supply measures restricting
the supply of electricity from renewable energy sources.
However, the aim is to further integrate renewable energy into the market. In the case of larger plants, the
support was changed to a market premium model, which stimulates a more efficient optimisation of use
on the basis of efficient price signals.
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3.4.3.iv. Strategies and measures to protect consumers, especially vulnerable and, where applicable,
energy-poor consumers, and to improve the competitiveness and contestability of the retail energy
market
To provide consumers with a clearer overview of electricity and gas tariffs and to evaluate the potential
savings of switching suppliers, the regulatory authority runs the comparison portal www.calculix.lu. In its
report, the authority also gives recommendations on how to improve the competitive situation on the
electricity and gas markets, for example through transparency measures.
3.4.3.v. Description of measures to enable and develop demand response, including those addressing
tariffs to support dynamic pricing
Corresponding measures have already been described in Section 3.4.3.ii. and are therefore not listed again
here.
3.4.4.
Energy poverty
3.4.4.i. Any strategies and measures to achieve the objectives set out in point 2.4.4
Low-income sections of the population are being hit particularly hard by climate change and the health
impact of fossil energy sources. Climate action therefore also provides a tangible contribution to social
justice. However, climate action must also be socially embedded in order to prevent energy poverty.
Luxembourg has a comprehensive strategy for tackling poverty in general (minimum wage, social inclusion
income (REVIS), etc.). In addition, there is a series of measures in Luxembourg offering targeted help to
people affected by energy poverty. The acts of 1 August 2007 on the organisation of the electricity market
and on the organisation of the natural gas market stipulate that household customers who are unable to
pay their electricity or gas bills can receive social assistance from the responsible social welfare office.
For its part, the act of 18 December 2009 on the organisation of social assistance stipulates that, when
applying the procedures established in the above-mentioned acts on the organisation of the electricity and
natural gas markets, the responsible social welfare office must investigate whether the household
customer is able to pay his or her energy bills and is entitled to social assistance.
Particular attention must be paid to tackling energy poverty in the housing sector: in Luxembourg, rising
house prices have become a major social challenge. Low-income population groups can often only have
access to poorly maintained rented housing in old buildings with low energy standards. The government is
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therefore targeting the creation of affordable housing. Energy efficiency measures in the housing sector
will be designed in a way that simultaneously improves the national energy balance and the living
conditions of low-income groups.
At the same time, targeted programmes will also be put in place which, in the face of rising CO
2
prices, will
provide significant financial incentives for homeowners to switch from fossil to renewable energy sources.
This change should also be affordable for people on low incomes. Among other things, a ‘heating oil
replacement programme’ aims to simplify the changeover both technically and financially.
The government will also work with all relevant stakeholders to develop innovative programmes to provide
incentives for the renovation of old housing while providing housing for low-income groups as part of the
national long-term renovation strategy to be prepared next year.
It should also be mentioned that there is already a programme in place through the cost-of-living allowance
(‘Allocation de vie chère’), which also counteracts energy poverty. At the same time, the state rent subsidy
can help those in need to face a possible increase in the cost of housing. It should also be pointed out that
the current social assistance legislation stipulates that any person who satisfies the conditions for
entitlement to social assistance is entitled, under defined conditions, to a minimum provision for domestic
energy if he or she is unable to cover the costs of domestic energy.
The huge volume of investment in infrastructure development and the introduction of free public transport
from 2020 are certainly not just transport policy measures, but also clearly social measures.
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3.5. ‘Research, innovation and competitiveness’ dimension
3.5.i. Strategies and measures related to the elements set out in point 2.5
In 2015, the Chamber of Commerce of Luxembourg, IMS Luxembourg and the Ministry of Economic Affairs
commissioned the sociologist, economist and journalist Jeremy Rifkin to study the development of a new
vision for the Luxembourg economy, taking account of his reflections on the ‘Third Industrial Revolution
(TIR)’. The study was carried out as part of a collective process using the concept of ‘Open Societal
Innovation’. This approach aims to identify solutions to the challenges faced by the state and society, and
seeks to exploit the collective intelligence of the stakeholders involved, in the form of group intelligence.
The TIR process was therefore conceived as an open, inclusive, collective intelligence-based and future-
shaping process, targeting a common ambition to understand an increasingly complex world, to identify
megatrends, to draw the necessary conclusions and to bring them into the democratic institutions in an
appropriate manner. Last but not least, the TIR process should also break up the traditional silo thinking,
which is widespread in both the private and the public sector.
The TIR strategy study, which covers the areas of energy, mobility, buildings, food, industry, finance, smart
economy, circular economy and prosumers & social model, was organised in thematic platforms covering
the individual areas and involving over 300 participants from business, politics and civil society.
Based on the conclusions of the study, the Government Council decided to use the results as a general
guide for the design of national future policy. In the energy and climate field, the Government Council
identified as priorities the development of a national energy internet, the promotion of e-mobility, the
introduction of the concept of ‘Mobility as a Service’ and the implementation of a flagship project to
demonstrate the socio-economic contribution of sustainable neighbourhoods/cities with sustainably
constructed healthy buildings that take account of the principle of ‘circularity’.
The above-mentioned priority projects and the approaches outlined in the TIR strategic study, which are
based on the significant development of renewable energies and their integration into the energy network,
the development of decentralised energy storage, the digitalisation of energy networks, the use of more
sustainable means of transport and the energy efficiency of the building stock, are therefore the
cornerstones and an appropriate basis for greater prioritisation of research and innovation policy in the
field of energy.
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It should be noted in this regard that Luxembourg, as a small country, can of course only make a
correspondingly small contribution to the necessary global energy turnaround. On the other hand, the very
fact that it is a small country means that Luxembourg has the potential to become a pioneer at country
level to illustrate how certain key technologies and innovations associated with the energy transition can
be scaled up at country level and how they affect a country’s energy balance. In this way, Luxembourg could
become a pioneer in key technologies and innovation in the energy transition, thereby achieving a transfer
value that would be extremely valuable from an international perspective and that would be
disproportionately higher than the direct contribution of a small country to the global energy balance. In
this sense, and as a consequence of the developments outlined above, Luxembourg will focus on a number
of key areas of research and innovation, selected on the basis of the following criteria: (1) they build on
existing skills developed in recent years in the Luxembourg research landscape (2) they build on existing
infrastructures that Luxembourg has built up in recent years and has already scaled up at country level, and
(3) they are suited to ensuring that research competencies combine with infrastructures to form the basis
for a workshop for key technologies and innovations for the energy transition. (4) In addition to these more
technical innovations, research is also being conducted into spatial planning and socio-political processes
of climate-friendly transformation.
As far as existing research competencies are concerned, Luxembourg can build on an internationally highly
successful and visible research landscape in the field of computer science, in which energy-related topics
such as ‘smart grid’, ‘smart mobility’, ‘smart buildings’ and the ‘Internet of Things’ have also developed very
well. Following on from these themes, Luxembourg has also increased its investment in the fields of ‘data
science’ and ‘data modelling’ and has recently acquired the necessary IT infrastructure with an
internationally visible HPC infrastructure, which can also handle larger data processing and data modelling
projects. Appropriate and successful research stakeholders are also available to shed light on the social
aspects of an energy transition.
As far as national, energy-related infrastructure is concerned, the Luxembourg government has launched
a whole series of highly relevant initiatives in recent years. For example, electricity and gas system
operators were required by law to replace current metering systems with smart meters and to manage the
relevant data through a national central system by 2020 and 2021 respectively. Luxembourg is therefore
one of the first countries in the world to have comprehensive and integrated smart meters for electricity
and gas, with the possibility of extending them to other media such as water and district heating. In
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addition, electricity distribution network operators have also been required by law to set up a common
national infrastructure of public recharging points for electric vehicles, which by 2020 foresees a total of
800 recharging points in public spaces and in park & ride parking areas. Luxembourg’s guidelines on energy
efficiency for buildings, which are highly progressive when compared with those of other countries, are
also worthy of note as are its extensive approaches in the areas of ‘indoor pollution’, ‘sustainable building
materials’ and even ‘circularity of buildings and whole districts’ (éco-quartiers made in Luxembourg).
The above considerations lead to the conclusion and aspiration that Luxembourg intends to become a
pioneer for the successful implementation of a large-scale nationwide energy transition. Sustainable and
energy efficient buildings with local flexibility options and/or energy storage capacity, as well as sustainable
mobility components (smart grids) will form the main pillars of this system. Sensor technology and data
interoperability open up possibilities for overall monitoring and modelling, which in turn can be used to
optimise the system components.
Luxembourg will therefore also become a highly attractive location for suppliers and start-ups in the field
of smart energy management, which will find an attractive testing and experimentation environment in
Luxembourg for the (further) development of their products.
The cross-border dimension of spatial and mobility planning is also particularly important for Luxembourg.
More than in other cross-border metropolitan areas (Copenhagen, Basel, Geneva), Luxembourg is a magnet
for a border area with three different countries (France, Germany, Belgium) and commuter flows, as well
as the cross-border housing and labour market, which is unique in Europe on this scale. For Luxembourg,
it is essential to promote research and innovation in this area.
Luxembourg therefore intends, among other things, to continuously increase the volume of investment in
research and development in the energy sector and hopes to focus in particular on the following thematic
priorities:
1. Sustainable buildings and building materials – energy efficiency and circular economy,
decentralised renewable energy, ‘indoor pollution’
2. Éco-quartiers made in Luxembourg – plus energy systems, car-free mobility, socially inclusive urban
planning
3. Integration of renewable energies and e-mobility in digital power networks, energy-internet and
sector coupling
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4. Territorial and cross-border transformation processes in the areas of mobility and spatial planning
5. Social transition processes and social innovation aimed at ‘climate positive lifestyles’
In order to address the above-mentioned issues in a structured, clustered and targeted way, the above-
mentioned thematic areas will be grouped together in a new research infrastructure that is to be
established, involving all relevant stakeholders: the University of Luxembourg, the Luxembourg Institute of
Science and Technology (LIST) and the Luxembourg Institute for Socio-Economic Research (LISER), in order
to take a mission-based approach to research that will shed light on the social and societal aspects of the
targeted pioneer. The national research fund, ‘Fonds National de la Recherche’ (FNR), will be able to take
over the necessary financing aspect and the indispensable quality control.
As regards innovation, Luxembourg is a strong supporter of sustainable development in economic,
environmental and also social terms. Luxembourg is also developing a growing community of clean
technology start-ups and SMEs, addressing issues such as energy transition, smart cities, smart mobility
and also recycling. It is also important to highlight that Luxinnovation’s vision is to be a trustworthy partner
for entrepreneurs and to find pragmatic solutions for their innovative business development projects that
are in line with the government’s objectives and that develop the Luxembourg economy in a sustainable
way through innovation and research.
Luxembourg‘s national innovation agency, Luxinnovation, currently plays a crucial role in supporting the
above-mentioned enterprises. It encourages and supports companies to innovate and grow, while
facilitating collaboration with public research stakeholders. This applies in particular to the area of clean
technologies and the transition to a circular economy.
Luxinnovation’s portfolio of services for companies and public research institutions will be expanded and
streamlined around the topics of energy system transformation and the associated digitalisation of this
sector. It will also seek to improve the attractiveness of international investors, companies and
professionals to ensure that companies and activities attracted from outside are compatible with the
government’s objective of developing the economy in a sustainable manner.
Financing the energy transition and ‘green finance’
Luxembourg is one of the world’s leading financial centres, particularly in the area of investment funds.
Luxembourg is also home to the world’s largest investment bank, the European Investment Bank (EIB),
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 128
which is currently being transformed into a climate bank. In its current legislative programme, the
government has committed to transforming Luxembourg’s financial centre into a ‘green finance’ centre.
Research priorities currently include the creation of a research team for ‘green finance’ and ‘impact
finance’. Luxembourg will also develop a research priority on ‘Financing the Energy Transition’, notably due
to its geographical proximity to the EIB, where new financial instruments such as ‘de-risking instruments’
for energy efficiency, renewable energy and energy infrastructure will be explored and taught, as well as
the interfaces with the insurance industry based in Luxembourg. Further strategies and measures are
outlined in Section 3.1.3.ii.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 129
Stimulating behavioural changes in lifestyles
In addition to the regulatory and financial framework of the state, there is also a need to change lifestyles
within society. Climate and energy policies require the participation and acceptance of citizens. In order to
achieve a sustainable stimulation of behavioural changes in lifestyles, an attractive environment should be
created that motivates permanent changes in everyday routines:
• Enhancing public transport and accessibility for all citizens
• Promoting the concept of the sharing economy
• Encouraging responsible travel and nutrition
• Setting an example of climate protection through public institutions
• Increasing the supply of alternative means of transport, such as bike sharing, cargobikes, car
sharing or carpooling
• Cross-border integrative urban (neighbourhood) and spatial planning
An additional measure to raise citizens‘ awareness and encourage behavioural change is the appointment
and promotion of a ‘neighbourhood administrator’ within the municipalities. The intention is to provide a
decentralised approach to sustainable living and the ecology and circular economy within the
neighbourhood through, for example, the promotion of the sharing economy and urban farming projects,
the organisation of an exchange platform or a repair café.
3.5.ii. Any regional cooperation with other Member States in this area; this includes any information
on how the objectives and policies of the SET-Plan are applied to national situations.
The steps and institutional developments mentioned in the previous sections will be further developed in
cooperation with other European research and innovation institutions. European programmes are
particularly appropriate here, as well as doctoral students, etc.
3.5.iii. Any financing measures in this area at national level, including Union support and the use of
Union funds
In recent years, the Luxembourg Government has made considerable efforts to support technological
developments and the research and innovation of new technologies. Environmental technologies are
among the priorities of Luxembourg’s economic diversification strategy.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 130
As provided for in the 2018-2023 government programme, Luxembourg will focus even more in the coming
years on innovation and research in the fields of ‘renewable energy’, ‘energy efficiency’, ‘sustainable cities’
and ‘neighbourhoods and buildings’. Existing efforts and skills at the national research institutes should be
increased. In addition, the connection between energy and climate policies and the economic development
of the country in general should be strengthened.
By bringing the national legal framework for the promotion of research, innovation, energy and the
environment into line with European State aid guidelines, Luxembourg has already equipped itself with the
necessary tools to best assist the private sector in implementing forward-looking innovations. In the future,
it will be important to use these instruments in the most targeted way possible in order to ensure the
competitiveness of national companies on the one hand and to achieve national climate, energy and
environmental goals on the other.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 131
4.
Current situation and projections with existing policies and measures
In order to analyse the current situation with regard to energy and climate policy in Luxembourg and to
prepare projections based on the current policies and measures, the Luxembourg government
commissioned a consortium of consultants from the Fraunhofer Institute for System and Innovation
Research (Fh-ISI), Consentec GmbH, the Institute for Resource Efficiency and Energy Strategies (IREES) and
TU Wien – Energy Economics Group. The consortium supplemented and adapted the models already
applied in previous projects concerning energy demand and energy supply to the given requirements in
order to establish an analytical basis that is as robust as possible.
Two scenarios have emerged from the model-based assessment of policies and measures. The reference
scenario includes the projections based on current policies and measures and is described in Section 4. The
impact assessment of the planned policies and measures described in Section 3 resulted in the target
scenario presented in Section 5.
In general, it should be noted that such modelling and the resulting projections do indeed serve as
guidance, but are always subject to uncertainty. This is especially true in the case of small open economies,
such as that of Luxembourg. As a result, individual decisions or decisions taken abroad or at European level
can bring about significant changes when compared with the scenarios presented in this plan.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 132
4.1. Projected evolution of main exogenous factors influencing energy system and GHG emission
developments
For both scenarios (reference and target) a very similar set of assumptions was applied in terms of key
exogenous factors. On the one hand, these parameters stem from national and European sources and, on
the other hand, they are based on the expertise of the consortium of consultants. They are presented in
brief below.
Macroeconomic forecasts and sectoral changes
According to projections by the national statistical institute, Statec
14
, the population of Luxembourg is
expected to increase from around 626,000 inhabitants in 2020 to around 752,000 inhabitants in 2030 and
to around 869,000 inhabitants in 2040. This corresponds to average growth of 1.85% per year until 2030,
decreasing to around 1.45% per year between 2030 and 2040. Overall, the population of Luxembourg will
increase by about 20% by 2030 when compared with 2020.
Table 4: Population growth and gross domestic product
Unit
2020
2025
2030
2035
2040
Population
Thousand inhabitants
626
690
752
812
869
Gross domestic product
Annual growth rate in %
3.8
3.0
3.0
3.0
3.0
Source: Statec (2019)
The above-mentioned projections by Statec show that the annual growth rate for gross domestic product
will be 3.8% in 2020, falling to 2.5% by 2023, before finally settling at around 3%.
Global/Europe-wide energy trends
As regards the assumptions on price trends on the global and European energy markets, the Commission’s
recommendation was followed. Accordingly, the model-based analysis of the Luxembourg energy system
14
Long-term macroeconomic and demographic projections 2017-2060 (November 2017) updated with medium-term projections 2019-2023
(March 2019). The population figures correspond to the situation on 1 January of the respective year.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 133
was based on assumptions and results of the impact assessment of the EU climate and energy targets for
2030
15
. Table 5 allows a comparison to be made of the specific energy prices of fossil fuels.
Table 5: Assumptions on energy price trends
Key price trends for fossil fuels
Unit
2020
2025
2030
2035
2040
Oil
€/toe
502.3
589.8
649.8
677.8
717.7
Natural gas (net calorific
value)
323.1
361.6
393.3
420.0
434.2
Hard coal
95.8
118.4
142.1
150.5
156.8
Source: European Commission (2016)
Assumptions on cost developments for renewable energy technologies
Table 6 shows the assumptions on cost developments for renewable energy technologies that were used
for modelling. As can be seen, previous trend developments are expected to continue for all technologies,
which will trigger a steady decrease in specific costs. This assessment and the assumptions made specifically
for technologies such as photovoltaics can nevertheless be classified as conservative.
15
European Commission, 2016, SWD(2016) 410 final: Impact Assessment. Supplementary to the following documents: COM(2016) 861 final,
SWD(2016) 411 final, SWD(2016) 412 final, SWD(2016) 413 final. Brussels, 30 November 2016
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 134
Table 6: Assumptions on cost developments for renewable energy technologies
Unit
2020
2025
2030
2035
2040
Electricity sector
Biogas
€/kW
3,830
3,558
3,359
3,181
3,005
Biomass
4,900
4,530
4,336
4,194
4,134
Hydroelectric power
3,754
3,697
3,668
3,642
3,618
Photovoltaic
1,045
906
817
716
688
Wind energy
1,459
1,405
1,344
1,298
1,241
Heat sector
Biomass, decentralised
€/kW
699
651
640
611
604
Solar thermal energy
670
642
677
700
743
Heat pumps
786
762
743
627
719
Source: Green-X Model, Vienna University of Technology (Resch et al, 2019)
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 135
4.2. ‘Decarbonisation’ dimension
4.2.1. GHG emissions and removals
Table 7 shows the development of the annual greenhouse gas emissions in the period from 2005 to 2017.
The values and the definition of the sectors have been taken from the GHG inventory of 2019.
16
In
accordance with international conventions, the total sum of the LULUCF emissions is not included. In 2017,
a total of 10.2 million t CO
2
eq was emitted. This is a 21.4 per cent reduction when compared with 2005.
Table 7: Greenhouse gas emissions by sector for 2005 to 2017, in kt CO2eq
2005
2010
2011
2012
2013
2014
2015
2016
2017
Total emissions
13,025
12,180
12,062
11,781
11,239
10,787
10,295
10,052
10,236
Energy-related emissions
11,552
10,737
10,613
10,410
9,872
9,388
8,896
8,614
8,778
Energy sector
1,243
1,206
1,004
1,043
686
669
458
252
244
Industry
1,407
1,268
1,242
1,185
1,146
1,147
1,106
1,142
1,141
Transport
7,188
6,517
6,893
6,585
6,439
6,139
5,706
5,533
5,639
Private households
1,216
1,161
1,064
1,083
1,075
973
1,086
1,119
1,116
Trade, commerce and services
419
502
336
439
463
398
483
512
583
Others*
27
29
28
28
24
24
24
24
24
Diffuse emissions
53
54
47
48
41
38
35
32
31
Non-energy-related emissions
1,472
1,443
1,449
1,371
1,366
1,399
1,399
1,438
1,458
Industrial processes
726
676
692
633
617
633
625
650
662
Agriculture
641
672
666
649
660
675
688
704
712
Waste
105
95
91
89
90
91
85
83
84
LULUCF
-601
-88
-220
-313
-500
-416
-362
-452
-344
* Other emissions relate to combustion in construction and agriculture
Source: GHG Inventory 2019v1 (March 2019)
For the period 2005 to 2017, the annual GHG emissions can be broken down by emissions in the sectors
subject to the ETS and those in other, non-ETS sectors (see Table 8). Due to the change to the scope of the
ETS from 2013 onwards, additional activities and installations have been included in the ETS. The
corresponding GHG emissions are therefore no longer accounted for in the non-ETS sector (non-ETS
emissions for industry in 2012: 563 kt CO
2
eq and non-ETS emissions for industry in 2013: 274 kt CO
2
eq).
The GHG emissions from the non-ETS sectors amounted to 8.7 million t CO
2
eq in 2017, of which only about
10% were non-energy-related GHG emissions.
16
https://cdr.eionet.europa.eu/lu/eu/mmr/art07_inventory/ghg_inventory/envxitkwg/
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 136
Table 8: Greenhouse gas emissions by ETS and non-ETS for 2005 to 2017, in kt CO
2
eq
2005
2010
2011
2012
2013
2014
2015
2016
2017
ETS emissions excl. internat. air transport
2,603
2,253
2,052
1,990
1,847
1,931
1,661
1,503
1,492
Total non-ETS emissions
10,421
9,926
9,998
9,798
9,391
8,855
8,634
8,549
8,744
Energy-related non-ETS emissions
9,608
9,070
9,144
8,960
8,536
7,982
7,753
7,653
7,832
Energy sector
232
201
208
215
221
174
175
184
184
Industry
474
605
570
563
274
236
245
249
255
Transport
7,188
6,517
6,893
6,585
6,439
6,139
5,706
5,533
5,639
Private households
1,216
1,161
1,064
1,083
1,075
973
1,086
1,119
1,116
Trade, commerce and services
419
502
336
439
463
398
483
512
583
Others*
27
29
28
28
24
24
24
24
24
Diffuse emissions
53
54
47
48
41
38
35
32
31
Non-energy-related non-ETS emissions
814
856
854
838
855
873
882
896
912
Industrial processes
68
89
97
100
106
108
108
109
116
Agriculture
641
672
666
649
660
675
688
704
712
Waste
105
95
91
89
90
91
85
83
84
LULUCF
-601
-88
-220
-313
-500
-416
-362
-452
-344
* Other emissions relate to combustion in construction and agriculture
Source: GHG Inventory 2019v1 (March 2019) and EUA EU Emissions Trading System (ETS) data viewer.
17
The projections for the sector-specific developments by ETS and non-ETS for the reference scenario based
on current policies and measures are shown in Table 9 .
Table 9: Greenhouse gas emissions by ETS and non-ETS for 2020 to 2040, in the event of the reference
scenario (without additional measures), in kt CO
2
eq
2020
2025
2030
2035
2040
ETS emissions excl. internat. air transport
1,393
1,308
1,202
1,138
1,068
Total non-ETS emissions
8,394
8,379
8,554
8,822
8,967
Energy-related non-ETS emissions
7,502
7,530
7,736
8,016
8,168
Energy sector
163
163
163
163
163
Industry
196
206
205
223
236
Transport
5,453
5,549
5,844
6,167
6,352
Private households
1,144
1,131
1,099
1,058
1,042
Trade, commerce and services
489
426
370
349
321
Others*
25
25
25
26
26
Diffuse emissions
31
31
30
29
29
Non-energy-related non-ETS emissions
892
849
817
806
799
Industrial processes
112
106
80
70
64
Agriculture and forestry
701
671
669
668
667
Waste
79
72
68
68
67
LULUCF
-390
-393
-401
-399
-397
* Other emissions relate to combustion in construction and agriculture
Source: Own illustrations, 2019
17
https://www.eea.europa.eu/data-and-maps/dashboards/emissions-trading-viewer-1
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4.2.2. Renewable energy
The contribution made by renewable energy to energy production in Luxembourg is steadily increasing. As
can be seen from the target scenario in Section 2 of this report, a consistent continuation of the trend
established in the recent past is being sought. The following section explains the starting position in respect
of the use of renewable energy, followed by a consideration of the future development – in this case purely
in the event of a continuation of existing measures, both in terms of production and demand.
Status quo of renewable energy use in Luxembourg
In recent years, considerable growth has been achieved in renewable energies such as wind energy,
photovoltaics and biomass, i.e. the core technologies in the field of electricity production for Luxembourg.
Over the course of a decade, their contribution has increased significantly – both in the electricity sector
(from 3.3% in 2007 to 8.1% in 2017), but also in connection with heat generation (from 4.4% in 2007 to
8.1% in 2017). In the transport sector, which is dominated by the use of biofuels and the transition to
electrically operated drive systems, this change was even more dramatic: In 2007, the renewable energy
share was around 2.2%; in 2017, Luxembourg achieved a renewable energy share of 6.4%.
Reference development in the event of a continuation of existing measures
In the following, a reference development or the expected development with continuation of existing
measures, both on the supply and the demand side, is presented for the period up to 2040.
The renewable energy share in the gross final energy demand, in other words the total of the sectoral
energy demands for electricity, heat and fuels in the transport sector would increase accordingly from 6.4%
in 2017 to 12.9% by 2030, and finally to 13.5% in 2040.
Table 10 provides information on the sectoral decomposition of the overall balance and Table 11 provides
supplementary details on the potential underlying technology split. Compared to the target scenario of
25%, as depicted in Section 2 of this report, the underlying volumes only show comparatively minor
differences in terms of the energy-related contribution of specific renewable energy technologies.
Accordingly, a significant increase in renewable energy in the electricity sector is also expected in the
reference scenario. This results in a share of approximately 26.5% for 2030 and around 34.7% for 2040.
Substantial contributions in terms of volume are expected here from wind energy and photovoltaics – the
latter, however, being considerably slower than in the case of the development compatible with the target
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 138
scenario (according to Section 2). Projects that are already in the implementation stage, for instance in the
field of biomass cogeneration, will also make substantial contributions.
Similarly to electricity, a significant expansion of renewable energy is also expected in the heat sector in
the event of a continuation of existing measures. In this case, the renewable energy share in the reference
scenario will increase from 8.1% in 2017 to 18.6% by 2030 and finally 21.9% in 2040.
In unison with electricity and heat, a huge increase in the use of renewable energy is also expected in the
transport sector in the reference case. In this specific case, it is assumed that there will be an increase in
the admixture of biofuels (with an admixture rate of around 8% in 2030). In addition, an expansion of e-
mobility is expected, and it is also assumed that by the end of 2030 the biofuel mix will consist of no more
than 5% first-generation fuels. In total, an increase of the renewable energy share in the transport sector
to 15.1% will therefore be achieved by 2030 in the reference case.
Table 10: Sectoral shares of renewable energy in Luxembourg by 2040 according to the reference scenario
Renewable energy shares, sectoral
2017
2020
2025
2030
2035
2040
Renewable energy share,
electricity sector
%
8.1%
11.9%
19.4%
26.5%
31.3%
34.7%
Renewable energy share, heat
sector
%
8.1%
12.1%
15.4%
18.6%
20.4%
21.9%
Renewable energy share,
transport sector
%
6.4%
11.1%
13.5%
16.1%
15.1%
17.6%
Admixture rate for biofuels
%
5.4%
7.7%
8.0%
8.0%
5.6%
5.5%
Renewable energy share, total -
national production/consumption
%
6.4%
9.2%
11.2%
12.9%
12.8%
13.5%
Renewable energy share, total - incl.
renewable energy cooperation
%
6.4%
11.3%
17.4%
23.0%
22.7%
23.2%
Source: Own illustrations, 2019
In addition to national renewable energy production Table 11 also shows the volumes of renewable energy
that are to be covered in the future through renewable energy cooperation with other countries. These are
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 139
used in the reference scenario to achieve an overall renewable energy target of 23% in 2030 and amount
to (already contractually agreed) 1 TWh in 2020 and 4.83 TWh in 2030 (and thereafter).
Table 11: Technology-specific energy production from renewable energy in Luxembourg by 2040 according
to the reference scenario
Energy production,
technological details
2017
2020
2025
2030
2035
2040
Electricity sector
Biogas
GWh
72
56
65
68
63
62
Biomass
GWh
101
192
228
271
260
267
Hydroelectric power
GWh
104
93
97
100
104
107
Photovoltaics
GWh
108
201
476
616
687
729
Wind energy
GWh
185
211
383
676
958
1,167
Renewable energy electricity, total
GWh
570
752
1,249
1,731
2,071
2,332
Heat sector
Biomass & biogas,
grid-connected*
GWh
302
589
623
667
649
656
Biomass, decentralised**
GWh
672
883
1,145
1,383
1,522
1,560
Solar thermal energy
GWh
25
58
113
188
302
453
Heat pumps
GWh
52
95
190
224
226
227
Renewable energy heat, total
GWh
1,052
1,626
2,070
2,462
2,699
2,896
Transport sector
Biofuels, total
GWh
1,282
1,855
1,892
1,993
1,450
1,450
Renewable energy use, total
(national)
GWh
2,904
4,232
5,211
6,187
6,221
6,679
Renewable energy cooperation
Renewable energy cooperation
energy
GWh
0
1,000
2,917
4,833
4,833
4,833
* Central plants (fed into a heating network)
** Decentralised plants (not fed into a heating network, all sectors)
Source: Own illustrations, 2019
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 140
4.3. ‘Energy efficiency’ dimension
Various aspects need to be considered in the ‘energy efficiency’ dimension in order to paint the most
realistic picture possible.
Starting situation in terms of energy demand in Luxembourg
In 2016, Luxembourg’s final energy demand was just under 48 TWh (Statec 2018). The majority of the final
energy demand in Luxembourg, 59%, is accounted for by the transport sector (Figure 7). Of this, a majority
of around 34% is accounted for by foreign road transport. According to energy statistics, this includes the
refuelling caused by all non-domestic vehicle owners. This includes through traffic of heavy goods and
passenger vehicles, as well as cross-border commuters with passenger vehicles not registered in
Luxembourg. At the same time, air transport accounts for about 12% of total final energy demand, which
means that domestic road transport accounts for about 13% of Luxembourg’s final energy demand. While
the agricultural sector accounts for the lowest share in the final energy demand at around 0.2%, the
industrial sector requires the greatest share of energy in Luxembourg at just over 17%.
Private Haushalte
Private households
Landwirtschaft 0,2 %
Agriculture 0.2%
GHD
Trade, commerce and services
Industrie
Industry
Transport (inkl. Luftverkehr)
Transport (including air transport)
Endenergiebedarf gesamt in 2016: 47.831 GWh
Total final energy demand in 2016: 47,831 GWh
Source: IREES according to Statec 2018
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 141
Figure 7: Luxembourg’s final energy demand in 2016, broken down by industrial; household; trade,
commerce and services; transport and agricultural sectors
Luxembourg’s energy demand in 2016 is dominated by the need for mineral oil products (63%). The energy
demand was also covered by natural gas (17%), electricity (13%) and biomass (4%) (see Figure 8).
Endenergieverbrauch (GWh)
Final energy consumption (GWh)
Total
Total
Feste Brennstoffe
Solid fuels
Erdgas
Natural gas
Strom
Electricity
Wärme
Heat
Mineralölerzeugnisse
Mineral oil products
Biomasse
Biomass
Source: IREES according to Statec 2018
Figure 8: Final energy demand in Luxembourg in 2016, broken down by energy source
Note: In terms of electricity consumption, this presentation does not take account of the fact that larger
electricity consumers could settle in Luxembourg in the near to medium term.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 142
Existing potential for using high-efficiency cogeneration and efficient district heating and cooling
In 2015, just under 326 GWh of electricity and 527 GWh of heat were produced in Luxembourg using
cogeneration technology. It should be noted here that cogeneration plants are able to provide heat at
temperatures up to 500 °C. (Klobasa, Steinbach & Pudlik 2016).
Further potential for the use of high-efficiency cogeneration can be found in the following areas:
Decentralised cogeneration plants in buildings
Use of cogeneration in industry
Heating network supply and centralised cogeneration
The economic potential of the use of cogeneration plants and supply based on heating networks depends
largely on the development of renovation activities in the building sector and therefore on the development
of the heat demand of buildings as a whole. In the field of the decentralised supply of buildings, the use of
cogeneration in the power range below 500 kW of electric power is well-established. On account of the
building-specific heating or cooling demand values, there is still untapped economic potential for highly
efficient cogeneration or district heating, mainly in the area of multi-family buildings.
The economic potential of cogeneration in the building sector is currently being realised at about 50%
through existing local heating concepts. Therefore, in Luxembourg, there is currently an economic
cogeneration potential of around 1,170 GWh of useful energy in the building sector alone (Klobasa,
Steinbach & Pudlik 2016).
At the same time, a limited economic potential of around 500 GWh of final energy or 425 GWh of useful
energy is seen in industry by 2030 (see Table 12). Relevant sectors here are the chemical industry, the
timber industry and the food industry. However, to realise this industrial potential, good site conditions
with long plant running times are absolutely essential (Klobasa, Steinbach & Pudlik 2016).
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 143
Table 12: Additional potential for the cogeneration of heat in industry by 2030 based on final energy use
in industry
Fuel demand in
GWh
Cogeneration suitable
(<500 °C) in GWh
Cogeneration
existing in
GWh
Expansion
potential in
GWh
Sector
2014
2030
2014
2030
2014
2030
Steel
1 670
1 422
67
57
Stone/earth
1 094
589
164
88
Chemistry
319
295
316
292
210
Textiles
226
208
226
208
Timber
274
253
274
253
65
150
Food
61
57
60
56
Construction
77
71
0
0
Mechanical engineering
13
12
13
12
Paper
51
47
50
46
Other
157
154
145
134
122
115
Total
3 952
3 107
1 315
1 146
187
500
Cogeneration heat*
425
Cogeneration electricity**
255
Source: Klobasa, Steinbach & Pudlik 2016
Energy demand development in Luxembourg by 2040
The energy demand developments of the reference scenario and the target scenario from 2015 to 2040
are modelled using a bottom-up model. This model takes account of a number of very different drivers
depending on the sector under consideration (private households; trade, commerce and services sector;
industry and transport). In the model, these drivers are linked to corresponding specific energy demand
parameters in both the reference and target scenarios. The annual energy demand development is then
calculated by mathematically linking drivers with the associated energy demand characteristics and other
influencing factors. As a basis for the data and a source of information, wherever possible, the model draws
on existing accessible data sets or other sources of information (inventory, reports from research projects,
previous projects, etc.) for the relevant factors and influencing variables. These come, for example, from
Statec or other institutions. If no relevant data are available, assumptions and expert estimates must be
used. However, as a result of this, the project is unable to reflect the real situation in Luxembourg in all
sectors and sub-sectors in such a way that the modelled results can always be reflected in exactly the same
way as the results of other projects or data sets. The large number of influencing factors taken into account
demands a certain degree of abstraction or generalisation for the individual control variables. As a result,
all project results may differ to some extent from data or data sets that are already available.
Understandably, this applies not only to the demand side, but also to the supply side calculations.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 144
The following sectors contribute to Luxembourg’s total final energy demand: private households; trade,
commerce and services; industry and transport It is possible to draw a distinction here between non-ETS
(private households; trade, commerce and services; industry) and ETS (industry, aviation). In the case of
the reference development, the final energy demand of Luxembourg’s non-ETS sector will rise by 15% in
the period from 2015 to 2040; from just under 36 TWh per year to around 42 TWh. The final energy
demand of the transport sector will show the largest percentage increase here, growing to around
26.5 TWh in 2040 (+ 19.5%). At the same time, the electricity demand will increase by around 8% to reach
6.4 TWh and the final energy demand for heat generation will show minor growth of 2.9% (from
approximately 10.5 TWh to just under 10.9 TWh).
During that same period, the electricity demand of the non-ETS sector of industry will increase by approx.
180 GWh to just over 1.2 TWh in 2040 (+ 17%). At the same time, the fuel required by non-ETS industry will
also increase by just over 21% from 0.9 TWh in 2015 to approximately 1.1 TWh. By contrast, after a slight
increase in 2020, the electricity demand of ETS industry will decrease by almost 6% to 1.9 TWh in 2040.
(see Figure 9).
It should also be noted here that a further increase in electricity consumption seems possible, as this
information does not take account of the fact that larger electricity consumers could settle in Luxembourg
in the near to medium term.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 145
GWh
GWh
Strombedarf Industrie ETS
Electricity demand industry ETS
Brennstoffbedarf Industrie ETS
Fuel demand industry ETS
Source: Own illustration 2019
Figure 9: Electricity and fuel required by industry (ETS sector only) in the period from 2015 to 2040 in the
event of the reference scenario
The final energy demand for heat generation (excluding electricity) in the non-ETS sector shows a slight
increase of 8% overall over the entire study period (+ 1.0% compared to 2030), i.e. the final energy demand
for heating (excluding electricity) will increase from around 9.4 TWh to just under 10.1 TWh. This increase
is based on the increased use of wood and other renewable energies (+ 263% in 2040 when compared with
2015) and other fuels (+ 18% in 2040 when compared with 2015), while the use of the fossil energy sources,
natural gas, fuel oil and coal, will see a significant drop. This increase in the final energy demand for heat
generation is due, on the one hand, to the ‘households’ sector, which will be 21.5% larger in 2040 than in
2015; most of the increase will be seen in the period up to 2030, while the final energy demand of the
sector will only grow by just under 2% in the period from 2030 to 2040 (see Figure 10). On the other hand,
the final energy demand of non-ETS industry will also increase at a near-identical rate (+ 21.3%) from
2.018
2.054
2.026
1.931
1.918
1.905
3.809
3.635
3.485
3.246
3.191
3.113
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
2015 2020 2025 2030 2035 2040
Strombedarf Industrie ETS Brennstoffbedarf Industrie ETS
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 146
0.9 TWh to approximately 1.1 TWh. In contrast to private households and non-ETS industry, the ‘trade,
commerce and services’ sector shows a decline of just under 26% in the use of final energy for heat
generation in 2040 when compared with 2015 (see Figure 10). The final energy demand in the transport
sector, which will see strong growth by 2040 (+ 19.5%) and which is based on a growing number of vehicles
and ever increasing distances driven, is covered almost exclusively by the conventional fossil energy
sources, petrol (+ 2.0 TWh when compared with 2015) and diesel (+ 1.8 TWh when compared with 2015)
(see Figure 11). In the same period, biofuels will see an absolute increase of just under 0.5 TWh.
GWh
GWh
Private Haushalte (ohne Stromanteil)
Private households (excluding electricity share)
Gewerbe, Handel, Dienstleistungen (ohne Stromanteil)
Trade, commerce, services (excluding electricity share)
Industrie (ohne Stromanteil)
Industry (excluding electricity share)
Source: Own calculations 2019
Figure 10: Sectoral development of the fuel required for heat generation by households; trade, commerce
and services, and industry (without ETS share) in the period from 2015 to 2040 in the event
of the reference scenario
5.740
6.386
6.693
6.862
6.909
6.976
2.718
2.534
2.340
2.174
2.088
2.022
901
908
954
952
1.035
1.094
0
2.000
4.000
6.000
8.000
10.000
12.000
2015 2020 2025 2030 2035 2040
Private Haushalte (ohne Stromanteil) Gewerbe, Handel, Dienstleistungen (ohne Stromanteil) Industrie (ohne Stromanteil)
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 147
GWh
GWh
Benzin
Petrol
Diesel
Diesel
Erdgas
Natural gas
Biokraftstoffe
Biofuels
Informell: Kerosin für Flugverkehr
Informal: Jet fuel for air transport
Informell: Strom für E-Mobility
Informal: Electricity for e-mobility
Source: Own calculations 2019
Figure 11: Development of the final energy demand (broken down by energy source) of the transport sector
in the period from 2015 to 2040 in the event of the reference scenario
Table 13 below gives a brief overview of common primary energy factors. With the exception of electricity,
the primary energy demand and the final energy demand are identical, due to a primary energy factor of
1.0. Therefore, separate designation of the primary energy demand is dispensed with here. Figure 12
provides an overview of the ratio of primary energy demand to final energy demand only in the case of
electricity. Due to improved efficiency in the production of electricity, the primary energy factor will
decrease by 26% between 2015 and 2040. In absolute terms, Luxembourg’s electricity demand (final
3.537
4.046
4.296
5.039
5.360
5.562
17.648
18.022
17.525
17.947
18.894
19.417
962
1.237
1.892
1.993
1.450
1.450
5.936
5.936
5.936
5.936
5.936
5.936
2
56
195
355
521
730
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
2015 2020 2025 2030 2035 2040
Benzin Diesel Erdgas Biokraftstoffe Informell: Kerosin für Flugverkehr informell: Strom für E-Mobility
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 148
energy) will increase by just under 8% between 2015 and 2040 despite improved efficiency (on average
around 1% per year), partly because of economic developments, the increasing resident population and
technical developments (increasing digitalisation, more applications of electricity, etc.). At the same time,
the primary energy demand for electricity production will sink by just under 21% (see Figure 12).
Table 13: Primary energy factors used for the various energy sources in the period from 2015 to 2040
2015
2020
2025
2030
2035
2040
Natural gas
1.0
1.0
1.0
1.0
1.0
1.0
Fuel oil
1.0
1.0
1.0
1.0
1.0
1.0
Timber
1.0
1.0
1.0
1.0
1.0
1.0
Coal
1.0
1.0
1.0
1.0
1.0
1.0
Other fuels
1.0
1.0
1.0
1.0
1.0
1.0
Petrol
1.0
1.0
1.0
1.0
1.0
1.0
Diesel
1.0
1.0
1.0
1.0
1.0
1.0
Biofuels
1.0
1.0
1.0
1.0
1.0
1.0
Jet fuel (air
transport)
1.0
1.0
1.0
1.0
1.0
1.0
Electricity
2.4
2.1
2.1
2.0
1.9
1.8
Source: Own illustration 2018
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 149
GWh
GWh
Endenergiebedarf Strom
Final energy demand electricity
Primärenergiebedarf Strom
Primary energy demand electricity
Source: Own calculations 2019
Figure 12: Development of electricity demand (final energy demand and primary energy demand) for the
period from 2015 to 2040 in the event of the reference scenario
The share of the specific sectors in the electricity demand will vary on account of continuing efforts to
improve efficiency and various trends and technological developments in electricity applications and
production technologies in trade, households, industry or the transport sector. While the share of the
transport sector in the total electricity demand will considerably increase by 2040 when compared with
2015 (share of transport 2040: just over 11%), the shares of the remaining sectors (trade, commerce and
services; private households; industry) will decrease to a greater or lesser extent (see Figure 13). When
looking at the absolute electricity demand (final energy) of the individual sectors, it is noticeable that,
despite the increasing population, the absolute electricity demand of households will decrease by around
5.980
6.141
6.260
6.314
6.367
6.441
14.619
13.038
12.849
12.568
12.128
11.612
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
2015 2020 2025 2030 2035 2040
Endenergiebedarf Strom Primärenergiebedarf Strom
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 150
220 GWh between 2015 and 2040 due to improved energy efficiency, while that of the transport sector will
increase strongly due to the growth in e-mobility (+ 0.7 TWh). Demand in the trade, commerce and services
sector will fall by 0.1 TWh, while electricity demand in the industrial sector will see a minimal increase.
GWh
GWh
Private Haushalte
Private households
Industrie
Industry
GHD
Trade, commerce and services
Verkehr
Transport
Source: Own calculations 2019
Figure 13: Sectoral breakdown of the electricity demand for the period from 2015 to 2040 in the event of
the reference scenario
15%
15%
14%
13%
12%
11%
51%
51%
51%
49%
49%
49%
33%
33%
33%
32%
31%
29%
0%
1%
3%
6%
8%
11%
0%
20%
40%
60%
80%
100%
120%
2015 2020 2025 2030 2035 2040
Private Haushalte Industrie GHD Verkehr
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 151
4.4. ‘Energy security’ dimension
4.4.1. Analysis – electricity sector
Reliability of supply
The quality of the electricity supply in Luxembourg is very high, even when compared to Europe. The
average outage duration per point of use and per year was 21.8 minutes in 2017
18
.
Gross electricity production
The data on gross electricity production based on (small-scale) gas-powered cogeneration plants in the past
were gathered from the monitoring conducted by ILR
19
. The expected electricity production from gas was
updated to 220 GWh/year in accordance with the status quo. Other data are from the reference scenario.
Table 14: Gross energy production in Luxembourg by 2040
[GWh]
2016
2020
2030
2040
Biogas
74
56
68
62
Gas
220
220
200
180
Biomass/biowaste
67
192
271
267
Water (not including
pumped-storage power
plants)
104
93
100
107
Wind
127
161
676
1,167
PV
100
251
616
729
Total
692
973
1,931
2,512
Source: Reference scenario, ILR
Domestic energy sources
Electricity production on the basis of renewable energy is a domestic energy source. Together with the
domestic electricity production on the basis of decentralised gas-fired power plants, it amounted to around
690 GWh in 2015. In 2020 to 2040, an increase of around 2.55 TWh is expected according to the reference
scenario. In addition to the types of production listed in Table 14, the Vianden pumped storage power plant
is also worth mentioning. With a production capacity of 1.3 GW and a storage capacity of around
18
ILR, Chiffres Clés du Marché de l’Électricité, Année 2017 - Partie I
19
ILR, Chiffres Clés du Marché de l’Électricité, Année 2017 - Partie I
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5,000 MWh, it is one of Europe’s largest pumped storage power plants and it makes a significant
contribution to system flexibility and security of supply in the wider region. It serves, inter alia, as a valuable
compensation tool for production ratios and forecasting errors in renewable energy production, as well as
for network stabilisation measures.
Import dependency
The import dependency is the result of gross electricity consumption minus domestic production. Table 15
shows the projections regarding gross electricity consumption, both in ktoe and TWh
20
. Since it is expected
that there will be a considerable increase in renewable energy production in Luxembourg by 2040, with
only a minor increase in gross electricity production, the import dependency is expected to reduce
accordingly from just under 90% in 2015 to 60% in 2040. Luxembourg mainly imports electricity from
Germany; more than 75% of its electricity is sourced from there.
In terms of electricity consumption, this presentation does not take account of the fact that larger
electricity consumers could settle in Luxembourg in the near to medium term.
Table 15: Electricity import dependency of Luxembourg
2016
2020
2030
2040
Gross electricity
consumption [ktoe]
560
528
543
554
Gross electricity
consumption [TWh]
6.52
6.14
6.31
6.44
Domestic production
[TWh]
0.69
0.97
1.95
2.55
Import dependency [%]
89%
84%
69%
60%
Source: Own calculations based on ILR and reference scenario
Relevant risks
Luxembourg’s dependence on energy imports over the long term will be lower than it is today, although it
will remain high. The security of supply in Luxembourg therefore also depends on the security of supply in
the rest of Europe. Various studies, such as the Generation Adequacy Assessment (GAA) of the Pentalateral
20
In principle, the EU Commission templates stipulate ktoe as the unit.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 153
Energy Forum or the Mid-Term Adequacy Forecast (MAF) of the ENTSO-E (see Section 3.3.ii.), are currently
under way, which draw conclusions about security of supply not only for individual countries but also for
the entire model region. Since the security of supply in Luxembourg depends in particular on the available
production capacities of neighbouring countries, this approach can also be used to directly predict the
security of supply in Luxembourg. This involves mapping probabilities, including the availability of
renewable energy production installations, unplanned failures of equipment or lines or the temperature
dependency of the demand. One key result is the determination of country-specific LOLE (Loss Of Load
Expectation) values. The LOLE values indicate the number of hours in a year that supply cannot be covered
by capacities and imports. Depending on the scenario and the model, low, although positive, LOLE values
have been calculated for Luxembourg. This positive starting point is linked in particular to the fact that
measures are also planned in Germany in the medium to long term to ensure security of supply (e.g.
through the development of renewable energy and, if necessary, reserve capacity). In contrast, the recent
situation has been rather tense for France and Belgium, but this has had comparatively less impact on
Luxembourg. When comparing the results of these studies, no considerable risks are expected for
Luxembourg in terms of security of supply over the short term. In the long term, too, the expected LOLE
values are below the limit values normally set in Europe, but this situation should be kept under close
observation. This is particularly the case since the security of supply situation in the region as a whole could
become more critical during this time than it is at present. This is because it is not possible to entirely rule
out problems with covering the load for Luxembourg’s direct neighbours or for Luxembourg itself.
However, it should be noted that state measures for safeguarding the security of supply (in particular the
capacity market that has been introduced in France and the recently announced capacity market in
Belgium) may have an impact in the period up to 2023 or 2025. It should also be noted that the
development of renewable energy will also contribute to security of supply, for example through relatively
stable offshore wind injections in the North Sea region. In addition, an actual scarcity of options to cover
demand is also likely to be met with market reactions such as the tapping of load flexibility potential. Since
the tapping of such potential is possible over the relatively short term, it is not yet or at least not fully
included in the studies mentioned above.
4.4.2. Analysis – gas sector
Gas extraction and storage
Luxembourg does not extract any of its own gas. It covers its gas demand via the transport networks of the
upstream network operators in Belgium and Germany, which in turn provide access to the production sites
in the North Sea, Russia, Qatar, the Netherlands, etc. The supplies are handled via the network operators
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 154
and/or via trading and supplying companies. Precise details on the commercial fulfilment of demand are
not available.
Luxembourg likewise has no domestic gas reservoirs. Therefore, the required working gas volume and the
corresponding injection and withdrawal capacities in other countries are used, in particular in the supply
and transit countries from which or via which the gas is also procured.
Import dependency
Since Luxembourg does not extract or store any gas, it is completely reliant on imports. The amount
imported depends exclusively on the gas consumption. While in 2014 Luxembourg procured the gas in
nearly equal shares from Germany and Belgium, in 2017 the majority, at 81%, was imported from Belgium
as a result of the introduction of the joint ‘BeLux’ market
21
.
Table 16: Gas import dependency of Luxembourg
2017
2020
2030
2040
Gas consumption [ktoe]
770.2
773.5
784.5
795.6
Gas consumption [TWh]
8.96
9.00
9.12
9.25
Import dependency [%]
100%
100%
100%
100%
Source: Creos; Creos’s projection as of 2030 updated to 2040
Relevant risks
The high import dependency means that security of supply in Luxembourg is highly dependent on the
neighbouring European countries. Supply bottlenecks in neighbouring countries and Europe as a whole
therefore also directly affect Luxembourg. In the neighbouring countries of Belgium, Germany, the
Netherlands and France, there are, in principle, sufficient gas storage capacities to also cover the storage
requirement for supplying the customers in Luxembourg, at least in the event of short-term supply
bottlenecks. By contrast, the line capacities are of a sufficient size to maintain the supply of particularly
protected customers even in the event of a disruption to the largest network connection point. On account
of the currently low demand for natural gas, in particular due to the decommissioning of the GuD power
plant, the technical capacities – at least at the German border – are not being fully booked by Creos and
are therefore available as guaranteed, uninterruptible capacities. According to Creos, however, it is possible
21
; ILR, Chiffres Clés du Marché du gaz naturel, Année 2017 - Partie I
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 155
that these capacities may need to be booked again in the event of changes to gas demand in order to
safeguard security of supply. The reduction in gas consumption by 2040 and beyond will also implicitly
improve the security of supply situation.
On the basis of Regulation (EU) 2017/1938 of the European Parliament and of the Council, Luxembourg
forms regional partnerships with its direct neighbours in order to safeguard security of supply and draws
up risk assessments and prevention and emergency plans on a rolling basis. In addition, the regulation
provides for coordination and solidarity measures beyond the mechanisms of the gas market on the basis
of bilateral intergovernmental agreements in the event of supply crises. Although Luxembourg is already
pursuing close intergovernmental coordination through the joint gas market with Belgium, additional
intergovernmental agreements could further increase security of supply by means of coordinated
emergency measures.
Since gas, like other fossil fuels in Luxembourg, is also used extensively for heating and cooling, Luxembourg
is pushing for an increase in energy efficiency as well as the increased use of renewable energy for heating
and cooling. Among other things, this should also reduce the import dependency of third countries.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 156
4.5. ‘Internal energy market’ dimension
4.5.1. Electricity interconnectivity
Existing and expected interconnections
Luxembourg currently has direct network connections to all three of its neighbouring countries:
Creos’s transmission network is connected to the neighbouring German transmission network
(Bauler and Trier switching stations) via two 220-kV double-circuit lines with a nominal total
transmission capacity of 1,960 MW.
Sotel’s industrial network is connected to Elia’s Belgian transmission network via a 220-kV double-
circuit line, which has a nominal total transmission capacity of 720 MW.
In addition, Sotel operates a further interconnection towards RTE’s French extra-high voltage
network, with a transmission capacity of 450 MW.
At the end of 2017, the commissioning of the phase-shifting transformer in Schifflange and the possibility
for Creos to use a branch of the 220-kV line towards Aubange created the conditions for Luxembourg’s
integration into the European transmission network, which also enables a permanent connection of the
Creos network to the Belgian transmission network from a technical perspective. The control of the phase-
shifting transformer in Schifflange by the network operators Elia and Creos makes it possible to coordinate
the flow of electricity between Belgium and Germany via the Luxembourg transmission network. The
stronger connection to the Belgian supply network is already contributing in particular to greater security
of supply. A transition to commercial operations under the European Market Coupling is not foreseen in
the short term, but will be re-examined as part of the further development of congestion management.
Creos is currently envisaging the following cross-border network expansion and enhancement measures:
Targeted replacement of existing lines with high-temperature conductors (HTC) using existing masts
Equipping/strengthening of the 220-kV line towards Germany, with a prospective maximum
increase of around 2,600 MW in nominal transmission capacity in existing corridors.
Interconnection level
Three different calculations are used to determine the interconnection level. This involves relating the (n-
0) interconnector capacity to the following:
peak load
total installed production capacity
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 157
total installed production capacity from renewable energy
Regardless of the specific definition of the interconnection level, however, Luxembourg exceeds the targets
for 2020 and 2030 many times over. As mentioned above, this scenario does not take into account the
additional peak load of around 300 MW resulting from the establishment of a large consumer. If such a
consumer were to be connected to the network, Luxembourg’s level of interconnection would be slightly
lower than the values listed below.
Table 17: Luxembourg’s interconnection level
2016
2020
2030
2040
N-0 Interconnector-
capacity [MW]
3,130
3,130
6,546
6,546
Peak load [MW]
1,150
1,220
1,320
1,720
Production capacity
total [MW]
390
565
1,225
1,600
Production capacity
renewable energy
[MW]
290
465
1,125
1,500
Interconnection level
load [%]
270
255
495
380
Interconnection level
gen. [%]
805
555
535
410
Interconnection level
renewable energy
[%]
1,080
675
580
435
Source: Own calculation in accordance with Creos/Sotel, ILR and reference scenario
4.5.2. Energy transmission infrastructure
Analysis – gas
Luxembourg currently has network interconnection points with all three of its neighbouring countries,
which are shown in
Bras (BE)
Bras (BE)
Luxemburg
Luxembourg
Pétange (BE)
Pétange (BE)
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 158
Remich (DE)
Remich (DE)
Esch/Alzette (FR)
Esch-sur-Alzette (FR)
Figure 14. The transport network consists of approximately 290 km of high-pressure pipelines and a total
of 63 distribution stations (pressure control stations) to downstream networks. In recent years, there have
only been minor extensions of the transport network, since the expansion of the main lines is complete
and, according to Creos, only occasional densification measures are planned at distribution network level,
both now and in the future. Therefore, no considerable changes to the aggregated pipeline lengths are
expected in the coming years.
Bras (BE)
Bras (BE)
Luxemburg
Luxembourg
Pétange (BE)
Pétange (BE)
Remich (DE)
Remich (DE)
Esch/Alzette (FR)
Esch-sur-Alzette (FR)
Figure 14: Cartographic representation of Luxembourg’s supply situation
Source: Creos
Table 18 contains details of the existing developments of capacities at the network interconnection points
and those anticipated by Creos.
Luxemburg
Remich (DE)
Bras (BE)
Pétange (BE)
Esch/Alzette (FR)
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Due to a lack of demand for capacity, the cross-border interconnection in Esch-sur-Alzette (FR) was closed
in 2013, but could be reactivated if needed. However, this network interconnection point only supplies a
small region and is not connected to Creos’s transmission system.
The uninterruptible entry capacity at the Remich interconnection point is currently limited to
100,000 Nm³/h.
The (n-1) transmission capacity that is available on a reliable and uninterruptible basis is therefore
170,000 Nm³/h at present. According to Creos, the current peak load of the protected group of customers
is around 140,000 Nm³/h. The infrastructure standard applying to Luxembourg in accordance with
Regulation (EU) 2017/1938 would therefore have been met. However, due to the low number of
interconnection points, Luxembourg is not bound by this obligation, but should attempt to fulfil it, with it
still being necessary to safeguard the gas supply of the protected customers.
On account of the decommissioning of the Twinerg power plant and the associated dramatic decrease in
gas demand, Creos does not see any need to expand the capacities.
Creos also assumes that no industry will move into the area that will act as a major demander of gas.
Table 18: Existing and future capacities of the network interconnection points.
Esch-sur-Alzette
(FR)
20,000
20,000
20,000
20,000
Remich (DE)
150,000
150,000
150,000
150,000
Bras (BE)
110,000
110,000
110,000
110,000
Pétange (BE)
70,000
70,000
70,000
70,000
Total
350,000
350,000
350,000
350,000
Source: Creos
4.5.3. Electricity and gas markets, energy prices
Section 4.4 presents the annual electricity and gas consumption.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 160
For the Luxembourg electricity market, 26 suppliers are currently authorised, of which 14 were active on
the market last year. On the gas market, the number of authorised distributors is 14 – 9 of which are
active
22
.
The current electricity and gas prices for end consumers are presented below.
The electricity prices indicated include network costs, but not tax or duties. The projection for 2020 to 2040
is based on the Primes Reference Scenario. Primes does not draw any conclusions on the characteristics of
the end consumers, such as annual consumption, voltage level, etc.
The gas price in Luxembourg for an average-sized household was €13.77/GJ (or 13.3 (€
2013
/GJ) in 2015,
including taxes, duties and network costs. The energy price alone was around 55% of this amount.
Luxembourg currently has no precise projections on the future development of the gas price. Assuming the
development in the gas wholesale price estimated by the European Commission and a constant exposure
to other price components, gas prices will increase by around 62% by 2040.
Table 19: Development of electricity and gas prices for end consumers.
2015
2020
2030
2040
Average electricity
price for end
consumers
[€
13
/MWh]
116
126
137
148
Average gas price
for end consumers
[€
13
/ GJ]
13.3
16.6
19.5
21.5
Source: Primes Reference Scenario, own calculations
22
ILR, Chiffres Clés du Marché de l’Électricité, Année 2017 - Partie I ILR, Chiffres Clés du Marché du gaz naturel, Année 2017 - Partie I
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 161
4.6. ‘Research, innovation and competitiveness’ dimension
4.6.i. Current situation of the low-carbon technology sector
Research and development in Luxembourg has traditionally focused on the steel, aviation and automotive
sectors. In recent years, the Government has made significant efforts to develop further priorities in the
areas of information and communication technologies, logistics, health technologies, materials, energy and
environmental technologies (‘Clean Technology’). Environmental technologies are among the priorities of
the national economic diversification strategy. Luxembourg has made specific advancements in the areas
of sustainable building, sustainable mobility and the circular economy. Initiatives in these areas are in line
with EU policy and the various directives on issues such as the energy efficiency of buildings, smart
transport systems or ecodesign requirements.
Thanks to its steel industry, Luxembourg has a long-standing tradition of materials-based research. Today
it is working, among other things, on the development of sustainable building materials. In addition,
Luxembourg now has three research teams in the field of solar photovoltaic material research to further
develop resource-optimised thin film PV.
In addition, Luxembourg also has innovation clusters that are dedicated to the issues mentioned above.
The Luxembourg CleanTech Cluster
23
or even the Wood Cluster
24
deserve special mention. Public research
stakeholders, including the University of Luxembourg, play a key role in this context. The same applies to
Luxinnovation, the national agency for promoting innovation and research, which offers personalised
consultancy and support for the stakeholders and the government in the areas of research and innovation
(access to funding opportunities, finding partners, business creation, etc.), thereby playing an important
role in this area in terms of the European networks.
23
https://www.luxinnovation.lu/cluster/luxembourg-cleantech-cluster/
24
https://www.luxinnovation.lu/cluster/luxembourg-wood-cluster/
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 162
4.6.ii. Current level of public and, where available, private research and innovation spending on low-
carbon technologies, current number of patents, and current number of researchers
The key public research stakeholders in the field of low-carbon technologies are the Luxembourg Institute of
Science and Technology and the University of Luxembourg. Their total expenditure on research and
innovation in this field currently amounts to around €20 million. Both institutions currently employ about 160
researchers in this field and together they hold 22 patents or patent families that are assigned to the field.
4.6.iii. Breakdown of current price elements that make up the main three price components (energy,
network, taxes/levies)
Figure 15 and Figure 16 show the electricity and gas prices for household customers in Luxembourg, broken
down into energy, networks and taxes and levies.
STROMPREISKOMPONENTEN FÜR
HAUSHALTSKUNDEN IN LUXEMBURG [€ / KWH]
ELECTRICITY PRICE COMPONENTS FOR
HOUSEHOLD CUSTOMERS IN LUXEMBOURG
[€/KWH]
Energie
Energy
Netze
Networks
Steuern und Abgaben
Taxes and duties
Figure 15: Electricity price components for household customers
Energie
32%
Netze
45%
Steuern und Abgaben
23%
STROMPREISKOMPONENTEN FÜR HAUSHALTSKUNDEN IN
LUXEMBURG [€ / KWH]
Energie Netze Steuern und Abgaben
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 163
Gaspreiskomponenten für Haushaltskunden in
Luxemburg in [€ / kWh]
Gas price components for household
customers in Luxembourg in [€/kWh]
Energie
Energy
Netze
Networks
Steuern und Abgaben
Taxes and duties
Figure 16: Gas price components for household customers
4.6.iv. Description of energy subsidies, including for fossil fuels
Luxembourg has well-established public funding instruments to promote energy efficiency and renewable
energy. These are explained in more detail in Section 3.1.1.iii. This also includes the feed-in tariffs for the
production of electricity from renewable sources (see Section 3.1.2.i).
As explained in Section 3.1.3.iv above, the Luxembourg Government has commissioned an analysis of the
possible impact of direct and indirect subsidies and tax advantages on sustainable development. The scope
of this study also includes tax breaks in the energy and transport sectors. The results of the ongoing study
will be used as a basis for any adjustments.
Energie
57%
Netze
33%
Steuern und Abgaben
10%
Gaspreiskomponenten für Haushaltskunden in
Luxemburg in [€ / kWh]
Energie Netze Steuern und Abgaben
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 164
5.
Impact assessment of planned policies and measures
In order to provide an impact assessment of the planned policies and measures described in Section 3, the
Luxembourg government commissioned a consortium of consultants from the Fraunhofer Institute for
System and Innovation Research (Fh-ISI), Consentec GmbH, the Institute for Resource Efficiency and Energy
Strategies (IREES) and TU Wien – Energy Economics Group. The consortium supplemented and adapted the
models already applied in previous projects concerning energy demand and energy supply to the given
requirements in order to establish an analytical basis that is as robust as possible.
The model-based impact assessment of the planned policies and measures resulted in the target scenario
presented in this section. In general, it should be noted that such modelling and the resulting projections
do indeed serve as guidance, but are always subject to uncertainty. This is especially true in the case of
small open economies, such as that of Luxembourg. As a result, individual decisions or decisions taken
abroad or at European level can bring about significant changes to the target scenario sought.
This reservation must also be applied to the results of the macroeconomic assessment of the present
energy and climate plan presented in Section 5.2.
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5.1. Impacts of the planned policies and measures described in Section 3 on the energy system and
greenhouse gas emissions and removals
The measures planned in Luxembourg show a very high level of ambition in terms of energy efficiency and
therefore lead to a significant reduction in both final energy demand and CO
2
emissions from the relevant
sectors or applications, as this is accompanied by a shift away from fossil fuels towards renewable energy
sources in addition to energy efficiency progress.
In the following, we look at the target scenario and discuss the resulting impacts on the energy system and
greenhouse gas emissions, broken down into changes on the energy demand side, the contribution of
renewable energy and greenhouse gas emissions. The focus here is on the package of measures described
in Section 3. It should be stressed that it is always the full package of measures that is analysed here in
terms of the impacts caused, since an individual assessment would be methodologically inconsistent and
would not be considered appropriate. The impact is illustrated by a comparison with developments in the
reference case.
Section 5.1.1 looks at the evolution of greenhouse gas emissions, Section 5.1.2 looks at the evolution of
energy demand and Section 5.1.3 looks at the evolution of renewable energy.
5.1.1. GHG emissions and removals
Projections of greenhouse gas emissions and removals with the planned policies and measures for the years
2020 to 2040 are summarised in Table 20. Energy-related GHG emissions result from the interaction
between the development of energy demand and renewable energy.
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Table 20: Greenhouse gas emissions by ETS and non-ETS for 2020 to 2040, in the event of the target scenario
(with additional measures), in kt CO2eq
2020
2025
2030
2035
2040
ETS emissions excl. internat. air transport
1,376
1,238
1,074
966
861
Total non-ETS emissions
7,677
6,032
4,726
3,717
2,739
Energy-related non-ETS emissions
6,787
5,262
4,095
3,098
2,130
Energy sector
145
95
68
62
62
Industry
176
150
119
108
75
Transport
5,077
4,004
3,289
2,548
1,865
Private households
933
685
418
248
46
Trade, commerce and services
403
287
172
108
62
Others*
25
18
12
12
12
Diffuse emissions
29
24
17
13
8
Non-energy-related non-ETS emissions
890
770
632
619
609
Industrial processes
112
106
80
70
64
Agriculture and forestry
699
607
515
508
503
Waste
79
57
37
40
42
LULUCF
-390
-393
-401
-399
-397
* Other emissions relate to combustion in construction and agriculture
Source: Own illustrations, 2019
In 2030, a total of around 4.7 million tonnes of CO
2
eq will be emitted by the non-ETS sectors in the target
scenario. This corresponds to a reduction of around 55% when compared with the reference year 2005,
with emissions that are exclusively energy-related falling even more sharply by just over 57%. Non-energy-
related emissions from non-ETS sectors will decrease by about 22% by 2030 when compared with the
reference year 2005. By 2040, total non-ETS emissions in the target scenario are expected to fall to
2.7 million tonnes of CO
2
eq.
Emissions from ETS installations based in Luxembourg in 2030 are estimated at around 1 million tonnes of
CO
2
eq, a decrease of almost 60% when compared with 2005.
In the land use, land use change and forestry (LULUCF) sector, removals are expected to stagnate at around
0.4 million tonnes of CO
2
eq.
In Table 21, the projections of the target scenario are compared with those of the reference scenario (see
Table 9 and Table 20). By 2030, the planned policies and measures therefore lead to a reduction in
emissions in the non-ETS sectors of around 45% when compared with the reference scenario. The
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 167
difference for the ETS sectors is -11%. It should be reiterated here that in the target scenario, the reduction
in emissions by 2030 compared to the reference year 2005 is 55%.
Table 21: Comparison of the greenhouse gas emissions projections of the target scenario (with additional
measures) with the reference scenario (without additional measures) for the years 2020 to 2040
2020
2025
2030
2035
2040
ETS emissions excl. internat. air transport
-1%
-5%
-11%
-15%
-19%
Total non-ETS emissions
-9%
-28%
-45%
-58%
-69%
Energy-related non-ETS emissions
-10%
-30%
-47%
-61%
-74%
Energy sector
-11%
-42%
-58%
-62%
-62%
Industry
-10%
-27%
-42%
-52%
-68%
Transport
-7%
-28%
-44%
-59%
-71%
Private households
-18%
-39%
-62%
-77%
-96%
Trade, commerce and services
-18%
-33%
-54%
-69%
-81%
Others*
0%
-27%
-54%
-54%
-55%
Diffuse emissions
-7%
-23%
-43%
-56%
-71%
Non-energy-related non-ETS emissions
0%
-9%
-23%
-23%
-24%
Industrial processes
0%
0%
0%
0%
0%
Agriculture and forestry
0%
-10%
-23%
-24%
-25%
Waste
0%
-20%
-46%
-41%
-37%
LULUCF
0%
0%
0%
0%
0%
* Other emissions relate to combustion in construction and agriculture
Source: Own illustrations, 2019
5.1.2. Energy demand
The planned energy efficiency measures reduce Luxembourg’s total final energy demand between 2020
and 2040 by just under 40% (18.2 TWh) to just under 27.4 TWh (see Table 22). In 2030, the final energy
demand of the various sectors in Luxembourg totalled 35,568 TWh (-22% when compared with 2020). The
trend in the impact of energy efficiency measures will continue until 2040, meaning that between 2030
and 2040 the total final energy demand for Luxembourg will be reduced by almost 8.2 TWh (-23% when
compared with 2030).
Within the target scenario, the reduction in final energy demand achieved in 2040 is accounted for by
households with a decrease in final energy demand of almost 58% when compared with 2020 (3.7 TWh),
industry with a decrease of 33% (2.4 TWh), the ‘trade, commerce and services’ sector with a decrease of
almost 37% (around 1.5 TWh) and the transport sector with a decrease of around 48% or 10.5 TWh (see
Figure 17). In the target scenario, the final energy demand of the transport sector falls to just over 11.2 TWh
by 2040; the projected decline in tank tourism also makes a significant contribution to this. The final energy
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 168
demand (kerosene) of air transport is maintained at a constant level throughout the period, even in the
case of the target scenario, in line with the assumed development in the case of the reference scenario.
Private Haushalte
Private households
Industrie
Industry
Gewerbe, Handel, Dienstleistungen
Trade, commerce and services
Verkehr – gesamt
Transport – total
Flugverkehr
Air transport
GWh
GWh
Source: Own calculations 2019
Figure 17: Development of final energy demand in the period 2020 to 2040 in the case of the target
scenario, broken down by sector
The share of the specific sectors in the electricity demand will also vary in the target scenario on account
of continuing efforts to improve efficiency and various trends and technological developments in electricity
applications and production technologies in trade, households, industry or the transport sector. In contrast
to the reference scenario, the share of the transport sector is increasing at a significantly faster pace. In
2040, the transport sector will account for 29% of total electricity demand. Accordingly, the shares of the
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 169
remaining sectors (trade, commerce and services; private households; industry) will decrease to a greater
or lesser extent (see Figure 18).
The largest savings in absolute terms (-10.5 TWh when compared with 2020) are achieved by the transport
sector throughout the period, followed by household savings, savings in the trade, commerce and services
sector and reductions in energy demand in industry (see Figure 19).
GWh
GWh
Private Haushalte
Private households
Industrie
Industry
GHD
Trade, commerce and services
Verkehr
Transport
Source: own calculations 2019
Figure 18: Sectoral breakdown of the electricity demand for the period from 2015 to 2040 according
to the target scenario
15%
14%
13%
12%
10%
9%
51%
50%
46%
43%
38%
34%
33%
33%
32%
31%
30%
29%
0%
2%
10%
14%
22%
29%
0%
20%
40%
60%
80%
100%
120%
2015 2020 2025 2030 2035 2040
Private Haushalte Industrie GHD Verkehr
GWh
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 170
Verkehr – gesamt
Transport – total
Gewerbe, Handel, Dienstleistungen (ohne
Stromanteil)
Trade, commerce and services (excluding
electricity share)
Industrie
Industry
Private Haushalte
Private households
GWh
GWh
Source: Own calculations 2019
Figure 19: Reduction in final energy demand (fuels, electricity) within the target scenario broken down
by sector for the period 2020 to 2040
Table 22 summarises the impact of the planned strategies and efficiency measures in the field of final
energy demand, while allowing for a percentage assessment of the impact of the planned policies and
measures in the target scenario (intensification of existing measures, further development of renovation
strategies in the building sector, adaptation of fuel taxation, reinforcement of regulatory requirements or
minimum standards, commitment, etc.) compared to the reference development, which only takes account
of existing policies and measures. The impact of all measures significantly reduces the final energy demand
of the target scenario when compared with the reference scenario and, in the case of the target scenario,
amounts to a total of 35,568 GWh (see Table 22).
849
2.028
3.078
4.011
4.943
302
728
1.225
1.830
2.408
530
751
986
1.167
1.346
2.263
5.477
9.649
12.729
15.988
-
5.000
10.000
15.000
20.000
25.000
2020 2025 2030 2035 2040
GWh
Verkehr - gesamt
Gewerbe, Handel, Dienstleistungen (ohne Stromanteil)
Industrie
Private Haushalte
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 171
The last part of Table 22 presents the percentage deviations in final energy demand in the target scenario
compared to the corresponding development in the reference scenario. This will allow for a clear
presentation of the savings made possible by the planned policies and measures.
Finally, it should be noted that the future development of energy demand for both the reference and target
scenarios is based on comprehensive modelling and a subsequent discussion and reflection process.
National statistics on the energy consumption of households, the ‘business, trade, services’ sector, industry
and the transport sector formed the common basis for both scenarios, which, by their very nature, show
differences in future development. Accordingly, the target scenario shows a much stronger decline in
demand, which essentially reflects the impact of the additional measures presented in Section 3 (when
compared with the reference case). With regard to recent developments in the years up to 2020, the
differences indicated reflect the uncertainty inherent in the modelling process. Statistics on different types
of motor vehicles or different types of fuels (petrol, diesel, natural gas) were available for the transport
sector until 2016. Based on the emerging trend of demand for each type of fuel in the period 2012 to 2016,
the transport sector has modelled future demand for fuel up to 2040. Contrary to the weakening demand
trend derived from this period, the most recent figures for 2017 (slight increase) and, above all, the market
data for 2018 and 2019, which have not yet been statistically verified, indicate that demand for individual
types of fuel in the transport sector is now rising strongly. If these trends prove to be correct, this should
be seen as a sign that further tightening of the planned additional measures would be necessary to achieve
the 2030 energy and climate targets.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 172
Table 22: Comparison of Luxembourg’s final energy demand between the reference scenario and the
target scenario
Reference scenario
Sector
Unit
2020
2025
2030
2035
2040
Total final energy demand
GWh
49,483
49,412
50,506
51,279
52,065
Private households
7,287
7,561
7,689
7,662
7,658
Industry
7,684
7,601
7,314
7,359
7,355
Trade, commerce and services
4,576
4,375
4,191
4,050
3,903
Transport – total
23,999
23,940
25,377
26,273
27,213
Transport – domestic transport
6,745
6,814
7,304
7,870
8,185
Transport – transit traffic
17,254
17,126
18,073
18,404
19,029
Target scenario Paris Article 2.1a
Sector
Unit
2020
2025
2030
2035
2040
Total final energy demand
GWh
45,538
40,429
35,568
31,543
27,381
Private households
6,438
5,533
4,611
3,651
2,715
Industry
7,382
6,873
6,088
5,529
4,948
Trade, commerce and services
4,046
3,624
3,205
2,883
2,557
Transport – total
21,736
18,463
15,728
13,544
11,225
Transport – domestic transport
6,115
4,604
3,832
3,305
2,753
Transport – transit traffic
15,621
13,859
11,896
10,239
8,472
Air transport
5,936
5,936
5,936
5,936
5,936
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 173
Change from target scenario to reference scenario
Sector
Unit
2020
2025
2030
2035
2040
Total final energy demand
1
%
-8%
-18%
-30%
-38%
-47%
Private households
-12%
-27%
-40%
-52%
-65%
Industry
-4%
-10%
-17%
-25%
-33%
Trade, commerce and services
-12%
-17%
-24%
-29%
-34%
Transport – total
-9%
-23%
-38%
-48%
-59%
Transport – domestic transport
-9%
-32%
-48%
-58%
-66%
Transport – transit traffic
-9%
-19%
-34%
-44%
-55%
Source: Own illustration 2019
Table 23 summarises, in the same way as Table 22 in the case of final energy demand, the effects of the
planned strategies and efficiency measures in the area of Luxembourg’s total heat demand and electricity
demand, while at the same time allowing for a percentage assessment of the effects of the planned policies
and measures in the target scenario over the period 2020 to 2040.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 174
Table 23: Comparison of the development of Luxembourg’s heat and electricity demand in the case
of the reference and target scenarios
Reference scenario
Sector
Unit
2020
2025
2030
2035
2040
Heat demand
(excluding
electricity)
GWh
13,463
13,472
13,234
13,251
13,205
Electricity demand
6,141
6,260
6,314
6,367
6,441
Target scenario Paris Article 2.1a
Sector
Unit
2020
2025
2030
2035
2040
Heat demand
(excluding
electricity)
GWh
11,868
10,223
8,371
6,961
5,544
Electricity demand
6,112
6,457
6,416
6,553
6,568
Change from target scenario to reference scenario
Sector
Unit
2020
2025
2030
2035
2040
Heat demand
(excluding
electricity)
%
-11.8%
-24.1%
-36.7%
-47.5%
-58.0%
Electricity demand
-0.5%
3.2%
1.6%
2.9%
2.0%
Source: Own illustration 2019
5.1.3. Renewable energy
Renewable energy is making and will continue to make a substantial contribution to the decarbonisation
of the energy sector in Luxembourg. The target scenario presented in Section 2 shows a pathway towards
achieving a renewable energy share of 25% of gross final energy demand in 2030. This implies a significant
increase when comparing the quantities achieved today (6.4% in 2017) and the 2020 target (11%). In
addition to the massive expansion of renewable energy, this requires a clear increase in energy efficiency
as well as an accompanying reduction in demand, as outlined in the previous section. This section focuses
on the impacts on the energy system of the additional measures aimed at further boosting the
development of renewable energy and increasing its contribution to meeting demand. More specifically,
we look at the energy supply side and look at the contribution of renewable energy sources, which would
also result according to the target scenario when compared with the reference case.
Table 24 provides a comprehensive overview of this. For example, this table shows renewable energy
production for the years up to 2040, both for the reference and target scenarios, at sectoral level and as a
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 175
total balance. The table also allows direct comparison, i.e. consideration of the induced change if the target
scenario is sought instead of the reference development. It also sets out the relative share of renewable
energy in terms of (sectoral) demand, in addition to absolute energy.
At first glance, it may seem surprising that there is only a slight difference in the total national balance in
terms of the amount of energy produced: if, for example, one compares the total national renewable
energy production in the focus year 2030 in absolute figures, an increase of only 1.6% (target vs reference
scenario) can be observed here. At sectoral level, however, there are significant differences: while
renewable energy production shows a significant increase in the electricity sector (+ 30% in 2030) and in
the heating sector an increase of + 3.6%, biofuels in the transport sector show a significant decrease
(- 25.5%) despite an increase in the admixture rate (10% rather than 8%). This is due to the significant
decrease in demand for fuels in the transport sector according to the target scenario (when compared with
the reference case). However, if account is taken of the contributions of innovative solutions, such as e-
mobility, a significant increase in the contribution of renewable energy can also be observed in the
transport sector as a whole (+ 6.9%).
25
A comparison of the reported relative shares of renewable energy sources for the focus year 2030, i.e. the
shares of renewable energy in relation to the respective energy demand (see Table 24), reveals the large
differences between the target and reference scenarios. Instead of the marginal increase of 1.6% in the
national total balance of absolute energy, when comparing the shares of renewable energy in the gross
final energy demand
26
, an increase of 51.5% can be observed. The most significant changes are in the
heating sector, with an increase of 63.8%. The share of renewable energy in the transport sector, according
to the total balance, also rises significantly by 59.3%, while developments in the electricity sector appear
somewhat more subdued (+ 26.4%). In general, it illustrates the significant changes on the demand side, as
discussed in the previous section. In summary, it can be said that a significant increase in the share of
25
It is important to note that multiple counting is used here with regard to the contributions of innovative solutions, as per the revised calculation
logic for determining the share of renewable energy in the transport sector.
26
Gross final energy demand is the relevant indicator for determining the renewable energy target. In simplified terms, it is derived from the final
energy demand values shown in Table 22, which, in addition to the final demand, which amounts to 35,568 GWh in 2030 across all sectors
according to the target scenario, also takes account of transmission losses and the energy sector’s own consumption in the case of electricity and
grid-connected heat – these amount to 291 GWh in the target scenario.
Furthermore, the EU’s regulatory framework imposes a cap on the extent to which the energy demand for air transport can be taken into account
to ensure that there is no distortion or penalisation in the case of smaller Member States. According to the target scenario, the energy demand
for air transport in 2030 is 5,936 GWh; however, due to the cap, only 2,216 GWh is taken into account for the calculation of the gross final energy
demand. In the case of Luxembourg, this therefore entails a noticeable reduction in the gross final energy demand used as a reference value for
the total share of renewable energy – without the air transport cap, which would be set at 35,861 GWh. When the cap is taken into account,
Table 18 shows 32,141 GWh in 2030 for the target scenario.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 176
renewable energy requires clear intervention on the energy efficiency side in addition to direct measures
to increase the expansion of renewable energy.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 177
Table 24: Comparison of the expansion of renewable energy (energy production and shares of
(sectoral) demand) between the reference scenario and the target scenario
Reference scenario
Renewable energy production, absolute energy Renewable energy share measured by (sectoral) demand
Unit
2020
2025
2030
2035
2040
Unit
2020
2025
2030
2035
2040
Renewable energy –
electricity
GWh
752
1,249
1,731
2,071
2,332
%
11.9%
19.4%
26.5%
31.3%
34.7%
Renewable energy – heat
1,626
2,070
2,462
2,699
2,896
12.1%
15.4%
18.6%
20.4%
21.9%
Renewable energy – biofuels
1,855
1,892
1,993
1,450
1,450
7.7%
8.0%
8.0%
5.6%
5.5%
Renewable energy –
transport, total*
2,784
3,438
4,463
4,355
5,390
11.1%
13.5%
16.1%
15.1%
17.6%
Renewable energy – total,
national
4,232
5,211
6,187
6,221
6,679
9.2%
11.2%
12.9%
12.8%
13.5%
Renewable energy –
cooperation needs
1,000
2,917
4,833
4,833
4,833
2.2%
6.2%
10.1%
9.9%
9.7%
Renewable energy – total
incl.
cooperation
5,232
8,128
11,020
11,054
11,512
11.3%
17.4%
23.0%
22.7%
23.2%
Comparison: Gross final
energy demand**
46,119
46,717
47,913
48,773
49,650
Target scenario Paris Article 2.1a
Renewable energy production, absolute energy Renewable energy share measured by (sectoral) demand
Unit
2020
2025
2030
2035
2040
Unit
2020
2025
2030
2035
2040
Renewable energy –
electricity
GWh
748
1,563
2,251
2,680
3,150
%
11.9%
23.5%
33.6%
38.8%
45.4%
Renewable energy – heat
1,626
2,030
2,551
2,495
2,609
13.7%
19.9%
30.5%
35.8%
47.1%
Renewable energy – biofuels
1,632
1,563
1,485
1,738
1,749
7.5%
8.8%
10.0%
14.4%
18.7%
Renewable energy –
transport, total*
2,581
3,755
4,769
7,391
9,587
11.3%
18.4%
25.6%
40.4%
54.3%
Renewable energy – total,
national
4,006
5,156
6,287
6,914
7,508
9.4%
13.9%
19.6%
24.8%
31.9%
Renewable energy –
cooperation needs
1,000
1,374
1,748
1,748
1,748
2.3%
3.7%
5.4%
6.3%
7.4%
Renewable energy – total
incl. cooperation
5,006
6,530
8,035
8,662
9,257
11.8%
17.6%
25.0%
31.0%
39.3%
Comparison: Gross final
energy demand**
42,587
37,203
32,141
27,926
23,526
Change from target scenario to reference scenario
Renewable energy production, absolute energy Renewable energy share measured by (sectoral) demand
Unit
2020
2025
2030
2035
2040
Unit
2020
2025
2030
2035
2040
Renewable energy –
electricity
%
change
based on the
reference
scenario
-0.5%
25.2%
30.0%
29.4%
35.0%
%,
change
based on
the
reference
scenario
-0.1%
21.1%
26.4%
24.0%
31.0%
Renewable energy – heat
0.0%
-1.9%
3.6%
-7.6%
-9.9%
13.4%
29.2%
63.8%
75.6%
114.6%
Renewable energy – biofuels
-12.0%
-17.4%
-25.5%
19.8%
20.6%
-2.5%
10.1%
25.6%
155.2%
242.3%
Renewable energy –
transport, total*
-7.3%
9.2%
6.9%
69.7%
77.9%
1.9%
36.2%
59.3%
168.1%
208.9%
Renewable energy – total,
national
-5.3%
-1.1%
1.6%
11.1%
12.4%
2.5%
24.2%
51.5%
94.1%
137.2%
Renewable energy –
cooperation needs
0.0%
-52.9%
-63.8%
-63.8%
-63.8%
8.3%
-40.8%
-46.1%
-36.8%
-23.7%
Renewable energy – total
incl. cooperation
-4.3%
-19.7%
-27.1%
-21.6%
-19.6%
3.6%
0.9%
8.7%
36.9%
69.7%
*incl. multiplication factors according to the calculation logic regarding the share of renewable energy in the transport sector
**Taking account of the cap on energy demand for air transport: the EU’s regulatory framework imposes a cap on the extent to which the energy demand for air transport can
be taken into account to ensure that there is no distortion or penalisation in the case of smaller Member States. In both scenarios, the energy demand for air transport in 2030 is
5,936 GWh; however, due to the cap, only 2,216 GWh is taken into account for the calculation of the gross final energy demand. In the case of Luxembourg, this therefore
entails a noticeable reduction in the gross final energy demand used as a reference value for the total share of renewable energy – without the air transport cap
Source: Own illustration 2019
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 178
5.2. Impacts of the planned policies and measures described in Section 3 on the economy, employment
and social conditions, environment and health
5.2.1. Estimation of macroeconomic consequences
The macroeconomic assessment of the present energy and climate plan shows slightly positive effects of
the planned package of measures on the key economic indicators up to 2030. The effects are based on the
technological and behavioural changes identified in the bottom-up demand and supply models for the
target scenario (see Section 5.1.). Only the changes resulting from the planned policies and measures in
the target scenario that differed from the reference scenario were included in the assessment. The stimulus
in the form of additional, less avoided, energy efficiency and renewable energy investments, changes in
energy expenditure, changes in primary energy imports, support programmes and regulatory measures
were assessed using the system dynamic ASTRA model
27
. It examined both the direct effects of the stimulus
(e.g. direct employment effects of investments in construction measures), the indirect effects (e.g. the
effects via the other industries linked to the direct activity via intermediate consumption) and induced
effects (the second-round effects of improved economic growth) on the national economy.
According to the model assessments, the planned policies and measures lead to an additional increase in
GDP of around €905 million
2016
or 1.1% by 2030 when compared with the reference scenario. The positive
impact on the economy as a whole is mainly due to the kick-starting of investment in energy efficiency and
renewable energy, the reduction of household and business energy expenditure, and the avoidance of
imports of fossil fuels. There is a positive macroeconomic effect despite the fact that the financing of the
measures is taken into account, which is reflected in an increase in employment of 0.3% or 1,470 employees
by 2030 when compared with the reference scenario. It should also be borne in mind that the reduction in
household and business energy expenditure will of course continue to have a significant positive impact on
the economy as a whole after 2030.
The results of the macroeconomic impact assessment indicate that the introduction of a minimum CO
2
price from 2021 could also partly compensate for additional government expenditure through the support
programmes and subsidies under the target scenario. Therefore, only marginal new borrowings would have
to be accepted until 2030. It should be noted that the revenues generated by the CO
2
minimum price are
used in a balanced way (‘d’une manière équilibrée’) for specific climate measures and targeted social relief
27
Krail Michael, Sievers Luisa (2019), NECP Luxembourg – macroeconomic impact assessment. The report contains a description of the
methodological approach and the ASTRA model, as well as a detailed presentation of the stimulus and results.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 179
through fiscal (e.g. tax credit) and social measures in the sense of social justice (‘équité sociale’) for low-
income households.
In addition to the positive macroeconomic effects, substantial annual external climate costs saved by
Luxembourg will amount to as much as €700 million
2016
in 2030 or cumulatively more than €6 billion
2016
for
the period up to 2030 when compared with the reference value. These external costs are not integrated
into the macroeconomic analysis of impacts, but serve as guidance for the negative financial effects of
climate change that have been avoided.
Development of key macroeconomic indicators
Figure 20 shows the changes in key macroeconomic indicators as a result of the planned policies and measures
when compared with the reference scenario. Table 25 shows, for the years 2025 and 2030, the absolute
development of key macroeconomic indicators, both in the reference and target scenarios, and the resulting delta.
[Delta in Mio Euro 2016 ggü. REF]
[Delta in €million 2016 vs REF]
[Delta in Beschäftigtem ggü. REF]
[Delta in employees vs REF]
BIP
GDP
Konsum
Consumption
Beschäftigung (Einwohner)
Employment (inhabitant)
Investitionen
Investments
Handelsbilanz
Trade balance
Beschäftigung (Gesamt)
Employment (all)
Neuverschuldung des Staates
New borrowings by the State
Figure 20: Absolute change in key macroeconomic indicators when compared with the reference in
€million
2016
(source: Fraunhofer ISI)
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
[Delta in Beschäftigtem ggü. REF]
[Delta in Mio Euro 2016 ggü. REF]
BIP Beschäftigung (Einwohner) Investitionen
Konsum Handelsbilanz Beschäftigung (Gesamt)
Neuverschuldung des Staates
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 180
Table 25: Change of key macroeconomic indicators when compared with the reference (source: Fraunhofer ISI)
Scenario
Indicator
2025
2030
Unit
Reference
Gross domestic product
71,828
82,788
€million 2016
Employment (inhabitant)
244,966
252,945
Employees
Employment (all)
453,186
467,949
Employees
Investments
13,510
15,666
€million 2016
Household consumption
22,471
26,621
€million 2016
Disposable income of households
27,873
33,021
€million 2016
Trade balance
23,353
26,099
€million 2016
State consumption
11,772
13,568
€million 2016
Government debt (total)
15,167
17,328
€million 2016
Objective
Gross domestic product
72,513
83,693
€million 2016
Employment (inhabitant)
245,723
253,741
Employees
Employment (all)
454,588
469,421
Employees
Investments
13,858
15,878
€million 2016
Household consumption
22,824
26,835
€million 2016
Disposable income of households
28,311
33,285
€million 2016
Trade balance
23,708
26,719
€million 2016
State consumption
11,833
13,926
€million 2016
Government debt
15,166
17,408
€million 2016
Delta
Gross domestic product
684
905
€million 2016
Employment (inhabitant)
758
795
Employees
Employment (all)
1,401
1,471
Employees
Investments
348
212
€million 2016
Household consumption
353
213
€million 2016
Disposable income of households
438
264
€million 2016
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 181
Trade balance
355
620
€million 2016
State consumption
61
358
€million 2016
Government debt
-1
80
€million 2016
Annual new borrowings
-17
60
€million 2016
Annual external costs saved
-412
-719
€million 2016
When compared with the reference scenario, the 2030 ASTRA estimates that Luxembourg’s GDP is around
€905 million higher
2016
. In terms of annual real GDP growth rates, this means an increase in annual GDP
growth of about 0.08 percentage points by 2030. Over the period up to 2030, the NECP already allows for
an increase in GDP in 2025 of approximately €684 million
2016
.
GDP growth is driven, on the one hand, by increasing final demand but also by higher potential output in
the target scenario when compared with the reference scenario. In terms of final demand, household
consumption responds with growth of around €213 million
2016
in 2030 when compared with the reference
level. This increase results from an increase in household income and direct investment stimulus for
households. The disposable income of households increases due to the resulting GDP growth and the
additional subsidies and support granted in the target scenario (e.g. the premium for the purchase of zero-
emission vehicles).
In 2025, the difference in household final consumption when compared with the reference level is slightly
higher than in 2030. This slight decline in consumption growth is due to the model’s assumption of counter-
financing of additional investment by households. This means that, after the investment, part of the income
previously available for the consumption of other products and services must be raised for the repayments
and interest payments of the loans. As a result of this effect and the investments continually stimulated
and initiated by the planned measures until 2030, the annual payments for counter-financing will increase
until 2030, thereby reducing the growth in consumption.
Due to the dependence of endogenous investments on consumption, which is anchored in the model logic,
a similar effect can be observed for investments. By 2030, the level of investment is €212 million
2016
higher
than in the reference scenario. The increase in investment is therefore a combination of the direct stimulus
provided by the investment stimulated in the target scenario and the slight increase in household
consumption. The increase in investment of around 0.8% in 2030 is largely influenced by the increase in
household consumption.
The results of the macroeconomic impact assessment indicate that carbon pricing could partially
compensate for the increased government expenditure due to the support measures in the target scenario
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 182
and the decrease in tax revenues. The annual new government debt in the target scenario therefore only
increases by around €60 million
2016
in 2030 when compared with the reference scenario. Meanwhile,
revenues from carbon pricing and additional government revenues from the improved economic situation
even exceed the increase in government expenditure. This results in a marginally higher cumulative public
debt until 2030 of around €80 million
2016
.
A major driver of GDP growth when compared with the reference is the decrease in imports of fossil fuels
due to the decrease in fossil fuel consumption. As a result, the trade balance up to 2030 increases by around
€620 million
2016
when compared with the reference value. This already takes account of the fact that the
import of technologies, for example in the field of renewable energy, results in an increase in imports in
the target scenario when compared with the reference scenario. On the other hand, the slightly higher
economic growth also results in a slightly higher export activity.
Employment Effects
The effects on gross value creation are the result of a combination of the changes brought about by the
stimulus and the interaction effects caused by the interaction between investment, consumption and
intermediate consumption. Since the development of labour productivity for each sector of the economy
does not differ between the target scenario and the reference scenario, the effects on employment result
directly from the changes in gross value creation. Gross value creation is calculated as the total output of a
sector less intermediate consumption purchased. This means, for example, that value creation can also
increase if energy or material efficiency measures mean that fewer inputs are needed for production. The
effects on employment are positive in line with the value creation effects. In the target scenario, the higher
gross value creation when compared with the reference results in an additional labour demand of about
1,400 employees in 2025 or 1,470 employees (total, including cross-border commuters) in 2030. This
represents a relative increase of 0.3% in 2030 when compared with the reference.
Analysis of external climate costs saved
External costs saved also play a role in the economic analysis; these are taken into account separately here.
A comprehensive cost-benefit analysis of energy and climate protection measures includes information on
the level of external costs saved, as these represent a benefit over inaction.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 183
UBA (2018)
28
provides a set of detailed cost rates to quantify external environmental costs. The costs saved
are determined here solely in relation to avoided greenhouse gas emissions
29
. Based on a real discount rate
of 1%, the Federal Environment Agency recommends cost rates for carbon dioxide emissions ranging from
€180
2016
/t CO
2
for 2016 to €205
2016
/t CO
2
for the medium term (2030). If the discount rate is set lower, the
corresponding cost rates are significantly higher (from €640 to €670
2016
/t CO
2
without discounting).
As data were only available for avoided CO
2
emissions, the quantification of external costs saved is limited
to these. The resulting value should therefore be regarded as a lower limit, as it can be assumed that further
external environmental costs saved will be added. The distribution of emissions savings is also reflected
accordingly in the distribution of external costs saved. The total cumulative CO
2
savings by 2030 amount to
just under 32 Mt, which can be converted into external environmental costs saved (cumulative by 2030) of
just over €6 billion
2016
.
5.2.2. Environmental/health impact
A Strategic Environmental Assessment (SEA) has been carried out for the integrated national energy and
climate plan. The objective of the SEA is to avoid planning that could lead to significant environmental
problems. Its purpose is to identify, describe and assess the environmental impacts of the programme of
measures as a whole in advance of and in addition to the project-related environmental impact
assessments for the individual measures. The SEA considers the impacts (including possible interactions)
on the following protected assets:
People, population and health
Plants, animals and biodiversity
Soil
Water
Climate and air
Landscape
Cultural and material goods
The results of the SEA are compiled in an environmental report.
28
UBA (2018): Methodological convention 3.0 for the determination of environmental costs. Cost rates. Dessau-Roßlau.
29
Furthermore, saved costs may also arise in relation to other avoided external effects such as the avoidance of air pollutants, noise pollution or
waste, which cannot be taken into account here due to the lack of availability of information on these external effects.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 184
The impact of the planned policies and measures on emissions of air pollutants will be quantified in the
context of the completion of the future national air pollution control programme under Directive (EU)
2016/2284 on the reduction of national emissions of certain atmospheric pollutants. This will ensure the
greatest possible coherence between the integrated national energy and climate plan and the air pollution
control programme. Where necessary, the air pollution control programme will lay down specific
implementing provisions for the measures set out in this plan (e.g. for the use of biomass for energy).
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 185
5.3. Overview of investment needs
5.3.1. Investments in energy efficiency
The additional energy efficiency investments relevant for the implementation of the measures in 2020
amount to almost €530 million and increase by around 6% by 2040 to approx. €560 million (see Figure 21).
The total amount results from additional energy efficiency investments in the buildings sector (building
envelope, heating systems) and industry.
Euro
Euro
Zusätzliche Energieeffizienz-Investitionen im
Bereich der Industrie
Additional energy efficiency investments in the
industrial sector
Zusätzliche Energieeffizienz- Investitionen für
Förderung der Heizsysteme
Additional energy efficiency investments for the
promotion of heating systems
Zusätzliche Energieeffizienz-Investitionen im
Bereich der Gebäudehülle
Additional energy efficiency investments in the
building envelope
Zusätzliche Energieeffizienz-Investitionen durch
Ordnungsrecht im Gebäudebereich
Additional energy efficiency investments via
building sector regulations
Source: Own calculations 2019
Figure 21: Investments to increase energy efficiency in the period 2020 to 2040, broken down by sector
370.825.484
360.982.667
351.171.639
339.708.703
329.400.142
67.949.867
84.563.227
105.184.326
123.576.282
141.968.237
85.654.510
84.036.628
82.230.430
80.612.711
78.833.056
5.429.301
7.933.169
8.284.453
8.635.738
8.987.023
0
100.000.000
200.000.000
300.000.000
400.000.000
500.000.000
600.000.000
700.000.000
2020 2025 2030 2035 2040
Euro
Zusätzliche Energieeffizienz-Investitionen im Bereich der Industrie
Zusätzliche Energieeffizienz- Investitionen für Förderung der Heizsysteme
Zusätzliche Energieeffizienz-Investitionen im Bereich der Gebäudehülle
Zusätzliche Energieeffizienz-Investitionen durch Ordnungsrecht im Gebäudebereich
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 186
The transport sector will also see further investment through the construction of charging infrastructure
for e-mobility (see Figure 22). A distinction can be made between investments for:
private charging stations (wallboxes) with average investments per charging station of €1,000
public and semi-public charging points with an average investment per charging point of €10,000
public fast charging points with an average investment of €150,000.
The expansion of charging points increases significantly between 2020 and 2040 and peaks in 2030. During
that year, just under 34,000 new recharging points will be installed. By 2040, the number of new charging
stations added each year will drop again to around 21,200 charging points or charging stations, as a
relatively well-developed infrastructure network will by now exist. By way of comparison, the number of
new charging stations per year in 2020 will be around 5,200.
In 2020, the total public investment in the area of newly added charging infrastructure facilities for e-
mobility will constitute around 6% of the total investment for the charging infrastructure, which amounts
to just under €6 million, so around €350,000. By 2030, this total will increase to just over €13.5 million
before slowly decreasing to around €7.5 million in 2040. By comparison, total investment will increase by
just over €61 million by 2030 before falling to just under €39 million by 2040.
Euro
Euro
Öffentliche Schnellladepunkte
Public high-power recharging points
Öffentliche und halb-öffentliche Ladepunkte
Public and semi-public charging points
Private Ladestationen / Wallbox
Private charging stations/wallbox
Source: Own calculations 2019
Figure 22: Investments in e-mobility charging infrastructure in the period 2020 to 2040 in euro
0
10.000.000
20.000.000
30.000.000
40.000.000
50.000.000
60.000.000
70.000.000
2020 2025 2030 2035 2040
Euro
Öffentliche Schnellladepunkte
Öffentliche und halb-öffentliche Ladepunkte
Private Ladestationen / Wallbox
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 187
5.3.2. Investment and support requirements for renewable energy
This analysis focuses on the need for investment in renewable energy technologies and the need for
support (where necessary) for the development and operation of renewable energy installations. Both
parameters are taken into account in the economic studies carried out since, on the one hand, in the case
of investments, a relevant stimulus is created in the complex economic fabric from a macroeconomic
perspective and, on the other hand, in view of the support requirements, there are often direct costs
associated with the performance of the measures implemented and those planned for the future. Table 26
provides a comprehensive overview of this. The investment and support requirements for energy
production based on renewable energy are given for the period up to 2040, broken down by energy sector
(electricity, heat, transport (limited to biofuels)). This is presented for both the reference and target
scenarios. The table also allows direct comparison, i.e. consideration of the induced change if the target
scenario is sought instead of the reference development.
While the total annual investment requirement in new renewable energy plants over the coming decade
(2021 to 2030) averages around €153 million according to the reference scenario, in the target scenario it
clearly exceeds the €200 million mark and comes to around €214 million – implying an increase of around
40%.
30
In the focus year 2030, the differences are smaller (+ 21.9%), while in 2025 they reach a peak of
93.4%. The electricity sector is dominant in terms of investment: on average, 64% of the total investments
are accounted for by the latter over the decade according to the target scenario, while the remainder (36%)
is accounted for by renewable energy installations in the heating sector. Biofuel refineries are located in
neighbouring countries, so there is no investment in Luxembourg. The same applies to renewable energy
cooperation, as this involves renewable energy production abroad.
The annual support requirement for renewable energy, calculated on a net
31
basis, is around €269 million
on average over the coming decade according to the target scenario. In the reference case, it would be
higher (€297 million), since achieving the target in 2030, although lower (23% share of renewable energy
rather than 25%), would result in significant costs for renewable energy cooperation. In the target scenario,
expenditure for the electricity sector dominates – approx. 46% of the total renewable energy support
30
Cumulatively, in the reference case, the total investment requirement in the period 2021 to 2030 is €1,527 million, while cumulative investment
of €2,142 million is expected under the target scenario.
31
The need for funding characterises the necessary direct financial support from the company associated with the expansion or operation of
renewable energy plants. Market revenues, e.g. from the marketing of electrical energy on the electricity market, are not included in this figure
on a net basis.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 188
requirements for the coming decade (2021 to 2030) are accounted for by electricity from renewable
sources, while in the reference scenario, expenditure for renewable energy cooperation would make up
the lion’s share (31% of the total renewable energy support requirements for the decade).
Table 26: Investment and support requirements for renewable energy – a comparison between the
reference and target scenarios
Reference scenario
Renewable energy investment needs Renewable energy support needs
Unit
2020 2025 2030
Cumulative
2035 2040
Unit
2020 2025 2030
Cumulative
2035 2040
21-30
21-30
Renewable energy –
electricity
€million
95.5
73.0
73.0
860.4
53.4
57.3
€million
73.7
93.2
66.9
917.7
31.0
16.5
Renewable energy –
heat
59.2
57.3
81.2
666.5
69.2
99.4
28.5
21.6
33.8
263.2
32.4
44.6
Renewable energy –
biofuels
0.0
0.0
0.0
0.0
0.0
0.0
102.8
75.6
82.8
859.2
55.6
51.3
Renewable energy –
total, national
154.8
130.3
154.3
1,526.9
122.6
156.6
205.0
190.4
183.5
2,040.0
119.0
112.4
Renewable energy –
cooperation needs
0.0
0.0
0.0
0.0
0.0
0.0
31.7
85.8
153.3
925.1
153.3
153.3
Renewable energy –
total incl. cooperation
154.8
130.3
154.3
1,526.9
122.6
156.6
236.7
276.2
336.8
2,965.1
272.3
265.7
Target scenario Paris Article 2.1a
Renewable energy investment needs Renewable energy support needs
Unit
2020 2025 2030
Cumulative
2035 2040
Unit
2020 2025 2030
Cumulative
2035 2040
21-30
21-30
Renewable energy –
electricity
€million
89.6
191.9
76.3
1,380.9
64.0
92.1
€million
73.9
146.8
92.0
1,239.8
32.0
22.7
Renewable energy –
heat
59.2
60.0
111.7
761.6
38.8
57.6
28.5
28.7
51.5
352.8
15.4
15.2
Renewable energy –
biofuels
0.0
0.0
0.0
0.0
0.0
0.0
79.6
62.4
61.7
673.4
66.6
61.9
Renewable energy –
total, national
148.9
252.0
188.1
2,142.5
102.7
149.7
182.0
237.9
205.2
2,266.0
114.1
99.7
Renewable energy –
cooperation needs
0.0
0.0
0.0
0.0
0.0
0.0
31.7
41.2
53.0
423.8
0.5
0.0
Renewable energy –
total incl. cooperation
148.9
252.0
188.1
2,142.5
102.7
149.7
213.7
279.1
258.3
2,689.8
114.6
99.7
Change from target scenario to reference scenario
Renewable energy investment needs Renewable energy support needs
Unit
2020 2025 2030
Cumulative
2035 2040
Unit
2020 2025 2030
Cumulative
2035 2040
21-30
21-30
Renewable energy –
electricity
%,
change
based on
the
reference
scenario
-6.2%
163.0%
4.5%
60.5%
19.9%
60.8%
%,
change
based on
the
reference
scenario
0.3%
57.5%
37.6%
35.1%
3.4%
37.4%
Renewable energy –
heat
0.0%
4.8%
37.5%
14.3%
-44.0%
-42.0%
0.0%
33.0%
52.6%
34.1%
-52.4%
-65.9%
Renewable energy –
biofuels
-22.6%
-17.4%
-25.5%
-21.6%
19.8%
20.6%
Renewable energy –
total, national
-3.8%
93.4%
21.9%
40.3%
-16.2%
-4.4%
-11.2%
25.0%
11.9%
11.1%
-4.1%
-11.3%
Renewable energy –
cooperation needs
0.0%
-52.0%
-65.4%
-54.2%
-99.7%
-
100.0%
Renewable energy –
total incl. cooperation
-3.8%
93.4%
21.9%
40.3%
-16.2%
-4.4%
-9.7%
1.1%
-23.3%
-9.3%
-57.9%
-62.5%
Source: own calculations 2019
5.3.3. Impact on network costs in the distribution network
The electricity network is of particular importance in the context of the energy transition and the associated
shift from fossil to renewable energy sources. Changes in the height and spatial distribution of loads and
production installations connected to the distribution networks are the main drivers of the development
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 189
needs of distribution networks. In both the reference and target scenarios, there is large-scale expansion
of renewable energy installations. At the same time, the load is largely increased by an increase in heat
pumps and e-mobility, which can overcompensate for the efficiency-related reduction in load and can
therefore lead to some network expansion needs.
In total, renewable energy installations with a capacity of just over 300 MW were installed during the initial
year, 2017; PV installations with a capacity of around 185 MW and wind turbines with a capacity of around
75 MW make up the largest share of these. By 2040, the target scenario predicts an increase in renewable
energy production to a total of around 2,500 MW, with the contribution from PV installations expected to
grow to just over 1,800 MW and wind installations to around 550 MW. This means that the total installed
capacity of renewable energy installations is almost eight times higher than today (when compared with a
total of just 1,500 MW in the reference scenario due to lower PV plant capacities).
In addition to the installed production capacity, load increases are expected from electric vehicles,
connection of electric heat pumps, and also from the construction of new apartments. The biggest driver
for the peak load caused by consumers connected to the distribution network is the increase in electric
vehicles, which could lead to an almost threefold increase in today’s peak load by 2040 in the target
scenario and to a doubling of peak load in the baseline or reference scenario. This development is reflected
in corresponding annuity distribution network costs, which increase by around 30% in the reference
scenario and by around 70% in the target scenario by 2030. At the same time, the total cost burden is
spread over a much larger number of end consumers and there is also a slightly higher demand for
electricity, which in turn reduces the specific costs accordingly.
In addition, the development of peak load depends crucially on flanking measures in network operation
and market design, which could not be taken into account in their entirety in the quantification due to their
complexity. For example, the planned further development of flexibility options (see Section 3.4.3.ii), such
as smart charging management for electric vehicles or market-based incentives for systemic demand,
should significantly reduce peak loads. In principle, network expansion needs arising from an increase in
demand can be dampened by a simultaneous increase in distributed production capacity, but only if load
and production are in close proximity and correlated over time or integrated via decentralised storage
solutions. It should also be noted that the network expansion requirement for PV installations is generally
higher than for wind turbines, as the latter are usually connected directly to higher network levels. This also
provides a plausibility check for the higher network expansion requirement in the target scenario, in which
considerably more PV installations are expected.
Luxembourg’s integrated national energy and climate plan for the period 2021-2030 | 190
5.4. Impacts of the planned policies and measures described in Section 3 on other Member States and
regional cooperation
In a small open country like Luxembourg, climate and energy policy objectives also have a cross-border
dimension. Ultimately, only the implementation of the measures described in Section 3 will shed light on
their exact impact on neighbouring countries and other Member States. However, it should be noted that
this impact will remain manageable due to Luxembourg’s relatively small size.
Transport infrastructure projects designed to cope with commuter traffic will certainly have a cross-border
impact. The agreement between Luxembourg and France, which provides for such investments, amounting
to €120 million from Luxembourg and €110 million from France (Lorraine), will contribute to this. Currently,
as is well known, fuel exports to the border region have resulted in an increase in the GHG balance in
Luxembourg. The planned CO
2
pricing, or the increase in excise duties on diesel and petrol, is expected to
lead to a gradual reduction in the differential in fuel prices between Luxembourg and its neighbouring
regions.
As regards cooperation mechanisms, Luxembourg has stipulated in existing contracts with Lithuania and
Estonia (see Section 3.1.2.ii.) that the financial compensation will be invested in specific new projects in the
field of renewable energy and energy efficiency. Luxembourg will continue to focus on the need for
cooperation mechanisms to achieve its objectives. The planned future cooperation on specific projects,
whether in the framework of the Benelux area or in the existing platforms ‘Pentalateral Energy Forum’ and
‘North Seas Energy Cooperation’ (see Section 1.4), will certainly have a positive economic impact in the
project areas.